ISU Tour
MISO
Dale Osborn
July 18,2011
MISO Services
• Oversee the flow of power over the high voltage wholesale
transmission system in all or part of 13 states
• Provide independent wholesale transmission system access
• Manage power congestion
• Reliability coordination
• Regional transmission planning
• Operate day-ahead and real-time energy markets
• Independent market monitor
• Set reserve margin requirements
1-14-2011
1
MISO Wind
• MISO has about a 800,000 MW potential for wind
generation development- Eastern Interconnection Load is
960,000 MW
– Supply greater than demand by a factor of 40
– What can be done?
• MISO has 9,400 MW of Wind Generation Connected
– Almost all wind has a purchaser- Preferred Provider Agreement
as part of a Renewable Portfolio Standard or goal
– Prices in MISO too low for a merchant plant
– Gas prices are too low to sell surplus energy except over
existing transmission
– Transmission to PJM( east) and others is limited
4
Like on highways, when the wires are too
small there is congestion which raise prices
1-14-2011
5
Whose Wind Generation Is Chosen?
• Wind Generation cost about the same-$1,800,000/MW
• Wind energy depends on location
– 40% Capacity factor-orange-$80/MWH no tax credits
– 30% Capacity factor-yellow-$100/MWH no tax credits
– The difference could be use to build transmission to deliver wind
competitively for an RFP
– 200 miles is roughly the competitive distance with 345 kV
transmission- 500 MW to load line
– 1200 miles is the maximum possible today with 800 kV HVDC
with 19,000 MW required to load a three line system that would
not affect the underlying system.
– MISO can take about a 1500 MW contingency for resource loss,
single HVDC lines limited to 1500 MW to be confirmed with a
study
6
Wind Generation RFP
Competitive Zone
30-40%Capacity Factor Change
345 kV
Minneapolis
500 MW
345 kV Chicago
500 MW
800 kV HVDC
NYC
19,000 MW
Set circle center on wind location to determine the
Marketing Zone
7
Factors Affecting Wind Energy Marketing
• Wind energy is a social choice not an economical choice
in most parts of the U.S.- RPS or goals determine the
amount of wind being installed
• The price of natural gas determines the competitive level
– Present price $4/MBTU- Prices level across U.S.
– Price two years ago $8-14/MBTU-Prices high in the east
– Price difference between regions pay for transmission
• Economic Development and Jobs keep wind supplies
local
– Present values of $856,000 per MW of wind generation for
Economic Development cannot be offset by the better
performance of with the transmission cost
• Pancaked transmission costs exclude areas from
competition- ND, SD, RTO borders except MISO-PJM
8
–
New Transmission Creates Jobs
• U of Minnesota Duluth Bureau of Business
and Economic Research studied the
economic impact of 700 miles of
transmission Lines in MN, ND, SD, WI
CAPX2020 from 2010 to 2015 at cost of
$2B:
– $3.4 Billion in sales generated from construction related
activity
– $1.6 Billion in construction related wages
– $149 million in local, state and federal tax revenue
– $1.93 returned to economy for each dollar spent on project
– Nearly 8,000 jobs in peak construction year (2013) including
construction and indirect jobs
• Full study at www.capx2020.com
1-14-2011
9
For what levels of wind generation are there
MISO plans?
