View
10
Download
0
Category
Preview:
Citation preview
misoenergy.org
Highlights• Significant progress was made in RAN Phase 1 to improve availability by 5 GW to 10 GW during times of need
• Multiple initiatives are underway to address system needs for availability, flexibility and visibility
• MISO is pro-actively ensuring reliability in an increasingly diverse portfolio
D E C E M B E R 2 0 1 9
ALIGNING RESOURCE AVAILABILITY AND NEED
Ensuring reliable and efficient operations every hour of the year
Contents
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
History of Resource Adequacy at MISO . . . . . . . . . . . . . . . . . . . . . . . . . 4
Resource Adequacy Timeline and Highlights: . . . . . . . . . . . . . . . . . . . . . . 4
Need for RAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Key Industry Drivers of Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Explore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Evaluation of Reliability Requirements and Metrics . . . . . . . . . . . . . . . . 10
Load-Modifying Resources Performance Requirements . . . . . . . . . . . . . 10
Fuel Assurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Forward Market Mechanism. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Resource Adequacy Construct (8760) . . . . . . . . . . . . . . . . . . . . . . . 14
Decide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Transmission Service Deliverability . . . . . . . . . . . . . . . . . . . . . . . . . 16
Enhancement to Emergency Pricing . . . . . . . . . . . . . . . . . . . . . . . . 16
Do . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Resource Accreditation Improvements . . . . . . . . . . . . . . . . . . . . . . . 18
Multi-day Operating Margin (MOM) Enhancements . . . . . . . . . . . . . . . .19
Done . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Multi-day Operating Margin (MOM) Forecast Initial Report . . . . . . . . . . . 21
Accreditation of Resources on Long-Term Outage . . . . . . . . . . . . . . . . 21
Load-Modifying Resources Availability and Visibility . . . . . . . . . . . . . . . 22
Outage Coordination Enhancements . . . . . . . . . . . . . . . . . . . . . . . . 22
MISO's Stance on RAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
1
Executive Summary
MISO’s vision is to be “the most reliable, value-creating RTO.” Since its inception, MISO has converted the capacity
from committed resources to energy in order to reliably and efficiently operate the Bulk Electric System. Beginning
in 2016, MISO began experiencing a marked increase in the number of Maximum Generation Emergency (MaxGen)
emergencies. As a result, the Resource Availability and Need (RAN) initiative was established to identify near-term
solutions to increase the conversion of committed capacity resources into energy during times of need. Five key
drivers of change were identified as major contributors of increasing MaxGens emergencies. These five drivers
identified market conditions which would impact reliability in the near-term and become even more prominent in
the future.
In early 2019, MISO released the MISO Forward report, which looks at the impacts of three major trends --
de-marginalization, decentralization and digitalization. The 3Ds will intensify the operational impact of these five
drivers of change as MISO moves into the future. