By Amanda Durish Cook

The increase in wind generation under the Clean Power Plan would likely exceed MISO’s previous assumptions and require creation of new renewable generation zones, according to a new analysis from the RTO.

MISO’s midterm CPP analysis, presented to the Planning Advisory Committee last week, also quantified the most economic levels of coal retirements under the EPA rule, showing that the cheapest path to full implementation would require the retirement of 16 to 21 GW.

The analysis showed that MISO’s Regional Generation Outlet Study (RGOS) is in need of expansion, said MISO Senior Policy Studies Engineer Jordan Bakke. The 2009 study sought to help states meet their renewable portfolio standards by identifying regions with optimal combinations of wind conditions and distances to load as well as suggesting potential transmission projects to accomplish the goals.

Assumptions Overtaken

The study produced the RGOS zones MISO uses today, with assumptions initially meant to inform decisions until 2026. While actual and queued wind siting has been consistent with those assumptions since 2011, the RTO expects wind installations to begin exceeding projections because the CPP and falling prices mean renewable penetration will exceed levels needed to meet the state renewable mandates on which the earlier study was based.

MISO says the anticipated growth warrants adjustments to the MISO Transmission Expansion Plan renewable siting methodology, as well as adding solar zones into study assumptions.

Bakke said an uptick in renewables is imminent. “In light of the [Supreme Court] stay, the timeline for the CPP is unclear, but in general we’re studying carbon reductions,” he said. “The CPP is only one of many things that are driving carbon reductions.”

To assist its analysis, MISO commissioned renewable planning firm Vibrant Clean Energy (VCE). The company modeled three scenarios: a 30% cut in carbon emissions from 2005 levels by 2030; a 50% emission reduction by 2036; and an 80% cut by 2050.

Among the study’s findings:

• MISO’s Zone 1 (Minnesota, western Wisconsin and MISO’s stretch of the Dakotas) is ripe for large amounts of potential wind export capacity by 2050. Zone 1’s wind-rich locations make economic sense for extensive wind build-out and transmission development, VCE concluded in the study, which used an assumed $700/MW-mile transmission cost.
• The Great Lakes region could experience a spike in wind production if more transmission was built in that region.
• With expanded transmission and the elimination of coal, the MISO grid could handle 217 GW of installed wind generation and 125 GW of solar and generate 861,000 GWh of renewable power by 2050. (MISO’s all-time wind peak is 13.1 GW, set on Feb. 18.)

Wind has a higher capacity factor than solar in MISO’s footprint, making it a more economic option. Bakke noted the VCE study did not include assumptions about distributed generation or energy storage. He said a more complete picture of the study would be presented at MTEP workshops on March 30 and April 28.

Bakke added that MISO’s long-term CPP analysis would deal with the specifics of transmission overlay on a “bus to bus” level. He said MISO hopes to have a new siting methodology finalized with updated wind zones, new solar zones and ozone non-attainment areas by the July PAC meeting.

‘Sweet Spot’ for Coal Retirements

MISO’s midterm analysis also showed that extensive coal retirements would need to accompany wind’s expansion in order to cost-effectively meet CPP standards.

“We’re not going to try to build our way into compliance by having a very high reserve margin,” Bakke said. “What the system has to do to comply is shift away from coal.”

The analysis set out three scenarios for retiring coal under the CPP through 2034, with the most economic levels of retirements varying based on carbon emissions reductions:

• Under the “final CPP” scenario unaltered by current legal challenges (a 34% reduction in CO₂ emissions from 2005 levels), 16 to 21 GW of coal retirements would be most economic.
• Accelerated CPP compliance (a 43% decrease in emissions) results in 24 to 30 GW of coal retirements.
• Partial CPP compliance (a 17% cut in emissions) results in retirement of 8 to 11 GW of coal.

‘Bathtub Curve’

In every scenario, total costs of compliance over the 19-year period exceeded $237 billion. But costs could be considerably higher if too much, or too little, coal retires.

In a scenario with no coal retirements, Bakke explained, MISO would be forced to redispatch from coal to older, more expensive gas plants in order to comply with CPP mandates. Retirements of the least efficient coal units would lead to replacement with newer, more efficient gas plants, driving down production costs.

Still, system costs would amplify if coal retired beyond rates needed to comply with the CPP, as more expensive natural gas and renewables drive costs higher, resulting in what Bakke referred to as a “bathtub curve” on modeling graphs. Bakke pointed out that high costs from too many retirements were unlikely, as generators would not be inclined to over-comply with any final version of the CPP rule.

“The system naturally doesn’t want to retire this much coal,” Bakke said.