Many wind and solar energy projects in the Midcontinent will face the decision to repower or decommission as they reach the end of their useful lifespan between 2020-2050. These decisions will impact the energy mix of the existing electricity system—and its carbon emissions. We analyzed potential scenarios for repowering the Midcontinent’s wind and solar energy fleet, sharing potential implications for the region’s electricity system and carbon emissions. These scenarios show why repowering aging renewables in the Midcontinent is important to continue reducing the region’s electricity emissions.
Here are some key takeaways:
- The Midcontinent has many aging wind and solar power plants that provide a large proportion of the region’s zero-carbon electricity generation.
- Maintaining the existing wind and solar fleet through repowering is increasingly important to ensure continued emissions reductions in the broader Midcontinent Independent System Operator (MISO) region.
- Decommissioning renewable power plants could increase the carbon intensity of electricity generation in the region.
- Decision makers should consider the system-level implications of repowering or decommissioning renewable energy power plants.
Many renewable energy projects in the Midcontinent will reach end of life between 2020-2035
Progress toward a carbon-free energy future in the Midcontinent requires bringing on new carbon-free generation while maintaining existing carbon-free generation resources. The explosion of renewables in the early 2000s, especially wind, resulted in a high proportion of renewable energy generation for many states. States like Iowa and South Dakota see almost 100 percent of their renewable energy generation through wind and other MISO states also claim a high proportion of renewables in their total energy production. Many renewable systems in the region came online around the same time and will reach their end of life concurrently.
At the end of its original useful life, a renewable energy system has three options (discussed in more detail in our previous post):
- Decommission (i.e., stop producing power and remove equipment from the host site);
- Repower, replacing equipment as needed, and produce energy at the same level as the previous equipment, or;
- Repower and increase the amount of energy it produces.
Figure 1 illustrates how many wind and solar power plants will reach end of life in the next 30 years.
Figure 1. Schedule of wind and solar power plants predicted to reach their end of life in the Midcontinent from 2020-2050
Very few projects have reached their end of life as of 2020. The number of projects and the associated generating capacity (meadured in megawatts or MW) set to reach end of life grows in the mid-2020s and into the 2030s as the projects built in the early 2000s and 2010s reach end of life in tandem. While some projects have reached end of life over the last 20 years, this is the first time that such a sizeable group of renewable generators approaches their end of life in the Midcontinent region. Groups like the Minnesota Public Utilities Commissions have also begun to prepare for oncoming repowering or decommissioning decisions.
This raises important questions about the future of renewable energy generation in the region:
- What will repowering decisions made by the owners of these generators mean for our current renewable generation fleet in the Midcontinent?
- How might these choices impact what generation resources are available to use, and how could that change how renewable and zero-carbon energy futures are modeled?
Scenarios show the potential impact of repowering decisions on MISO’s renewable energy capacity and carbon intensity
Many renewable generators are waiting in the MISO interconnection queue to connect to the electric grid in the coming years (adding on to the existing fleet of renewable generators). However, bringing on new generation in the MISO footprint is becoming increasingly expensive, so it is unclear what proportion of projects will come online. This makes maintaining the existing fleet of renewable generators increasingly important to ensure continued emissions reductions in the electricity system.
We explored five repowering scenarios to understand the potential impacts using three key metrics:
- Available renewable generation capacity by looking at wind and solar nameplate capacity—the megawatts (MW) or gigawatts (GW) generation capacity of existing wind and solar plants, also referred to as nameplate MW or GW.
- System operation and capacity factors by looking at wind and solar energy produced using megawatt hours (MWh) of renewable energy produced by existing renewable generators.
- Fuel mix and carbon intensity using carbon dioxide (CO2) emissions per MWh of electricity generated for the MISO energy market.
(Read our previous post to understand factors that shape decision making for repowering vs. decommissioning)
Figure 2. Renewable power plant repowering scenarios explored in GPI analysis
No Change to Power Purchase Agreement
20% Increase in Power Purchase Agreement
100% of renewable generators that are reaching their end of life decide to repower. This might reflect a scenario in which it is beneficial to repower, but siting or other constraints prevent upgrading to larger equipment.
100% of renewable generators repower, and also increase their PPA. This would reflect a scenario in which producing as much energy as possible at POI is the most economically beneficial choice.
50% of current renewable generators repower. The decision to repower can vary greatly at different locations, so it is difficult to predict where renewable generators are likely to repower or decommission.
50% of renewable generators repower, and also increase their PPA, indicating that the generator has likely upgraded equipment or taken on more cost that they plan to recover through a PPA.
0% of current renewable generators repower. While this is an unlikely scenario, it shows the range of the existing renewable generation fleet that could possibly be lost at end of life
For the 50 percent repower scenario, half of wind and solar plants were randomly selected to repower (see figure 3). Power plants were randomly selected because the choice to repower varies greatly from plant to plant and it is difficult to predict which power plants are most likely to repower. For scenarios where the power plants increased the energy output in their power purchase agreement (PPA), an energy output increase of 20% was assumed (this is a typical impact seen by major renewable developers).
