Transmission & Wind: Lessons from the Midwest

January 31, 2013 in Electricity, Reports & Whitepapers

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 

Anaerobic Digestion on Swine Farms: Assessing Current Barriers and Future Opportunities

January 20, 2013 in Reports & Whitepapers

The United States has an enormous amount of untapped potential for collecting biogas from organic waste streams to produce useful forms of energy. Most of the U.S. biogas development in the last 20 years has used dairy manure as a feedstock source. Development has also occurred at wastewater treatment facilities or food processing facilities with a wastewater stream.
A livestock sector that has not received much attention for anaerobic digestion implementation opportunities is swine. According to a Market Opportunities report from US EPA AgStar there are 5,596 swine farms nationwide that are candidates for AD. Currently, there are 26 operational systems in the U.S. Given the gulf between potential and operational; we could be doing much better.
This whitepaper summarizes research findings assessing the barriers and opportunities for implementing anaerobic digestion projects using swine manure as a feedstock.

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Midwestern Ethanol Innovation: Maximizing Process Efficiency and Carbon Reduction

May 20, 2012 in Reports & Whitepapers, Transportation & Fuels

An extension of our work with the MGA Advanced Transportation Fuels Advisory Group, this new white paper provides an overview of opportunities for improving efficiency and environmental performance at corn ethanol plants. Starting with a description of the ethanol production process, we then provide a menu of practices and technologies that can be implemented to reduce energy use, costs and greenhouse gas emissions. We also provide examples of plants that are currently using these practices. While progress on ethanol  innovation is being made, there remains a large opportunity for broader adoption of these strategies.

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CO2-EOR Potential in the MGA Region

February 26, 2012 in Reports & Whitepapers

This report was developed pursuant to recommendations of the Midwestern Governors Association’s (MGA) CCS Task Force and in advancement of Governor Pat Quinn’s 2011 MGA Chair’s Agenda. The report was developed in collaboration with the Great Plains Institute and with the generous feedback of MGA stakeholders and other experts in the Midwest.

 

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Modifications to the 45Q Tax Credit

February 15, 2012 in Carbon Management, Reports & Whitepapers

The National Enhanced Oil Recovery Initiative (NEORI) recommends that Congress consider implementing arevenue-positive federal production tax credit to support deployment of commercial carbon dioxide (CO2) capture and pipeline projects. A new, more robust federal incentive is needed to increase the supply of man-made or anthropogenic CO2 that the oil industry can purchase for use in enhanced oil recovery (EOR) to increase domestic production from existing oil fields.

NEORI also recommends that Congress undertake immediate modification of the existing Section 45Q Tax Credit for Carbon Dioxide Sequestration, through legislative action and/or working with the Department of the Treasury to revise Internal Revenue Service program guidance.

To avoid stalling important commercial CO2 capture projects under development, there is an urgent need to improve the functionality and financial certainty of this federal incentive to enable its effective commercial use.

To make 45Q immediately accessible to US companies, Congress should pursue the following changes to the program:

  • Designate the owner of the CO2 capture facility as the primary taxpayer;
  • Establish a registration, credit allocation, and certification process;
  • Change the recapture provision to ensure that any regulations issued after the disposal or use of CO2 shall not enable the government to recapture credits that were awarded according to regulations that existed at the time; and
  • Authorize limited transferability of the credit within the CO2 chain of custody, from the primary taxpayer to the entity responsible for disposing of the CO2.

The consensus recommendations below detail the specific 45Q program modifications requested, and the section-by-section summary provides further explanation and context.

Background and Rationale
Section 45Q makes available a per-ton credit for CO2 disposed of in secure geologic storage. The program provides $10 per metric ton for CO2 stored through EOR operations and $20 per metric ton for CO2 stored in deep saline formations. However, due to unforeseen issues in the original statute (§ 115 of the Energy Improvement and Extension Act of 2008), the 45Q program lacks sufficient transparency and certainty for companies to be able to use the credit to secure private financing for projects.

Large-scale expansion of commercial EOR using industrially-sourced CO2 later in this decade requires that critical industrial capture projects begin construction now and enter commercial operation within the next few
years. If Congress makes modest, functional improvements this year to 45Q that result in little or no additional fiscal cost, the program currently authorized at 75 million metric tons of CO2 stored can help several significant EOR projects nationwide secure private sector financing and move forward to commercial operation.

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Opportunities to enable interstate coordination & cooperation in support of transmission infrastructure build-out in the Midwest

September 1, 2011 in Electricity, Reports & Whitepapers

Transmission infrastructure development is fundamental to the successful build-out of large-scale renewable energy production and other sources of cleaner, advanced energy production in the Midwest. The level of transmission build-out needed to support deployment of cleaner energy will require multiple jurisdictions and authorities to coordinate and collaborate. A robust, reliable and cost-effective transmission system can be achieved through coordination and cooperation at the state, regional and federal levels and through engagement of key stakeholders to provide guidance on policy development and implementation. Continue reading »

Spotlight On Biogas: Policies for Utilization and Deployment in the Midwest

August 2, 2010 in Reports & Whitepapers
Biogas is a renewable energy resource that holds tremendous potential to help meet our future energy needs. As a versatile energy resource, it can be utilized as a feedstock for electricity and/or heat, a source of renewable natural gas, or as a vehicle fuel. Materials that can be used to produce biogas are abundant, especially in the Midwest – an area rich with livestock production, food processing byproducts, and crop residues. Agricultural production is not the only source of biogas production in the Midwest; wastewater treatment facilities, urban wood and yard wastes, and landfills also provide a feedstock source.

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MGA Energy Security & Climate Stewardship Roadmap

November 25, 2009 in Reports & Whitepapers

This report documents the Midwestern Governors Association (MGA) advisory group recommendations to develop a comprehensive and far-sighted policy strategy for transforming the regional energy economy of the Midwest. Some of the recommended policies represent actions that are already in progress in a subset of the states and provinces, while others represent regional positions on key federal policies. In a world of complex and interlinked energy-use and development incentives, there is no way to completely segregate the impacts of state or provincial, regional, and national policies. But the regional MGA partnership brings an unprecedented opportunity for Midwestern states and provinces to learn from and build on others’ experience, and coordinate efforts where synergies exist at a regional scale.

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Powering the Plains

December 1, 2006 in Reports & Whitepapers

In 2001, the Great Plains Institute (GPI) convened a diverse group of stakeholders and launched its Powering the Plains (PTP) program. From the beginning, PTP turned the energy and climate debate on its head. Instead of focusing primarily on costs, PTP stakeholders also devoted attention to how the Upper Midwest can maximize its economic opportunities in energy and agriculture in a carbon-constrained world.

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