MISO Market Transformation The Intersection Of Renewables, Transmission And Technology Raj Singamsetti Executive Director of Portfolio Strategy, ACES
Agenda: Impacts of Emerging Technologies Impacts of New Technologies Fracking (Market Prices) Energy Efficiency Declining Costs of Wind & Solar Generation Impacts of New Technologies Clean Line HVDC Transmission Energy Storage
Who Is ACES? Owned By 21 G&Ts and 1 Distribution Co-Op Provide Services to Additional 40+ Customers Municipals, Cooperatives, IPPs, Financial Institutions, Joint Action Agencies, Renewable Developers Individual Portfolio Management; Combined Assets Total: 50,000 MW of Generation From 300 Plants 50,000 MW of Load 3.0 Bcf/Day Peak Natural Gas 4 Regional Trading Centers Arizona, Indiana, Minnesota, and North Carolina Approximately 250 Employees
ACES Business Model ACES is Active in the National Marketplace Does Not Trade Its Own Book ACES Operates Similar to a Fund or Trust Manager ACES is Owned By Not-For-Profit Entities Shares Similar Values as Members ACES Keeps Costs Down Sharing Costs of Systems and Resources Across Members/Customers ACES’ Approach to Portfolio Optimization & Risk Management is Participatory & Hands-On
Natural Gas Forward Curve
Shale Producer Cost Example
Forward Gas Prices 10-Year Strip, Consumers and Chicago Citygate: ~$2.85/MMBtu NE Gas Averages 12% Lower
Impacts of Energy Efficiency
Energy Efficiency Savings From Electricity Efficiency Programs in 2015 Totaled Approximately 26.5 Million MWh Source: ACEEE
Reserve Margin Requirement (GW) MISO Load Decline Demand Forecast (GW) Reserve Margin Requirement (GW) Supply (GW) Reserves (GW) 2015/16 PY 127.3 145.5 150.3 23.0 (18%) 2016/17 PY 125.9 145.1 148.8 22.9 (18.2%) 2017/18 PY 125.0 144.8 148.5 23.5 (18.8%) 2017/18 Minimum Reserve Requirements: 15.8%
Declining Cost of Wind Decrease of 66% Source: Lazard
U.S Installed Wind Source: EIA
MISO Wind Capacity Source: MISO
Declining Costs of Solar Source: Lazard
Cumulative U.S. Solar PV Installations Source: NRCO / ACES
MISO Solar Capacity Source: MISO
Changes in Locational Marginal Price Shapes New Products Morning Ramp 7:00 - 8:00 Duck Belly 9:00 - 16:00 Evening Ramp 17:00 - 22:00 CAISO / WECC
Low Energy Prices MISO Minn Hub’s Low Prices Reflect Wind Penetration
Clean Line HVDC Projects Source: cleanlineenergy.com
Current Status of Projects Contingencies Rock Island Grain Belt Plains & Eastern Project Cost $2.0 Billion $2.2 Billion $2.5 Billion Project Miles 500 780 700 Project MW 3,500 4,000 Announced PPA MW 200* 100** FERC Approval? May 2012 May 2014 DOE State Permitting Waiting on Iowa, IL Supreme Court Waiting on Missouri Arkansas Contesting Interconnect Approval Needed PJM, MISO SPP, MISO, PJM SPP, MISO, TVA *Missouri Joint Municipal Electric Utility Commission **Tallahassee, FL (50 MW), East Texas Cooperatives (50 MW Option); TVA Has Agreed to Consider Project
Who Is Buying ? Simplify and Standardize Direct Renewable Energy Transactions Address Unique Renewable Contract Needs of Internet and Data Center Companies
Corporate PPA Locations
U.S. Storage Projects Source: UBS
Common Theme: Rapid Decline in Costs https://www.greentechmedia.com/articles/read/everyone-is-revising-electric-vehicle-forecasts-upward So why exactly is the forecast changing so drastically? Battery costs are coming down fast. We're already ahead of lithium-ion battery costs projected For 2030. And with 10 battery gigafactories under development around the world, battery costs and prices are expected to further outpace projections. Wood Mackenzie predicted that the cost of battery storage would decline to $200/KWh by 2030. As you can see in the graph, Tesla, with GM and Nissan closely behind, has surpassed that mark.
Revenue Streams Energy Arbitrage Regulation Payments Storing Energy When Market Prices Are Low, Dispatching When Prices Are High Value is Dependent on Wholesale Power Prices Regulation Payments Compensation Varies From Market to Market PJM Dynamic Regulation Signal (RegD)
Deferring Transmission Investment Provide Local Generation During 20 to 30 Peak Power Demand Days Per Year One of the First Projects in the Nation to Be Proposed Solely to Cost-Effectively Defer Transmission Investment http://www.utilitydive.com/news/alectra-utilitie http://www.utilitydive.com/news/aps-to-deploy-8-mwh-of-battery-storage-to-defer-transmission-investment/448965/s-ceo-someones-going-to-cannibalize-our-business-it-ma/504934/
Market Phases For Technology Adaption in Markets Phase 1: Market Experiments Phase 2: Market Integrates Phase 3: Market Coordinates
Questions?