Midwest Grid Operators Seek to Unlock Clean Energy Transmission on the ‘Seam’

The U.S. Midwest has massive wind power potential, and it’s a
growing target for solar power projects as well. What it lacks is

the transmission capacity
to carry that clean energy to market
—�a costly problem compounded by convoluted transmission planning
rules that have held back gigawatts of wind projects over the past
few years. 

That’s how Beth Soholt, executive director of the Clean Grid
Alliance, describes the challenge for Midwest renewable energy
developers, utilities and grid operators trying to expand the
region’s clean energy resources. “Our fundamental problem is a
lack of transmission capacity,†she said. “We need more
wire.†

After years of stymied growth, interstate grid operators are
looking for new ways to share costs and benefits across the
region’s energy stakeholders, she said. While that may be too
late to allow stalled wind projects to capture
expiring federal tax credits
, it’s still a major opportunity
to create the conditions needed to meet the country’s
massive demand
for carbon-free energy
 in the decade to come. 

Take this week’s creation of a joint
planning initiative
 between the Midcontinent Independent System
Operator (MISO) and Southwest Power Pool (SPP), meant to identify
transmission projects that could bring value to customers along the
“seam,†or border separating the two grid operators’
territories. That seam cuts from north to south across the
country’s wind-rich Great
Plains
, making it a key barrier to transmission lines that
could carry wind power to eastern markets hungry for carbon-free
energy. 

But getting grid operators to identify the value of transmission
projects crossing those borders, and thus allowing the utilities
that would build them to recover their costs, is a mind-bogglingly
complex task, Soholt said. 

(Image courtesy of MISO)  The â€˜triple hurdle’ of transmission
cost recovery 

First, would-be projects must be included in MISO and SPP’s
annual studies to determine if new transmission is needed, she
said. But those studies don’t necessarily consider
non-reliability issues, such as the value of the new generation
capacity they would introduce to each grid operator’s markets, or
whether the carbon-free nature of that energy helps states or
utilities meet carbon-reduction goals more cheaply than other
alternatives. 

Even if both MISO and SPP find that a cross-seam transmission
project meets those thresholds, it must then be subjected to a
joint process that tries to align one grid operators’ distinct
metrics and methods for measuring costs and benefits with the
other’s. “We call it the triple hurdle,†she said.

The Federal Energy Regulatory Commission (FERC) meant to ease
these kinds of disconnects with the passage of Order
1000 in 2011
, which mandated coordinated transmission planning
and cost-sharing between states, grid operators and utilities. But
those Order 1000-mandated processes haven’t delivered, according
to multiple grid policy experts. 

“We have not seen any significant inter-regional projects
since I was chairman of FERC in 2009,†Jon Wellinghoff, former
FERC chairman and current CEO of Grid Policy, told
Greentech Media
 earlier this year. 

Daniel Hall, central region director of electricity and
transmission for the American Wind Energy Association (AWEA),
agreed that the Order 1000-created coordinated system plan (CSP)
process between SPP and MISO hasn’t yielded fruit. “That
process has not to date identified a single project,†Hall
said. 

That’s a big problem for wind and solar power developers
targeting the region. MISO and SPP between them have roughly 210
gigawatts of generation in their interconnection queue, of which
about 85 percent is wind and solar, he said. But absent a process
to enable new transmission capacity costs to be shared across
multiple parties, those wind and solar developers are responsible
for paying for the transmission upgrades required to interconnect
them — and those costs can make or break a project’s economic
viability. 

Clean energy growth in the balance

Hall and Soholt cited the example of about 5 GW of renewable
energy projects, mostly wind farms, that were part of MISO’s 2017
generation interconnection queue. Because the transmission required
to allow those projects to connect to the grid wasn’t included in
MISO or SPP’s studies, the developers were saddled with the costs
of building it themselves. 

That’s forced almost of the projects to drop out of the
running, most recently the 157
MW Brickyard Hill
 wind farm to be built by EDF Renewables for
utility Ameren Missouri. Of the original 5 GW, only about 140 MW of
viable projects remain, Soholt said. 

Likewise, utility AEP was forced to cancel its 2 GW Wind Catcher
wind project in 2018, in part because it would require a $1.6
billion transmission upgrade, and return to state regulators with

a smaller-scale project
that didn’t require major transmission
builds. 

These processes are distinct from those that apply to merchant
transmission projects like the Grain
Belt Express or TransWest Express
, which are being developed
independently of the cost-of-service mechanisms driving
FERC-regulated grid operator policies, Soholt noted. While those
are gigawatt-scale projects connecting far-off wind power to
markets, “they’re just a drop in the bucket to what we really
need,†she said. 

Fixing these disconnects will require a lot of work, but it can
be done. Back in 2011 MISO staff recommended 17 transmission
projects, worth about $5.2 billion, in its “multi-value
projects†(MVP) portfolio, that have since expanded the
region’s wind power transmission capacity by about 25 GW, Soholt
said. As part of that broader expansion, 11 transmission-owning
utilities formed the “CapX2020 initiative†to coordinate their
cost-sharing approach to financing about 3,600 MW of that capacity,
she added. 

The MVP and CapX2020 process “are examples where people pooled
their collective need and came up with a package that worked for
everyone,†she said. That’s similar to Texas’s Competitive
Renewable Energy Zone policy, which helped bring new
transmission to carry
 
West Texas wind power to eastern
cities. 

But the capacity enabled by the MVP process is now more or less
tapped out, she said. AWEA and the Clean Grid Alliance are among
the renewable energy industry groups working with MISO and SPP to
modernize their transmission planning regimes to allow similar
cooperative efforts to pick up where it left off. 

Beyond individual efforts at MISO and SPP,
the newly launched ‘seam’ joint initiative could yield a new
set of processes for valuing projects across both grid operators’
systems, and hopefully a set of transmission projects that could be
included in their upcoming 2021 studies, she said.  

“If we can just get a planning process that can work to
surface projects, and then decide how we’re going to allocate the
cost, based on the values and benefits they’re going to bring to
the markets, then we have something to work with,†she said.
“But if we can’t execute on some of those pieces, we’re dead
in the water.†

Source: FS – GreenTech Media
Midwest Grid Operators Seek to Unlock Clean Energy
Transmission on the ‘Seam’