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September 18, 2024

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ICF Report Forecasts Significant Demand Growth This Decade

ICF International forecasts that demand could increase by 9% by 2028, while peak demand could increase by 5% over the same period, according to a report it published Sept. 12. 

The consulting firm expects that growth to continue, as overall demand will increase by 18% by 2033 and peak demand by 10.7%. The shift to demand growth comes after decades of relatively flat levels in the U.S. 

A robust economy, electrification, growth in manufacturing, data centers and cryptomining are all contributing to the rising demand for electricity. Growth will vary by region, with ICF seeing the largest increase overall in the Mid-Atlantic region because of vehicle electrification and data centers, where demand is expected to grow by 68% by 2050, compared to the national average of 57%. 

“What makes this stark increase in energy demand, particularly peak demand, so challenging is that it simply wasn’t [forecast] in most projections until very recently,” the report says. “The latest demand projections are significantly higher than projections made as recently as 2023. The divergence between last year’s projections and current projections is broad by 2033 and only continues to grow in the coming decades.” 

New supply, including utility-scale solar and wind, could help meet the rising demand, but ICF notes that it faces hurdles for that to happen, including the need to upgrade the grid, cutting the time frame of the permitting process and finding suitable locations to build. 

The grid is not designed to accommodate major amounts of new generation immediately, with ICF noting that on average, it can handle just 189 MW at once, with upgrades needed to handle additional supply. The Mid-Atlantic, northern New England, parts of the Southeast and the Upper Midwest are particularly constrained in that way, the report says. 

And the industry needs to worry about getting that down to the distribution level, with the average amount of such “withdrawal capacity” being 153 MW before upgrades are required, with the biggest challenges in areas with high peak demand growth such as Northern Virginia and parts of Texas. 

The growing demand could slow progress in the transition to clean energy, as it might force utilities to keep fossil-fueled power plants running longer than otherwise, the report says. 

“With enough investment, the U.S. can make major upgrades to the grid and install vast amounts of renewable energy, meeting demand growth while decarbonizing the grid. Americans will likely pay higher utility rates, taxes to pay for federal and state subsidies, or both.” 

The wholesale prices that many utilities pay for electricity could go up by an average of 19% by 2028, and “much of” that would be passed onto customers, the report says. ERCOT could see even higher price increases of 22% by that year. 

The report suggests utilities start engaging in more sophisticated planning that considers the entire system from generators to end-use customers. 

“This requires an integrated approach across all asset classes, including generation, transmission, distribution, distributed energy resources, conservation and load management,” the report says. “This holistic approach equips utilities to consider long-term investment strategies that enhance grid reliability, resilience and operational efficiency by adding greater flexibility and responsiveness to traditional generation and transmission solutions, like virtual power plants.” 

Other suggestions include identifying areas with plenty of renewable resources that can be connected to the grid, enhancing the distribution grid, expanding load-management programs, using artificial intelligence to improve planning and grid management, and staying engaged with regulators on the issues. 

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MISO, TOs Argue Self-funding Necessary for Transmission Development

MISO and its transmission owners defended their practice of allowing transmission owners to self-fund network upgrades in separate filings Sept. 11 responding to FERC’s Order to Show Cause (EL24-80).

FERC in June said grid operators’ practice of allowing TOs first crack at financing — and therefore earning a return on — the network upgrades necessary to bring generators online could be biased against interconnection customers, who may experience higher interconnection costs as a result.

The commission ordered MISO, PJM, SPP and ISO-NE to explain how their tariff language on the initial funding is fair or, alternatively, propose changes to make their policies impartial. It also suggested that TO self-funding creates barriers to interconnection (EL24-80, et al.). (See FERC Issues Show-cause Order on TO Self-funding in 4 RTOs.)

For more than a decade, MISO’s practice of TO self-funding has been the subject of oscillating rulings between FERC and the D.C. Circuit Court of Appeals. RWE Renewables, NextEra Energy and EDF Renewables recently claimed their costs “double or increase exponentially” when TOs take the lead on funding network upgrades.

In their filing, the TOs argued that eliminating their unilateral ability to self-fund upgrades would decrease, rather than promote, the capital investment needed for transmission projects. They also said FERC has no basis to eradicate TO self-funding after establishing it in Order 2003.

MISO insisted its TO initial funding practice is fair and said it never has “observed any instances of [it] being used as a tool to inflate the costs of network upgrades or create advantages for some generation projects vis-à-vis others.” The RTO said a TO electing to self-fund does not affect the interconnection service, but it did acknowledge it does increase the costs for interconnection customers.

“TO initial funding does increase the cost of interconnection service to the interconnection customer, but only because that cost would not otherwise include a … return on capital,” MISO said. “From the perspective of [a] transmission owner, the actual cost of the operating and maintaining the funded network upgrade is unchanged.” It added that eliminating the self-funding option will not necessarily result in lower costs because interconnection customers also could require a return on capital and shift that cost to ratepayers.

MISO also said its procedure affords interconnection customers the opportunity to suggest alternatives to and investigate the justification for a network upgrade so they’re not on the hook for oversized projects that would pad TOs’ bottom lines. The RTO also said interconnection customers can pursue alternative dispute resolution or choose to file unexecuted facilities service agreements to challenge upgrade costs.

The RTO insisted its three-phase interconnection queue design provides enough oversight so that “any network upgrade and corresponding self-fund election has a transparent, multistep history, with MISO involvement at each step.”