• The Renewable Portfolio Standard for the year 2025 is
23,000 MW
• The Generation Interconnection Queue is 50,000 MW
• The Regional Generation Outlet Study(RGOS) established
– Renewable Energy Zones to locate 23,000 MW of wind gen
• Midwest Governors Association
• State Regulators
• Stake Holders
– A overall transmission plan to deliver 23,000 MW of wind energy
– Economic information about the plan in the 2010 MTEP
10
All Energy Zones
DRAFT #9 "Master"
1-14-2011
11
13
Transmission and Substation Costs per Mw-mile by Transmission Voltage And Type of
Construction
4,000
3,600
3,200
Lowest cost options
$/Mw-Mile
2,800
2,400
2,000
1,600
1,200
800
400
0
345 kV
Steel
Wooded
Areas
600
2-345kkV
on Steel
1200
500 kV
1300
765 kV
765 HSIL
2600
5400
800 kV GIL 1200 mile800kV
HVDC
5300
6400
345 kV - 765 kv Delivery Capacity
with a 5% voltage drop
on a losseles line
3.5
3
PU SIL
2.5
2
1.5
1
0.5
0
0
50
100
150
200
Miles
250
300
350
Power Transfer Breakover by Voltage
$16,000,000
$14,000,000
$12,000,000
345 kV AC+600 Mw
1-765kV AC
1-800 kV HVDC
345 kV AC+1000 Mw
$8,000,000
$6,000,000
$4,000,000
$2,000,000
13,200
12,200
11,200
10,200
9,200
8,200
7,200
6,200
5,200
4,200
3,200
2,200
1,200
$0
200
Cost/Mile
$10,000,000
Power Transfer MW
16
HVDC Transmission Format Delivery Costs
$3,000,000
C
o
s M
t W
t 1
o 2
0
D 0
e
l m
i i
v l
e e
r s
Bipole
$2,500,000
$2,000,000
200 kV Super Conducting-spare
pole
800 kV HVDC Overhead
$1,500,000
1000 kV HVDC Overhead
Double Ckt
Bipole
$1,000,000
Two bipoles
with Metalic
Return
Bipole with
spare pole
$500,000
a
Bipole with
Metallic
Return
$-
10,000 20,000 30,000 40,000
Scheduled Power Transfer MW
800 kV Electric Pipe
800 kV Gas Insulated
Transmission
ONHY
NYPP
SUNC
VP
PJME
VACAR
WPSC
PJMS
MIDW
WEPLK
PJMW
CEC
STHRN
DETED
FE
LBWL
SOLAE
SPPW
AEP
SOLAW
DP&L
SASK
CGE
LG&E
EMDE
DQE
DPC
ARLM
HEC
IP&L
PSI
TVA
SPCIUT
WRI
NIPS
BREC
MGE
GRE
SMMP
HUC
WPL
SIGE
WPPI
NSP
MPC
ASEC
INDN
ALWST
COED
KCPL
MIPU
WPS
KACY
WEP
MPW
OTP
MPL
MIDAM
CIL
EEI
NWPS
ILPC
SIPC
MHSP
CIPS
WABNI
SPRIL
WABD
AUEP
MDU
NPPD
LES
OPPD
$55
Average LMPs for Base, 765kv Overlay, and WIND
$50
$45
$40
$35
Avg LMP - 765kV Overlay
Avg LMP - Base Case
Avg LMP - WIND
$30
Loop Flow Patterns
Interface AC Flows without an Overlay
Interface Flows with an Overlay
including HVDC
Without Overlay
P
R
I
C
E
Load
Savings
With AC Overlay
With HVDC Overlay
Gen
Revenue
Difference
Distance
HVDC Is Easier To Regulate Than AC
• Users are identifiable
• Terminals look like generators( supply-injection) and
loads( receipt-withdrawal)
• Existing AC system processes can be used to allocate
AC costs
• DC costs linked to the schedule and who scheduled
HVDC Easier to Operate than AC for Long Distance
Power Transfers
• HVDC can be loaded to its limit
– Cannot be overloaded due to contingency- easier to operatealways know what is available for power transfer
– AC power delivery may be decreased due to contingencies in
intervening systems- power transfer capabilities can change
hourly
– HVDC only dependent on AC near terminals
HVDC Can Do Things That AC Cannot
• HVDC can skip over congested areas without having to
pay a toll to fix the transmission system in intervening
areas that are not involved in the market transactions
• HVDC can inject energy strategically
MISO Wind Variability Management
• Wind rich areas do not have much load or generation to
manage the variability of the wind- problem
• Managing wind variability at presently projected levels is
a political and organizational problem not a technical
problem- cooperation solves a good part of the problem
• 5-6% energy curtailment of wind
• Solutions
– MISO is one area of about 100,000 MW
– MISO has a 5 minute dispatch period
• Less error can occur if adjustments are made every 5 minutes than
every hour
• Total wind output cannot change too much in 5 minutes
– Geographic diversity of wind and load
25
Wind Diversity
Wind Correlation vs Distance
1.1
Calculated from data provided
though the DOE Eastern Wind
Integration and Transmission
Study
1
0.9
0.8
Wind Correlation
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
0
50
100
150
200
250
300
350
400
450
500
Distance Between Sites (Miles)
Poly. (North - South)
550
Poly. (East - West)
600
650
700
750
800
27
Study System ELCC Scenarios (1 - 4)
Existing & Overlay Transmission Tie Limits - ELCC (%) {Shaded Area shows Increased ELCC of Overlay}
40%
35%
32.8%
29.8%
30%
27.7%
27.3%
25.4%
25%
28.0%
27.0%
28.3% 28.1% 30.5%
Overlay
Tie
26.6%
24.1%
26.4%
24.8%
24.6%
24.2% 23.8%
22.7%
20%
20.4% 20.6%
20.2% 19.9%
18.8%
15%
16.0%
10%
5%
0%
Scenario-1 System
Scenario-2 System
2004 Profile
Scenario-3 System
2005 Profile
2006 Profile
Scenario-4 System
Existing
MISO Wind Diversity
• Capacity credit in 2009 8%
• Capacity credit in 2011 12%
• Difference due to wind in Michigan, Indiana and Illinois in
addition to Buffalo Ridge in southwest Minnesota
• Adding more generation in an area with significant wind
generation decreases the capacity credit as the
probability of loss of a larger amount of generation is
increased.
