The news media has picked up the headlines from grid operators’ summer assessments, causing people to wonder if we will have rolling blackouts this summer. These headlines have prompted skeptics raise questions about renewables’ role in providing reliable, affordable electricity. It is impossible to predict how this summer will end, but it is worth looking into the details beyond the headlines.
Drought in the west grid, an increase of utility-scale solar in Texas and the inability to transfer excess capacity from south MISO to north region to the south are some of the factors that indicate renewables are not the only cause of firm load interruptions. To solve this puzzle, policy makers would be better served if they focused on demand flexibility.
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California – Elevated Risk
When California was going through a tough time in late August 2020, neighboring states either didn’t have much to support or chose not to by imposing wheeling restrictions. California Independent System Operator (CAISO) is in a much better situation this summer than last summer (See “stack analysis,” page 3), so why is CAISO in the news? One of the answers is the lack of water in the reservoirs due to a reduction in snowpack – 38% this year on April 1 compared to last year’s 60% on April 1.
Load increase, most likely driven by optimism that we are past the pandemic is a factor in CAISO’s probabilistic analysis that indicates a 15% chance in 2022 compared to 6% in 2021 of entering NERC’s Energy Emergency Alert 3. EEA3 indicates there is an imminent load shed situation, or the balancing authority is in the middle of a firm load interruption – the technical name for the blackout.
What about renewable’s role in CAISO’s assessment? CAISO is concerned by solar production. However, it is worth noting CAISO’s expectation of running into a low reserve margin at night when the sun sets. Solar is not available in the event of firm load interruptions.
Texas – Elevated Risk
From the western grid’s CAISO example to the Texas grid ERCOT, we know that partly due to population growth, ERCOT’s summer demand is constantly breaking records. ERCOT has almost 10,000 MW of operating reserve (Page 3 here), compared to the 1,000 MW required to trigger an EEA3 incident. ERCOT is therefore at high risk.
The first cause for concern is that ERCOT has half of its normal operating reserves – 5,000 MW in an extreme situation. Other concerns include the risk of ERCOT relying on more that 10,000 MW of utility scale solar and 2,000MW of battery storage. ERCOT is also concerned with solar production. It is important to note that if the sun goes down and clouds move in, the air conditioner load may also drop. Another solution is to allow residential owners with batteries, to provide those operating reserve.
Midcontinent ISO (MISO) summer assessment – High Risk
Shifting from elevated risky areas to a high-risk area in the Midwest, MISO states coal unit retirements (which is not new, as evident from MISO’s 2011 summer assessment, slide 9 here) and renewable penetration (MISO has 21% renewable capacity now compared to 9% in 2010) increase the likelihood of relying on emergency procedures. It is worth noting that MISO does not use the term “rolling blackouts” in these communications, but most presses include that in their headlines to grab the reader’s attention.
The attention generated by MISO’s summer warnings leads to some MISO states blaming other states. For instance, in Iowa, a news report suggests Alliant Energy “noted in a filing with the Iowa Utilities Board that Iowa, Minnesota, and Wisconsin have capacity that exceeds required reserves, while Illinois, Missouri, Indiana, and Michigan do not.” Some utilities are even suggesting there is no chance of rolling blackouts. Reporting from Milwaukee: “Wisconsin’s largest utility, We Energies, says the situation isn’t as dire as the report suggests because the state has excess power generation capacity.”
Even a state commissioner (Dan Scripps, chair of the Michigan Public Service Commission) in MISO has said, “Frankly, I’ve been dismayed by some of MISO’s statements.” In the light of these press statements, it is worth going back to MISO’s assessment for this upcoming summer.
MISO said: “Emergency resources and non-firm energy imports will be needed to maintain system reliability,” and followed up with this statement: “The need for emergency procedures will be impacted by the availability of non-firm resources.” If we compare the 2021 MISO summer assessment (slide 14) to the 2022 assessment, MISO has more generation in 2022 relative to 2021, even in a high outage scenario for the June-August months.
The key is that MISO says 3,700 MW of capacity is “stranded” in the South region, and an additional 7,000 MW of imports are “non-firm” for this summer. MISO doesn’t recognize the role demand response might play in reducing the need to conditions leading up the EEA3. Why? Because MISO is working to create a $10B transmission portfolio. In EEA2, MISO operators can call Load Modifying Resources to commit emergency demand response resources.
What is the possible solution?
To meet operational reserve requirements, demand response and flexibility must be incentivized. Our industry is primarily concerned with transmission. Many transmission utilities have equipment older than 60 years. Building new transmission takes 10 years. Entergy’s experience in MISO South shows that strong hurricanes can cause high-voltage transmission lines to be downrooted. It takes at most a year to bring those transmission lines online.
We must encourage demand reduction to reduce the chance of firm load interruptions. ERCOT can accelerate aggregated residential battery system participation in operating reserves. MISO must also insist that its members opt-in to their retail demand response programs in order to participate on MISO ancillary service markets.