However, MISO added a caveat that it “has only limited insight into its transmission owners’ internal functions, needs and decision-making,” so it could not answer all questions posed by the commission. In those cases, MISO submitted its TOs’ answers.

The TOs adopted a more full-throated defense. They said FERC’s show-cause order “poses questions that make it apparent the commission has made up its mind” to eliminate the self-funding option “without regard to the long-term effect this will have on transmission owners and other customers they serve.”

They argued it is imperative they be able to earn a return on assets they will own, operate and maintain for the duration of their useful lives. They said the show-cause order amounts to “misguided policy goals behind an undue discrimination theory” and argued that no one has been able to produce evidence that TO initial funding causes undue discrimination “in the 13-plus years that TO initial funding has been before the commission.”

The TOs also said that, in an era of supersized transmission expansion, it appears FERC has forgotten to “balance interests and to ensure that native load customers are not negatively affected as a result of third-party generator interconnection.” They said their financial viability should be maintained and FERC should be careful not to “strike a one-sided ‘balance’ in favor of cheaper interconnections for generators.”

“Transmission owners bear substantial risks associated with owning, operating and maintaining said transmission facilities, and stand to lose the right to self-fund network upgrades and, with it, the ability to earn a just return on an entire class of interstate transmission facilities, in a grossly unfair proceeding,” the TOs said.

If they are denied the opportunity to make a return on network upgrades, the TOs argued it would constitute an attack on their business model and is akin to the “taking of private property for public use without just compensation.” It is “overly simplistic” and “reductionist” to think  TOs should not be able to earn a return on network upgrades simply because the money for them comes from generation developers, not themselves, they argued. They also said they never would build unnecessary network upgrades because MISO independently studies interconnection needs.

FERC should terminate the proceeding with prejudice, the TOs concluded.

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ERCOT Sets Go-live Date for RTC, ESR Project

ERCOT has set a target go-live date for its real-time co-optimization project, which is expected to add millions in savings to its market. 

The Texas grid operator said Sept. 13 that it has set a Dec. 5, 2025, goal for the market change, about six months ahead of its original mid-2026 timeline.  

Real-time co-optimization (RTC) is used by most other grid operators in North America. The market tool procures energy and ancillary services every five minutes, automating many processes that currently are managed manually. ERCOT currently procures ancillary services in the day-ahead market and typically does not move them between resources in the real-time market. 

CEO Pablo Vegas said RTC’s implementation is “the most significant market enhancement” to ERCOT’s nodal design since its inception in 2010.  

“The target go-live date represents an important milestone in ERCOT’s confidence for planning and tracking the completion of the RTC project for a more dynamic and efficient wholesale power market,” he said in a statement. 

The ISO’s Independent Market Monitor in 2018 released a report that evaluated RTC’s effect on the market. Using 2017 as its simulated operating year, it found a $1.6 billion reduction in total energy costs; an $11.6 million reduction in production costs to serve load; a $257 million reduction in congestion costs; a $155 million reduction in AS costs; and reliability improvements due to a reduced overloading of transmission constraints and a decrease in regulation up. 

Staff and stakeholders have been working on the RTC project since 2019, when the Public Utility Commission directed ERCOT to add the mechanism after the commission assessed its costs and benefits. (See “Real-time Co-optimization Go-live Date Could be Accelerated,” ERCOT Technical Advisory Committee Briefs: Aug. 28, 2024.) 

The project has been expanded to address the growth of energy storage resources in ERCOT. Texas began 2024 with about 5,000 MW of energy storage online, second only to California. It is expected to add more than 6,000 MW this year, according to the U.S. Energy Information Administration. 

System testing will begin early next year. Market trials are planned to begin in May and run through November. 

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ISO-NE Consumer Liaison Group Talks Potential of Offshore Wind

NEW LONDON, Conn. — Activists, ISO-NE officials and state representatives from across New England convened in this port city to discuss the benefits of offshore wind to the region’s power system — along with the challenges to deployment — at the RTO’s Consumer Liaison Group meeting Sept. 12.

The New London port is one of the region’s key staging areas for offshore wind. It was used as a staging and assembly point for the South Fork Wind Farm and is currently supporting the construction of the Revolution Wind project.

“We are bringing this industry to America,” said Ulysses Hammond, the recently retired executive director of the Connecticut Port Authority, kicking off the meeting.

Speakers at the CLG generally spoke favorably of the significant reliability, climate and public health benefits that offshore wind could provide the region, while citing costs and transmission challenges as the key factors that could slow its deployment.

While New England states have set ambitious offshore wind goals, high costs have caused project cancellations and smaller procurements than many advocates have hoped for. Massachusetts and Rhode Island recently announced their selection of 2,878 MW from their multistate coordinated procurement, which initially sought up to 6,000 MW. (See Multistate Offshore Wind Solicitation Lands 2,878 MW for Mass., RI.)

Connecticut, which also participated in the coordinated procurement, announced that it is still evaluating the bids, putting into question the viability of one project selected by Massachusetts. (See NY OSW: If at First You Don’t Succeed, Try, Try Again.)

Although high bid prices appear to have given some lawmakers second thoughts, offshore wind PPAs will likely save ratepayers money in the long run, said Josh Berman, senior attorney at the Sierra Club.

He highlighted the results of a recent analysis commissioned by the Sierra Club that found that adding 9 GW of offshore wind would save the region an estimated $630 million annually due to lower market clearing prices. The estimate was based on a $150.15/MWh project cost, derived from the Sunrise Wind and Empire Wind projects. Massachusetts and Rhode Island have not yet announced the costs associated with their most recent solicitation. (See Offshore Wind Projected to Save New Englanders $630M per Year.)