Transmission and Wind Diversity
• It may be possible to build HVDC transmission of about
1500 MW in capacity to exchange the diversity of wind
• Possibly paid for by
– Reduction in generation capacity and fuel needed to manage
wind generation
– Improvement in the capacity credit for wind that reduces the
need for other types of generation
– Reduction in load on peak compared to the sum of two areas a
long distance apart
– Savings in the operational cost of other generation due to cycling
that causes thermal stresses and increased maintenance
• HVDC could span the East-West ties and make wind more
manageable in the west also
30
Inputs
• Economic development costs- U of Illinois State
– $650,000 per MW for wind for construction
– $38,000/yr for maintenance
•
•
•
•
HVDC line, terminal, ac substation costs
CT Generation costs, O&M, heat rates
Wind Generation costs
EWITS Wind Diversity factors for variability and capacity
credit
• Annual carrying charge 15%- annual values
• Discount factor-8%- used for present value
Why Economic Development
Should Be Included
in Analysis
First Year
Benefit/Cost Scenario
Wind Economic Value including
20.2 Economic Development values
1.8 Without Wind Economic Development
Without Wind Economic Development
but with carbon dioxide
3.1 elimination credit supported by transmission
15.8 With transmission economic development.
Governors and legislatures have recognized the value of eco
development for wind generation, but the regulation function
has not used it. Projects could be justified and carbon dioxi
production reduced if economic development were allowed.
Price and Quantity of Sources and Sinks Determine Transmission Requirements
West to East Interface Flows OH-PA
25000
20000
MW
15000
10000
5000
Jan Feb
Mar
Apr
May
Jun Jul
Aug
Sep
Oct
Nov Dec
0
0
720
1440
2160
2880
3600
4320
5040
Hour of the Year
5760
6480
7200
7920
8640
Transmission Overlay Design Workshop
Example Interface Duration Curve
Interface Flow
3500
3000
2500
2000
Transmission Capacity designed to
deliver 80% of desired energy flow
1000
500
-1000
-1500
-2000
Hours
WAPA-MINN
8541
8297
8053
7809
7565
7321
7077
6833
6589
6345
6101
5857
5613
5369
5125
4881
4637
4393
4149
3905
3661
3417
3173
2929
2685
2441
2197
1953
1709
1465
977
733
489
1221
-500
245
0
1
MW Flow
1500
20%
Strong
20%
20%
Strong Distributed Offshore
Most
Economical West
+ RPS
30%
What Can Be Done with the Surplus
•
Reduce the generation
– Paying for the generation but not fuel
– Must have transmission to deliver renewable energy to the load. The
system was designed to deliver from the fuel generation that most likely in
another location.
•
Sell the surplus for a profit
– Profit helps reduce the generation payments
– Need to be able to deliver energy to the market- pay for transmission-need
above $6/MBTU to pay for transmission in the energy market, other
products may allow justification of transmission with lower gas prices.
– Need access to the markets- need a seller and a buyer pair
•
Store the energy
– Use surplus off peak capacity to drive a CAES plant with a 50% capacity
factor- would work in the west today
– Manitoba offers a way to “store” energy, need transmission in ND,SD
Questions
•
•
•
•
•
Dale Osborn
Principle Advisor
Regulatory and Economic Studies
Email: dosborn@misoenergy.org
Phone:651-632-8471
40