Transmission & Wind: Lessons from the Midwest

The Midwest Independent System Operator (MISO) efforts on transmission planning and wind integration in the last decade provide key lessons on how to expand wind generation while supporting a robust and efficient energy market. MISO now has over 12,000 megawatts (MW) of wind connected within their footprint and recently approved $5.2 billion of ‘multi- value’ transmission projects (MVP’s) that will help deliver up to 21,000 MW more wind energy and other significant benefits to the MISO system.

Some of the key lessons learned are highlighted below:

Transmission Planning

  • Transmission planning must address a range of issues and objectives, including reliability considerations, state and federal policy (e.g., state renewable energy policy), economics, off-peak delivery of energy, and capacity requirements. Renewable energy, with the majority being wind generation, is required by state legislation in the MISO region, and transmission can help bring that wind generation at the lowest cost to the consumer.
  • Transmission planning must include key stakeholders to help develop a roadmap for the future. In the Midwest, organizations such as the Midwestern Governors Association, the Organization of MISO States (OMS), MISO stakeholders and staff have worked together to develop and inform regional studies. Such studies have enabled Midwestern stakeholders to identify how to achieve state renewable policy mandates and other objectives while providing the lowest overall cost to consumers.

Procedures for Connecting to the Grid Must Favor Projects That Demonstrate Readiness

  • In the past, projects in the queue to be connected to the electric grid have been at widely differing stages of readiness, which has had the net effect of bogging down the process. Experience in the MISO footprint illustrates how procedures for projects to ‘queue’ up for connection to the electric grid need to give preference to those projects that have done the most to demonstrate that they are ready to be built, and that align best with the overall development of expected electric generation projects. This will require more cooperation through cost allocation and improved queue processes as higher cost interconnections are required in the future.

Emerging Operational and Market Practices Help Integrate Wind Generation More Economically

  • Large balancing areas ease the integration of wind. MISO’s large wind balancing area (i.e., being able to draw on wind from across a large geographic area) demonstrates how a larger area with a relatively low level of wind generation compared to the demand for electricity is more effective than numerous smaller balancing areas with high levels of wind compared to demand. To understand why this is the case, one can think of the fact that it’s generally windy somewhere if you are able to draw from a large enough geography.
  • Shorter dispatch periods reduce problems in integrating wind by reducing the error of forecasting wind generation and load. MISO has a real time energy market with a 5 minute dispatch.
  • Geographical diversity across MISO’s footprint reduces wind and load variations to improve the wind product. It also adds to the capacity credit (MW allowed for capacity rating in MISO) for wind, but more robust transmission is required to see these benefits. Geographic diversity is also an important component of distributed economic and jobs impacts to the MISO states.
  • Improved wind forecasting helps operators of the electric grid have a better understanding of exactly when to expect the wind to blow, thereby avoiding excessive wind curtailments (when operators have to force wind turbines to shut down because their electricity is not needed). It also helps avoid requiring excessive spinning reserve requirements (which is the amount of electricity that power producers must be able to deliver on a moment’s notice, say when the wind dies down). Wind forecasting is used to establish the best available information for wind generators to bid within the Dispatchable Intermittent Resources tariff that requires wind generators to submit a day ahead bid into the energy market, as other generators do. Wind energy is too large a resource and would create large errors if there were not an estimate of the wind energy in the day ahead market.
  • Ramping products are being developed to allow generation other than wind to respond to wind variations. The Ramping products supply reserve capacity that can be used to improve the ability of generation to follow the load requirements. Load and generation must match within a small error band.

High Voltage DC (HVDC) transmission may have a place in the future electric grid

  • HVDC transmission has the characteristics to produce economic benefits that would support a business case to build the lines from both energy and capacity sources.

  • HVDC transmission can improve the energy market efficiency of inter-regional markets by scheduling power flows according the market signals to reduce production costs. The benefits from the HVDC transmission would be able to pay for the transmission plus some margin. A 1.25:1 benefit to cost ratio has been suggested for FERC Order 1000. Load customers receive direct benefits from lower prices or lower production costs. The generators providing the lower cost energy receive increased revenue by supplying the energy.

Authors: Dale Osborn, Consulting Advisor, Midwest Independent System Operator; Jennifer Christensen, Energy Policy Specialist, Great Plains Institute; and Mike Gregerson, Consultant, Great Plains Institute