Adding 9 GW of wind would also cut the region’s power sector emissions by about 42% and provide about $362 million in annual public health benefits due to lower NOx and particulate emissions, Berman said.

Berman emphasized that the benefits would be socialized across the region’s grid, even though the current PPA model largely revolves around individual states — or pairs of states — covering the entirety of a project’s costs. He compared the dynamic to Connecticut’s support of the Millstone nuclear plant and said collaboration and cost sharing between New England states will be a key component moving forward. (See Connecticut Zero-Carbon Awards Include Nukes, OSW, Solar.)

Susan Muller, senior energy analyst at the Union of Concerned Scientists (UCS), said offshore wind will also provide significant winter reliability benefits, as it typically performs better in lower temperatures. She highlighted a recent UCS analysis that found offshore wind additions would significantly reduce winter blackout risks in the region, echoing the findings of recent ISO-NE studies. (See ISO-NE Study Highlights the Importance of OSW, Nuclear, Stored Fuel.)

Muller added that ISO-NE’s inventoried energy program and Mystic cost-of-service agreement, both aimed at ensuring winter resource adequacy, have cost ratepayers nearly $1 billion. And while Enbridge has proposed a significant gas capacity expansion into the region to reduce winter gas constraints, Muller said it makes far more sense to invest in offshore wind resources.

“If you’re thinking about a new gas pipeline, you first need to talk with the communities that it is going through,” Muller said. “The pipeline really seems to be the wrong path to take. Because we have offshore wind as an incredible opportunity before us, we think it’s a no-brainer to go down the other path.”

Liz Mettetal, a director at the consulting firm Energy + Environmental Economics (E3), said offshore wind and long-duration storage will have combined reliability benefits that are “greater than the sum of their parts” as both technologies scale up.

Mettetal said the region should consider timing storage procurements with renewable energy solicitations. She told the CLG that “we don’t need storage on the grid until we have a ton of renewables, but they really will work together.”

Abraham Silverman, a researcher at Johns Hopkins University and the facilitator of the Northeast States Collaborative on Interregional Transmission, emphasized the importance of preparing the grid today for the offshore wind resources that will come online in the coming decade.

“We are making decisions today for projects that are not going to come online until the early 2030s,” Silverman said, adding that transmission projects to enable offshore wind will likely look like smart investments in 20 years, despite their significant upfront costs.

He said the long timeline of permitting and siting onshore transmission infrastructure makes today’s efforts especially important.

Siting and permitting are “probably the most difficult part of the clean energy transition,” Silverman said, adding that “getting the onshore grid ready is just as hard — if not harder — than getting the offshore grid done.”

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FERC Workshop Examines How to Speed up Interconnection Queues

FERC still is working to implement the changes to its generator interconnection rules from Order 2023, but it also is considering further changes, as it held a two-day workshop Sept. 10-11 to gather more input. 

Order 2023 made improvements, FERC Chair Willie Phillips said at the start of the event, but it was not meant to be a silver bullet to queues that are seeing massive interest from new resources and overlapping with widespread demand growth. 

“Our country has a severe interconnection queue backlog. We have over 2,000 GW of generation that’s waiting in the wings to be connected,” Phillips said. “We know right now that the average wait time is over five years for projects to get through the queue. That means that projects that are pretty much ready to go right now have to wait until at least 2029 before there’s a single shovel in the ground. I believe, I’m sure you agree, that’s unacceptable.” 

All five of the commissioners participated in or observed the staff-run workshop at different points over the two days. 

Commissioner Mark Christie argued that more changes are needed, as many power plants are shutting down while demand is rising. 

“Reliability is the overriding goal of interconnection,” Christie said. “That means prioritizing those generation resources that can be built quickly and efficiently and that give us the most generation capacity as quickly as possible, at the least cost burden to customers.” 

The glacial pace of the queues, along with the retirements and rising demand, is contributing to a looming reliability crisis, Christie said. Speeding up new supply can help. One idea that stood out to Christie was from Colorado Public Utilities Commission Chair Eric Blank, who proposed letting state regulators designate which resources would help ensure reliability and giving them preference. 

In his written testimony, Blank argued that the current process in Colorado is working well, but a law in the state requires it to join an RTO before 2030, and that could lead to delays. Resources that clear Colorado’s competitive resource solicitation are prioritized now, and Blank wants that to continue in an organized market. 

“It may be fundamental to Colorado’s ability to maintain resource adequacy and cost-effectively comply with our statutory emission-reduction goals by enabling us to select the type of resources we need, where and when we need them,” Blank said. “As our transmission utilities seek to join RTOs, we would implore FERC to allow us to continue to prioritize the winning bidders from our competitive resource solicitation process, at least for some transitionary period.” 

CAISO has taken queue reform further than most transmission providers, but its most recent cluster of new projects, Cluster 15, had 541 projects representing 354 GW of new supply, which is so much it just does not make any sense to study it all, said Danielle Osborn Mills, the ISO’s principal for infrastructure policy development. 

“We now have over three times the amount of capacity that we expect to need to achieve our 2045 objectives,” she said. 

The issue is not a lack of staffing, or the length of time it would take to study all that excess generation, but rather that developers have proposed so many projects that never will lead to steel in the ground, Mills said. 

