Midwest Independent Transmission System Operator (MISO) is a nonprofit member-based organization regulated by the Federal Energy Regulatory Commission (FERC). As a Regional Transmission Organization (RTO), MISO provides electricity consumers in 13 states with regional grid management and open access to transmission facilities at a tariff closely regulated by FERC. MISO follows a cycle known as the MISO Transmission Expansion Plan (MTEP) that results in annual recommendations to proceed with expansion projects, subject to approval by the independent MISO board of directors. The Energy Storage Study—a targeted study carried out during the 2011 MTEP cycle—models several hypotheses surrounding pumped hydro storage (PHS), compressed air energy storage (CAES), and battery storage technologies and their impact on the MISO footprint. The study specifically explores reliability, market, and planning benefits that storage technologies could provide as well as the economic potential for storage technologies in MISO.
In the MISO region—which includes all or most of North Dakota, South Dakota, Nebraska, Minnesota, Iowa, Wisconsin, Illinois, Indiana, Michigan, and parts of Montana, Missouri, Kentucky, and Ohio—installed generation capacity is approximately 50% coal, 30% gas, 10% nuclear and 10% renewables. However, based on production costs in the region, the energy being produced is approximately 75% from coal, 15% from nuclear, and 10% from other sources. As a result of environmental mandates associated with coal plants and social choices in favor of renewable generation, MISO planners are being challenged to engage in more complex transmission studies that take regional and public policy variables into account. MISO's Energy Storage Study forms one part of this expanding agenda.
The Energy Storage Study objectives are to determine the economic potential for PHS, CAES, and battery storage technologies in the MISO region. The study will also estimate the price inflection point at which energy storage may become economically feasible. Finally, the study will suggest potential MISO energy and operating reserve markets enhancement products.
Three drivers provide the underpinnings of the MISO Energy Storage Study, as follows: 1) The ancillary services market (ASM) tariff needs a plan to accommodate long- and short-term storage technologies; 2) Increasingly, state renewable portfolio standards (RPS) programs mandate increases in energy use from renewable sources such as wind; and 3) MISO needs to improve storage modeling. During the Phase 1 study, MISO seeks first to evaluate the impact that additional stored energy resources could have on the MISO footprint and second to understand how that energy storage is best utilized. Two existing MISO planning models are used to identify these energy storage impacts. The first model is the Electric Generation Expansion Analysis System (EGEAS), designed by EPRI to determine the optimum (least-cost) integrated resource plan for a given demand level. The EGEAS model is used to identify circumstances when adding energy storage resources to the MISO footprint would be economically justified. The second model, a production cost model called PLEXOS, offers co-optimization functionality while modeling system-constrained economic dispatch in day-ahead and real-time markets with intra-hourly granularity. PLEXOS is used for deeper analysis to understand how energy storage resources can best be integrated in the MISO market. The Phase 1 study concentrated on modeling with EGEAS and involved some preliminary calibration and testing with PLEXOS.
The Energy Storage Study provides valuable feedback and lessons learned about EGEAS and PLEXOS modeling tools and their suitability for assessing potential MISO benefits from energy storage. Following are some important conclusions:
- Phase 1 of the Energy Storage Study has allowed MISO to become familiar with challenges inherent in modeling energy storage technology in a complex nodal market with an ASM. The study group has gained a good understanding about storage modeling using EGEAS, which is the primary MISO tool for transmission resource planning.
- Study results demonstrate that there is economic potential for energy storage in the MISO footprint. Benefits were observed in cases using both EGEAS and PLEXOS. These benefits will be explored in greater depth during Phase 2.
- Phase 1 results show that EGEAS is not the right tool to properly understand energy storage potential. Rather, the critical role for EGEAS is in identifying cases where storage is beneficial so that these cases can be analyzed further by PLEXOS in the Phase 2 study.
- PLEXOS experience during Phase 1 has allowed for fine-tuning the model parameters, and important lessons were learned regarding storage model setup.
Application, Value and Use
MISO planning is evolving from an emphasis on reliability and resource adequacy to responses to new market and regulatory challenges. Key challenges confronting MISO include implementing new renewable energy policies, reducing grid congestion, and incorporating new generation and demand-side resources—all while still meeting load growth requirements. Overlying these newer challenges are an aging transmission infrastructure as well as the need to keep cost allocation fair. Considerable groundwork in such areas has been accomplished in Phase 1 of the Energy Storage Study. This report will provide valuable reference material for transmission planners throughout the industry.