Figure 3. Wind and solar projects randomly selected to repower and decommission from the 2016 MISO region fleet
1. Available renewable generation capacity
These repowering scenarios look at the existing fleet of renewable generators and show the amount of generation capacity provided over time. Figure 4 shows the resulting nameplate wind and solar available if 0 percent, 50 percent, or 100 percent of existing wind and solar generators repowered at the end of their respective useful lives, both with and without increasing their PPA. The results show that if 50 percent of generation owners decided to decommission, it could result in the loss of approximately 13GW of nameplate generation, or 24GW of nameplate generation if 100 percent of generators decommissioned. On the other hand, if 100 percent of projects repowered and increased their PPA, available nameplate generation could increase by 5GW.
Any individual power plant’s decision to repower or decommission contributes to MISO’s total renewable generation capacity as well as renewable or zero-carbon energy generation goals set by cities, states, and utilities.
Figure 4. Available renewable generation in the MISO region under repower scenarios, measured in nameplate gigawatts (GW)
2. System operation and capacity factors
The nameplate capacity is not the actual amount of energy it injects to the grid, because no power generator produces their maximum possible energy 100 percent of the time. The ratio of injected energy to the maximum possible injected energy is called a capacity factor.
This analysis examines actual energy produced by renewable generators in 2016 as a sample year and looks at what that generation might have looked like if 50 percent of projects were decommissioned.
Figure 5. Energy production of existing wind and solar fleet in the MISO region under repowering scenarios
So, what does it mean if a generator was decommissioned and stopped producing energy? The customer who needed the energy provided by the generator would still need it and another generator would be called on to provide that energy. That energy could be provided by a number of different generation sources, which may or may not be renewable and/or zero carbon.
This raises the question: if existing wind and solar generators decommissioned, what would provide that energy instead?
It’s difficult to predict exactly which power generator will be dispatched to provide that energy, but figure 5 does provide a sense of the order of magnitude effect that the repowering decisions of these power plants can have. Icons with gray shading show that a different, uncertain generation source could fill the capacity needs if renewable power plants were decommissioned.
3. Fuel mix and carbon intensity
Decommissioning would reduce the amount of renewable energy produced by the existing fleet of wind and solar generators, creating uncertainty around what would be called on to replace that energy. This uncertain generation is important because the fuel source that steps in to make up for a decommissioned wind or solar plants could be a power plant that emits a high amount of carbon dioxide (CO2) and thereby increase the amount of CO2 emissions incurred from generating electricity in the region. The amount of CO2 released per megawatt hour (MWh) of electricity generated is known as carbon intensity. The likelihood that this replacement generation would have high carbon intensity largely depends on what kind of resources are available and affordable, which will be driven by utility and state commitments, the ability for new generation to get through the MISO interconnection queue, the ability to locally site new generation, and a myriad of other factors.
The carbon intensity of a regional grid like the MISO transmission system is calculated by taking the tons of CO2 emissions produced by generators divided by the MWh of electricity produced during that time (tons CO2 / MWh generation). In a scenario where renewable generators provide a large portion of the total electricity produced and consumed, the carbon intensity would be relatively low because renewable energy resources produce no direct emissions during electricity generation. If you replaced that renewable generation with carbon-emitting generators, the carbon intensity would increase because the total tons of CO2 would increase while the amount of energy produced and consumed remains the same.
It is difficult to predict exactly what type of power plant would replace the generation of a decommissioned renewable generator, and therefore what the exact change in carbon intensity would be if a given wind or solar generator decommissioned. Instead of attempting to accurately model the exact behavior of all generators on the grid, this analysis uses marginal carbon intensity.
The market mechanisms used to determine which generators will sell energy to the grid rely on a resource supply stack. A resource supply stack is comprised of all of the bids that the generators make to sell electricity, arranged in increasing order. MISO will start with the cheapest resource and continue moving up the stack until they have enough energy to meet demand. The cost of electricity for the next additional MWh in the stack would be called marginal cost. The carbon intensity of the next resource in the stack that would be called on would be the marginal carbon intensity, which is the metric used in this analysis.
To understand how the carbon intensity of the MISO footprint might look different if renewable projects are decommissioned, this analysis takes the electricity that would have been produced by decommissioned generators with a carbon intensity of 0 tons CO2/MWh and replaces it with resources that have the average marginal carbon intensity of the MISO footprint in 2016. Figure 6 provides the resulting average carbon intensity of the Midcontinent region for each of the repowering scenarios.
Without the introduction of new generators, decommissioning renewable power plants decreases the ratio of renewable power plants to carbon-emitting power plants. This could result in carbon-emitting plants replacing renewable, carbon-free resources.
Figure 6. Carbon intensity of current MISO region fleet under different scenarios (MISO footprint fleet as of 2016)
Deciding to repower or decommission a renewable energy project can have system-level implications
As more and more projects face the decision to repower and decommission, it’s important to understand that each individual decision will contribute to a significant grid-wide impact. MISO and the region’s electricity providers can only deliver carbon-free electricity if it’s available to them. The more that existing carbon-free generation can be maintained, the more quickly the grid will move toward a carbon-free future. The decision to repower or decommission has impacts that extend beyond the immediate community in which the plant resides to the region’s electric grid and the carbon intensity of its generation mix. By aggregating the impact of these decisions, these scenarios demonstrate the magnitude of impact on the broader system. Understanding the system-level implications of repowering or decommissioning a single power plant can help inform state and local decision makers as they consider the full lifespan of renewable power plants in planning efforts.
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