“The ISO’s focus has been really on trying to find ways to increase competition earlier in the process, and to find the best and most ready projects that align best with system need and transmission availability early in the process, so that we’re using our study resources to really focus on the projects with the highest likelihood of success,” she added. 

PJM is working through a major backlog of resources and not accepting any new requests until 2026. The RTO is considering a parallel queue to get shovel-ready projects that can help it maintain reliability as its reserve margins are narrowing, said Adrien Ford, director of wholesale market development for Constellation Energy Generation. 

“Demand is increasing at an ever-growing rate, and the pace appears to only be getting faster,” Ford said. “I believe that RTOs have an obligation to facilitate the reliable and ready resources.” 

Constellation is the largest nuclear plant owner in the country, most of them in PJM, and they could expand available capacity quickly through uprates. The company has plans to expand two units by 135 MW, but PJM will not be able to even consider its applications for expanded interconnections until 2026, and that delay could be compounded by the units’ refueling cycle, which is when such work has to take place. 

“If resource adequacy and/or reliability aren’t anticipated to be maintained, then the rate cannot be just and reasonable,” Ford said. “So, I think it’s imperative that action is taken. The expedited reliability process could run in parallel to the existing queue.” 

FERC has maintained a commitment to open access and ensuring a level, competitive playing field for all resources, said Jason Burwen, vice president of policy and strategy for GridStor. Key precedents such as orders 888 and 2003 are focused on keeping barriers to entry low to allow for more competition to benefit consumers. 

“The energy storage industry, of which my company is a member, owes its historic growth to low barriers to market entry that this commission has upheld to date, and open access has been key to enabling capital formation and new market entrants, like my company,” Burwen said. “So, when we think about rationing interconnections, this is, first of all, something I just want to call out. This is a second-best, maybe a third-best, solution to the problem at hand. And we should also consider that it is a Band-Aid; that it is probably a temporary fix.” 

Proactive Planning’s Role

SPP is trying out a new approach to queue management, which Burwen and others called the “entry fee approach,” and solutions like that could mitigate the underlying issues without sacrificing open access, he added. 

The Consolidated Planning Process would mix transmission planning and generator interconnection, co-optimizing the processes and allowing SPP to plan lines that can be paid by both load and new generators, said Natasha Henderson, the RTO’s senior director of grid asset utilization. 

The CPP involves proactive planning for both new load and supply and then aligning the analysis for both processes, which will enable planners to co-optimize the future grid around both inputs. Then SPP needs to tackle cost allocation so the beneficiaries of those co-optimized lines pay their fair share, Henderson said. 

“The concept of the ‘entry fee’ SPP has in mind is to look for a 20-year transmission plan, determine what that transmission would look like, devise an entry fee based upon that and that entry fee would be known to generation interconnection customers before they would enter the queue,” Henderson said. 

Developers were in favor of the idea because getting one fee upfront eliminates a key problem they have with the current system: uncertainty. Several developers complained over the two days about frequent restudies upsetting their earlier expectations, and that even when they made it through a balancing authority’s queue, they sometimes could be hit with a major bill for upgrades in a neighboring “affected system.” 

“We need to provide certainty to generators sooner in the process, to allow decisions to be made earlier in the process,” said David Mindham, EDP Renewables’ director of regulatory and market affairs.  

SPP’s proposed CPP process would do that, he added. The idea of combining proactive transmission planning with interconnection was supported by many speakers at the conference, with R Street Institute Senior Fellow Beth Garza arguing it would make sense for consumers. 

“In too many areas, the interconnection process is being used, instead of comprehensive regional planning, to effectuate network upgrades, and this leads to inefficient outcomes,” Garza said. “These inefficient outcomes mean consumers are harmed because, make no mistake, consumers pay, either directly or indirectly, the cost of all transmission. Whether the transmission results from an interconnection process or regional planning process, costs and risks assigned to generators will find their way to consumers, either through higher prices or potentially an inability to procure or purchase the power from their desired sources.” 

The concept was the subject of a paper that Advanced Energy United and the Solar and Storage Industries Institute commissioned from Brattle Group and Grid Strategies ahead of FERC’s workshop. (See AEU Webinar Highlights Potential Queue Improvements.) 

“The transmission system is not built for new generation resources and load growth,” report co-author and Brattle Group Principal John Michael Hagerty said. “That results in a perpetually constrained system that requires complex studies to identify upgrades that are higher costs than they need to be, that does not consider other system needs and is built just in time for new resources.” 

Connect and Manage

ERCOT avoids the need to study generators’ impacts with its “connect and manage” approach to interconnection, in which any impacts new resources cause, like increased congestion, are dealt with in the transmission planning process, said Warren Lasher, president of Lasher Energy Consulting. 

“The benefit for the generator is it can move through it at its own pace, and you can see generation that comes online in two and a half, three years,” said Lasher, previously ERCOT’s senior director of system planning. “The downside is, as you have mentioned, the risk of curtailment. Now, importantly, the risk of curtailment is only shared by renewables at this time, because there are Planning Guide provisions that state that thermal dispatchable generation has to meet a certain amount of dispatchability for resources, specifically for resource adequacy concerns.” 

ERCOT has not been doing much proactive transmission planning lately, though Lasher said it is working on changes to its economic planning criteria that could lead to improvements. 

The Competitive Renewable Energy Zone lines were a pioneering effort in proactive planning and helped Texas shift huge wind resources from points west to its major cities in the eastern part of the state, Lasher said. Now the state’s Public Utility Commission is considering transmission development that would shift power the other way as large loads in the form of oil and gas drilling and data centers have located there, in part to take advantage of cheap renewable power that is caught behind constraints. 

The FERC equivalent of connect-and-manage is energy resource interconnection service (ERIS), in which generators sign up to be able to sell on the grid with a higher risk of curtailment. There also is network resource integration service (NRIS), which ensures enough deliverability to qualify for capacity auctions in markets that use them. But the difference between ERIS and NRIS can be narrow in some markets. 

“ERCOT is not the only transmission provider in the United States treating energy-only service in a significantly less restrictive way,” said Tyler Norris, a doctoral student at Duke University’s Nicholas School of the Environment, whose research focuses on electric power systems. “At least two other ISOs take a similar approach. Currently, in New York and California, both of those markets have concluded that all, or most thermal power flow constraints for transmission-scale generators can be managed in real time via redispatch, so generally, they are not assigning thermal upgrade costs to ERIS generators.” 

Interconnection Queue Automation

Another option FERC considered during the workshop was automation through software. 

“I believe automation can yield benefits in three principal areas,” said Clayton Barrows, senior researcher at the National Renewable Energy Laboratory: “first, identification of solutions that might not have been apparent to the engineers that traditionally conduct the interconnection studies; second, evaluation of significantly more conditions to improve the robustness of results; and then third, improving the transparency and quality of solutions and the mitigation options that might arise from them.” 

Pearl Street Technologies is one software firm offering a way to automate the system impact studies in the interconnection process in ways that can speed it up greatly, said its CEO, David Bromberg. 

“Even within the studies, there’s a whole lot of sub-steps involved, ranging from taking in the data, to building up the power flow models, running the power flow study, identifying the constraints, proposing network upgrades, estimating the costs, running the cost allocation, and then putting all of this in a report that’s digestible by interconnection customers,” Bromberg said. “So that’s a pretty long list. But even that is a simplification, it is a very complex process.” 

Some of those sub-steps have benefited from automation for years, but Pearl Street offers developers and grid planners ways to automate the entire process, he added. Developers use it to try to pick the best sites for new power plants, while Pearl Street is working with SPP and MISO to automate elements of their interconnection studies. 

“SPP has applied automation to our current backlog studies, and we’re making our way through those clusters,” said Jennifer Swierczek, the RTO’s manager of generator interconnection. “By next summer, every request will have a phase 1 and a phase 2 answer, and many more requests will have reached [generator interconnection agreement]. A lot of that is due to the automation that we put in place.” 

Artificial intelligence has been a hot topic in the electric industry for its projected impact on demand because of the required new data centers, but FERC asked whether the technology could help speed up the queue. 

The kind of large language models that consumers are familiar with are not the kind of AI that is capable of speeding up the queue, Bromberg said. Pearl Street’s optimization engine can help, but it is just modern computational software, he added. 

“We can’t tell AI to do even steady-state analysis, let alone transit stability, or if you have a weak grid area, like an electromagnetic transient study, something really complex,” said Cody Doll, NextEra Energy senior manager of transmission business management. “AI does, however, seem to do very good job at pattern identification for large datasets, and we’ve explored potential uses such as parameter verification.” 

Sifting through large datasets for patterns can be of some use, but it will require new AI technology to transform the interconnection process, he added. 

Automation in general has its limits for the complex and nuanced studies required by the interconnection process, said Donnie Bielak, PJM director of interconnection planning. 

“You need to have the oversight and the engineering judgment that goes into the scrutiny, and that does take time,” he added. 

PJM is automating and streamlining where it is possible, but going too far down that road could lead to “poor solution quality” in the interconnection process. 

“I like to think of PJM planning as kind of the bouncers at the door,” Bielak said. 

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Building Foundations for More than Wind Turbines

COEYMANS, N.Y. — Major components of New York’s next offshore wind farm are taking shape on a hillside far from the ocean, and along with them the makings of a domestic supply chain.

On Sept. 12, Ørsted gathered industry, labor and environmental officials in upstate New York to mark some milestones in preparation for construction of Sunrise Wind.

The offshore wind developer said it has completed 50% of the advanced foundation components, 50% of the onshore substation and 30% of the duct bank work for the onshore power line.

Horizontal directional drilling will begin for the near-shore cable this autumn, and foundations for the 84 turbines will start to be installed in the spring.

The growing pains early U.S. offshore wind projects have suffered are due in part to the limitations of the domestic supply chain, and the industry’s future will benefit from the experience being gained in places like Coeymans.

Johnta Terry, an ironworker with Local 12, confers with a supervisor during finishing work on one of dozens of external platforms for the Sunrise Wind project. | © RTO Insider LLC

“I was here in October of 2021, and we walked around and what we saw was a blank, ungraded piece of land along the river, and we weren’t sure what could become of this site,” David Hardy, CEO of Ørsted Americas, said at the event.

Three years later, contractor Riggs Distler has more than 100 people working on the site and thousands of tons of their handiwork is lined up, ready for shipment.

Chris Johnston, vice president of offshore wind at Riggs Distler, said institutional knowledge is being built as the first wind farms are being built.

“They’re difficult projects. They haven’t been done in the U.S. before. And you know, we’re all learning as we go on some of these projects.”

Even things as simple as the tent placed over concrete as it cures have been improved, construction manager Chuck Carter said. During work in Rhode Island on Ørsted’s South Fork and Revolution projects, the company had to move the tent with a crane. Here in New York, it built the tent on rollers.

