The Midcontinent ISO can change its rules to help pave the way for merchant high-voltage direct current transmission projects, a technology that could help move large amounts of renewable power over long distances, according to federal regulators.

That decision is significant because those lines could help ship wind power from the Midwest to demand centers in the East, reducing negative power prices and renewable curtailments.

Specifically, the U.S. Federal Energy Regulatory Commission decided late Oct. 12 that MISO can implement a set of connection procedures for merchant high-voltage direct-current, or MHVDC, projects and add injection rights for those projects. Injection rights outline MISO's ability to receive energy from a line, and the project owner can dole out the rights to upstream generating facilities for conversion into interconnection service.

The grid operator said the rule change was needed because it had no procedures for connecting external MHVDC lines to the MISO system. Under the new rules, the MHVDC lines will not be controlled by MISO and instead will be external facilities with their own transmission tariffs.

In its application, MISO said the injection rights option allows MISO to study external generators on an aggregate basis, speeding and easing the interconnection process for the projects. Once acquired, injection rights can be allocated, without additional studies, to upstream facilities that then can offer capacity in MISO's planning resource auction, the grid operator said.

SOO Green Renewable Rail is proposing to build a 2,100-MW bi-directional MHVDC line to span 349 miles from MISO's system in Mason City, Iowa, to PJM's system near Plano, Ill. Most of the project, which is slated to start operations in 2025, will be buried within an existing railroad corridor, SOO Green said.

The project will facilitate the export of wind energy from MISO to PJM and help reduce congestion on the MISO system, the company said. "The SOO Green Project will also be used to engage in arbitrage transactions involving the linked MISO and PJM markets, with prices possibly converging around the MHVDC Converter Stations, which again would benefit MISO load."

SOO Green asked FERC to approve MISO's proposal but also to order the grid operator to make more rule changes. Citing a recent order from FERC seeking to boost participation of storage in MISO, SOO Green said the agency similarly should order the grid operator to propose rule changes to allow MHVDC projects to participate in all MISO capacity, energy and ancillary service markets in which they are technically capable of participating.

The company noted that the project will use voltage source converter, or VSC, technology that "allows superior power flow control, voltage/frequency regulation, reactive power support, and black start capabilities," compared to older HVDC technology.

But FERC rejected that request. "MISO's proposal is not intended to address market participation … and any additional proposals regarding participation in MISO's markets are beyond the scope of this proceeding," the commission said.

HVDC lines are more cost effective over long distances and lose less power compared to alternating current lines, according to a March ICF Inc. report commissioned by the U.S. Energy Information Administration.

In the U.S., commercial HVDC lines have been around since the 1970s. But the VSC technology commercialized in the 1990s is particularly well-suited to integrating renewables, for example, by providing ancillary services in the form of fast-acting frequency response, the report said. HVDC lines also can help reduce supply fluctuations by aggregating the output of many variable energy units, the report said. (FERC docket ER18-1410)

Kate Winston is a reporter for S&P Global Platts, which, like S&P Global Market Intelligence, is owned by S&P Global Inc.