08 August 2022 |

Important transmission pt. II


Today, I wanted to take the opportunity to spend another beat on a big deal we covered earlier this week. It’s not venture capital, but MISO’s newly approved $10B transmission build-out in the middle of the country is one of the bigger stories in energy in 2022 for me so far. The Long-Range Transmission Plan (LRTP) study is the largest grid expansion project in U.S. history, so it’s worth some additional consideration!

I was also lucky enough to get input from Ginger Hodge, a consultant at Customized Energy Solutions covering the Midwest region of the U.S. Customized Energy Solutions provides energy market analysis and consulting to system operators and other energy market players nationwide.

Ginger offered her perspective on some of the questions I posed in my first piece of coverage on the matter, and added additional perspective as well: 

To get people up to speed, how does this transmission build out tie into the push to develop more renewable energy?

The Long-Range Transmission Plan (‘LRTP’) study is part of MISO’s broader Reliability Imperative and is driven by the changing generation portfolio (increasing baseload generation retirements [like coal power plants] and renewable resources seeking to interconnect to the MISO system). And the generator interconnection queue is experiencing significant churn and backlog with projects dropping out due to high network upgrade costs.  

MISO needs more transmission to accommodate the retirements and new interconnections. The LRTPs are expected to help; however, MISO is also anticipating that a very large number of projects will enter the 2022 queue cycle (application deadline is September 15). The additional interconnection capacity enabled by LRTPs could be consumed quickly.

Nick’s note: For additional context on how lack of transmission constrains and curtails renewables, check out this recent article on dynamics in Texas.

What does it take to get new ‘deals’ to build this much new infrastructure approved? 

MISO has been performing the LRTP study since early to mid-2020, almost two years, with regular stakeholder meetings to provide updates and solicit feedback and recommendations. Even before that, MISO started developing the current set of Future scenarios in August of 2019. 

Once the LRTP projects were “final”, MISO provided a final review at the Planning Advisory Committee (PAC) which is the highest-level stakeholder forum for planning issues, and the stakeholders voted (through sector representatives) to recommend that MISO take the LRTP Tranche 1 portfolio to the Board for approval. 

The LRTP Tranche 1 Portfolio was then presented to the System Planning Committee (SPC) of the Board twice for review, and the SPC voted on June 30 to recommend that the Portfolio be taken to the full Board to consider final approval. Then, as you know, the full Board met on July 25 and approved the LRTP Tranche 1 Portfolio.

Is this a model for other areas across the country to follow? Or unique to that region and its dynamics for some reason?

MISO is a leader in transmission planning, and the LRTP study could be a model for other regional transmission operators (‘RTOs’) and transmission planners.  The FERC NOPR and anticipated subsequent order on transmission planning and cost allocation could include items from MISO’s LRTP, and it will be interesting to see how the anticipated order and compliance plans shape up.

Where else is new / more transmission most critical? In parts of Texas for instance, where there can be significant price discrepancies like we’ve seen recently? 

Theoretically, this type of study could be useful for any RTO that’s experiencing similar trends (increasing power plant retirements and renewable interconnection), large price differences across the region, or lack of connections to seams partners. The LRTP Study was initially intended to address regional and interregional issues, but MISO doesn’t have a clear plan to tackle interregional issues. 

The MISO-SPP Joint Targeted Interconnection Queue (JTIQ) Study is another study that others should be watching for potential adoption and application to other seams. It was performed in parallel to the LRTP and resulted in a portfolio of 7 projects (2 of which were also identified in the LRTP), and the projects are expected to be approved in 2023. 

Texas could benefit from increased transfer capability with neighbors. During the February 2021 cold weather event, MISO and SPP were able to transfer nearly 13,000MW via their ties, while ERCOT didn’t have the ability to import thousands of MWs and had to shed significant amounts of firm load.

The net-net

In sum? Coupled with news that Democrats in Congress are in array and look set to pass the IRA, which will provide $369B to climate tech and energy in the U.S., the second half of the year is setting up to be chock full of major milestones for climate funding: 

  • MISO’s transmission build-out? The biggest ever investment in new transmission.
  • The IRA with $369B for climate, climate tech, and energy? The biggest such bill ever.

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