“It’s done really well from our challenges in Rhode Island,” he said.

Dozens of 130-ton external working platforms are lined up, two hoists on top of each. One hoist is for materials, and one is for technicians.

Lucas Boehlke, an ironworker with Local 12, installs a railing on an external platform that will be part of the Sunrise Wind project. | © RTO Insider LLC

The latter is called the GUS crane.

That’s not the manufacturer’s name. It’s a descriptive acronym: Get. Up. Safely.

No more hopping and scrambling to get into the tower.

“Guys or gals would have to jump across to the ladder and climb up, and then get to the platform, and then go inside and go to the top to do the work,” Hardy explained.

With GUS, they can get hoisted right off the deck of the crew transfer vessel.

The Supply Chain

So why do this work in Coeymans?

It is 135 miles of sailing to get to the closest part of the Atlantic Ocean, then 150 more to get to the lease area where Ørsted will build Sunrise.

Answer: Land is plentiful and affordable in Coeymans, and anything from a barge to an oceangoing ship can pull right up to the quay.

In a nice bit of turnaround, the Port of Coeymans sits on the former site of the last working brickyard out of the scores that once lined the Hudson River. So one of the places that manufactured pieces of New York’s urban landscape in the 1800s and 1900s is now building pieces of its energy portfolio in the 2000s.

“Folks, I’m here to say this is what building offshore wind looks like,” said Doreen Harris, president of the New York State Energy Research and Development Authority. “This is what we knew could be possible, and now we see it before us, literally, here today.”

Hardy said Ørsted’s planned investment in U.S. renewable energy is in the $20 billion range, and said the work done in Coeymans will cost $86 million.

New York’s interest in offshore wind is many-faceted, but economic stimulation is near the top of the list.

Union ironworkers applaud a progress report on Sunrise Wind component fabrication. | © RTO Insider LLC

Harris said: “Of course, we see the major components, the blades, the towers and nacelles, but within that are literally thousands of subcomponents that come with, in this case, hundreds of jobs. It’s a huge value proposition.”

New York had obtained tentative commitments for blade, tower and nacelle factories to be built along the Hudson River in or near Coeymans, but those were contingent on awards in its third offshore wind solicitation, which had to be canceled for lack of specified turbines.

The state still has $500 million available to incentivize supply chain developments, Harris said, and new proposals may be in the offing.

“This is an industry, if we have learned anything, it requires determination, fortitude and commitment, and that is very much what you see here from the state of New York and from the Hochul administration,” she said.

The state has been trying to steer offshore wind job creation toward organized labor — many of the workers building pieces of Sunrise Wind in Coeymans are unionized.

Michael Lyons, president of the Greater Capital Region Building and Construction Trades Council, is happy about this. Beyond the metrics with which offshore wind is measured — billions of dollars spent, gigawatt hours of electricity generated, millions of tons of carbon dioxide not emitted — it can be evaluated for its impact on working people.

Riggs Distler Construction Manager Chuck Carter speaks about the fabrication work his company is doing for Sunrise Wind. | © RTO Insider LLC

“When we talk about hundreds of union jobs Sunrise Wind is creating, that’s not just a number, that’s hundreds of New Yorkers who are excited to be a part of this historic project,” Lyons said. “And that’s why we’re all here today, not just to celebrate the incredible tradesmen and women building our clean energy future, but also to reiterate our commitment to growing this important local industry.”

South Fork Wind, the nation’s first utility-scale offshore wind project, was completed earlier this year and is feeding into the New York grid.

Sunrise Wind is back under contract and under construction after concluding in 2023 that it could not go forward under the financial terms of an earlier contract.

Empire Wind is also back under contract and laying groundwork for construction. It is presently building an $861 million offshore wind hub in Brooklyn, 130 miles closer to the ocean than Coeymans.

At least three projects have been bid into New York’s latest solicitation; the state hopes to award contracts in early 2025.

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CAISO Backtracks on Proposal to Refine Battery BCR

CAISO is reconsidering its proposal to address unwarranted bid cost recovery (BCR) payments for storage resources following internal analysis that suggested the proposed solution wouldn’t sufficiently address the problem.  

The initial proposal would have redefined dispatch unavailable due to battery state of charge (SOC) constraints in the binding interval as “non-optimal energy,” which is ineligible for BCR. (See CAISO Adjusts Timeline for Storage Bid Cost Recovery Initiative.) But due to the use of multi-interval optimization (MIO), the ISO found the proposal may not significantly reduce BCR payments and would be challenging to implement.  

“The proposed solution is based on the assumption that dispatch in the binding interval is optimal,” Sergio Dueñas Melendez, CAISO storage sector manager, said at a Sept. 11 Storage Bid Cost Recovery and Default Energy Bids Enhancements workshop. “By optimal, we mean that it’s economic. This assumption, however, may not hold true, in general, because of how MIO operates, particularly with regards to energy storage.” 

Dueñas Melendez explained that it’s “possible for an economic dispatch to occur in the binding interval that would preserve or even increase the state of charge moving forward” in a way that could be repeated across several real-time dispatch runs, “resulting in a situation where the proposed solution would not be triggered and BCR would continue to be allowed to accumulate.”  

For the proposal to be effective, the ISO would need to modify the solution to consider both binding and advisory intervals. CAISO encountered a similar problem with the ancillary services SOC constraint, Dueñas Melendez said, and while the issue is familiar, it increases the complexity of the solution.  

Another concern with the proposed solution was identified regarding market power mitigation, where stakeholders noted that the BCR calculation should not exclude instances in which resources were mitigated in intervals prior to a buy- or sell-back of energy. 

“It is important to consider instances in which resources may have had an inadequate state of charge to meet awards of schedules because of mitigation in prior intervals,” Dueñas Melendez said.  

CAISO’s Market Surveillance Committee flagged the issue in prior meetings and recommended further analysis to understand its impact on BCR. According to MSC’s recommendation, if the analysis showed a material impact, the market could benefit from the ISO developing an exception for mitigation.  

Multi-interval Optimization

The ISO provided background on the relationship between MIO and storage BCR. For storage resources, the MIO charges or discharges a storage asset due to projected conditions in the future, “linking solutions over intervals to ensure the asset’s limited SOC is utilized when it is most valuable,” an ISO presentation said.  

MIO charges or discharges a resource to prepare for a future energy award, to avoid hitting a maximum SOC constraint, to adjust for future interval economic conditions stemming from supply, demand or net interchange forecasts, or to rebalance an exceptional dispatch.  

“As a result, MIO may dispatch a resource uneconomically in the binding interval due to actions taken by the scheduling coordinator, due to factors that inform the ISO’s market optimization, or due to the optimization process itself.”  

MIO could increase the complexity of developing a solution due to the proposal’s assumption that the ISO will be able to identify when a binding interval has an SOC constraint. The problem, Dueñas Melendez said, is that SOC constraints are often not binding in the binding interval, meaning the solution may not be triggered when needed.  

Mitigation has ‘Minimal Impact’

While stakeholders noted that instances in which resources were mitigated in intervals prior to a buy- or sell-back could merit specific BCR provisions, a presentation from CAISO’s Department of Market Monitoring (DMM) suggested otherwise.  

For the first half of 2024, real-time BCR for state-of-charge-induced buy- and sell-backs of day-ahead schedules were “primarily driven by negative revenues, not the bid costs,” DMM Senior Advisor Roger Avalos said.  

Avalos also identified that mitigation of batteries has had minimal impact on dispatch of batteries prior to peak net load hours, even if batteries bid high.  

“This indicates that more efficient bidding incentives created under ISO’s initial proposal would not have been undermined by local market power mitigation,” the presentation reads.  

Stakeholders requested additional data that shows not just the impact of mitigation on dispatch, but also its effect on a resource’s ability to charge.  

“That seems to be where the mitigation is really causing a chokepoint, because it’s moving your willingness to pay down lower,” said Cathleen Colbert, senior director of Western markets policy at Vistra.  

To better understand the complexity of the issue, other stakeholders echoed Colbert’s request.  

“It would be helpful to see a more distinct breakdown between reductions of discharge versus reductions of charging for purposes of mitigation, just to see if there’s any effective patterns that might be found there,” said Josh Arnold, senior market and operations analyst at Customized Energy Solutions. “Some additional clarity would be very welcome.” 

The draft final proposal is slated for Sept. 30.  

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ERCOT Cybersecurity Monitor Shares Best Practices

Speaking to ERCOT stakeholders, Chuck Bondurant, the Texas Public Utility Commission’s director of critical infrastructure security and risk management (CISRM), urged his listeners to treat the ISO’s grid as a special jewel. 

“You know, we brag that we’re our own grid,” he said Sept. 10 during a Talk with Texas RE webinar. “So, let’s protect it that way.” 

As the commission’s security lead, Bondurant helped set up ERCOT’s Cybersecurity Monitor Program, a voluntary outreach effort to involve the state’s utilities in sharing best cyber-defense practices. The program, focused on physical security issues, kicked off what he said was a “massive” recruitment effort in 2020; it now numbers 65 participants. 

The monitoring program was created by state legislation requiring the PUC and ERCOT to “foster a more collaborative, strategic approach identifying cybersecurity issues” and improve security measures in electric infrastructure. The cybersecurity monitor is responsible for managing the outreach, communicating emerging threats and best business practices, reviewing cybersecurity self-assessments, researching and developing best business practices for cybersecurity, and reporting “monitored utilities’” preparedness.  

The program is free for utilities in the ERCOT region but costs $4,322 for those in the MISO South, SPP and WECC portions of Texas. It is managed by Paragon Systems, a Houston-based security guard service. 

Quarterly meetings form the program’s backbone. Bondurant said the meetings are open to utilities that “may be on the fence” about joining the program to learn more about the program. 

“This is what we originally envisioned. … This is a chance for utilities to have a safe space where they could dialogue,” he said. “This is just another forum, another opportunity for utilities to kind of get together and discuss, ‘Hey, these are the things that that concern us.’” 

Stressing the cybersecurity monitor is not an auditor, Bondurant said, “We’re here to come alongside the utilities and get a better understanding of what we are and where we’re at, cyber security-wise across the state.” 

“Texas is a huge space, and it’s pretty hard to be able to touch every single one of the utilities within the state. This program kind of helps us get an overall, generalized view of what we look like across the board, whether it’s municipal utilities, co-ops or investor-owned utilities,” he added. 

Recent topics have included unmanned aerial systems, which include drones.  

“That is a huge, huge topic that’s not just being talked about here in Texas,” Bondurant said. “Some of the discussion is, ‘How do we help utilities?’ [Utilities] are kind of hamstrung by federal requirements on what you can and can’t do in defense of your systems in concern with unmanned aerial systems. We’re discussing this, seeing what can be done legislatively to give [utilities] additional tools [to] combat this.” 

The program will hold a Critical Infrastructure Cybersecurity Summit on Oct. 9-10 on the University of Texas at San Antonio campus. It will feature speakers from the U.S. Department of Energy, the federal Cybersecurity and Infrastructure Security Agency, NERC and other security professionals.  

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NERC RSTC Approves Charter Revisions

The chair of NERC’s Reliability and Security Technical Committee (RSTC) hailed this week’s quarterly meeting in Montreal as a “very productive” gathering that moved forward on several important issues.

“I want to thank everyone for their engagement, their questions, [and] their perspectives on those issues, because we’re going to draw on that heavily over the next year or so,” Chair Rich Hydzik of Avista Utilities said at the conclusion of the informational session that took up the meeting’s second day.

Among the topics that members worked on during the two-day meeting was a standard authorization request (SAR) proposed by NERC’s Inverter-Based Resource Performance Subcommittee (IRPS). The SAR (on page 318 of the agenda) is aimed at revising FAC-001-4 (Facility interconnection requirements) and FAC-002-4 (Facility interconnection studies) to “address the reliability risks presented to the [grid] due to … observed systemic deficiencies in IBR [inverter-based resource] performance and modeling.”

NERC Senior Engineer Alex Shattuck explained the SAR was inspired by recent grid events such as the Odessa disturbances of 2021 and 2022, when the Texas interconnection lost 1.3 GW and 2.6 GW of solar and synchronous generation respectively. (See NERC Repeats IBR Warnings After Second Odessa Event.) Shattuck said the IRPS worked to make sure the potential “enhancements” to both standards are “aligned with FERC Order 901,” which directed NERC to submit reliability standards over several years touching on multiple reliability issues with IBRs.

RSTC members voted to endorse the SAR, which will be submitted to NERC’s Standards Committee for approval. Endorsement by the RSTC is not required to begin the standards development process, but it indicates the proposal has support from the community.

Members also approved a set of revisions to the committee’s charter intended to improve the balance of industry representation at meetings. NERC’s Board of Trustees approved the charter in 2019 when the RSTC was created from the merger of the Planning, Operating and Critical Infrastructure Protection committees. (See NERC Board OKs Committees Merger.)

The committee’s current membership rules permit two voting representatives each from industry sectors 1-10 and 12, along with 10 voting at-large seats. If any sector receives no nominations during the election process, that sector’s seat can be converted into an at-large membership for the remainder of the term.

While the meeting agenda stated this structure was intended to ensure “a full RSTC membership ready to tackle reliability risks,” Candice Castaneda, NERC’s senior legal counsel, said that the number of at-large members had grown beyond NERC’s intentions, reaching 15 at the beginning of 2024.

“This, coupled with the RSTC rule that matters require a two-thirds vote to pass, began causing tension with the sector balance requirements,” Castaneda said. She explained that NERC’s bylaws, along with the Federal Power Act, state that committees “organized on a sector basis must ensure that no two sectors are able to control a vote on a matter, and that no single sector can defeat a matter.” The growth of at-large members created a risk that one or two sectors could reach a dominant position on the committee.

To address these issues, NERC staff proposed to:

    • Eliminate the at-large conversion process and allow a sector to seek a special election to fill an open seat.
    • Remove the numerical cap on the number of representatives from a sector that can serve as at-large members.
    • Explicitly direct the RSTC Nominating Subcommittee to prioritize balanced sector representation, including citation of relevant parts of NERC’s Rules of Procedure.

The committee voted to approve the charter revisions, which will be submitted to NERC’s board for approval.

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New MISO Day-ahead Market Engine to Emerge Soon After Delay

MISO’s new day-ahead market clearing engine should move into standalone production near the end of the month following a delay in testing, executives with the RTO have said.

The new engine is one piece of MISO’s yearslong work to replace its aging market platform. Earlier this year, MISO said it planned to begin running its day-ahead market on the new engine in May. (See MISO Sets Sights on 2025 Completion for New Market Platform.)

“I can see the light at the end of the tunnel. I know I’ve been here for four months, but this is years and years of work,” Nirav Shah, MISO’s new chief digital and information officer, said during a Sept. 11 teleconference of the Technology Committee of the RTO’s Board of Directors.

Shah later confirmed to board members that “there were absolutely delays from a testing perspective.”

CEO John Bear acknowledged in June that MISO encountered challenges bringing the day-ahead market into parallel operations with the existing platform. At the time, he said the RTO was working with vendor General Electric to iron out problems that are preventing MISO from cutting over to the new platform and retiring the legacy system.

“The problems and challenges we’re addressing here will help us move faster on the rest of the project,” Bear said.

Shah said the testing phase of the day-ahead market clearing engine is now proceeding smoothly and MISO is in daily communication with GE.

The delay will likely impact the testing of MISO’s new real-time market clearing engine, which was expected to begin parallel operations in the third quarter of this year, but Shah said that start time is looking tenuous.

However, Shah said MISO plans to finish most of the projects associated with its market platform replacement by the end of 2025.

The RTO said it remains on track to launch its new one-stop model manager and end parallel operations of its old, siloed modeling systems in 2025.

MISO said it has worked with vendor Siemens to standardize data fields across the RTO’s separate modeling structures to make a cohesive model manager. It expects to complete data migration sometime in the first quarter of next year.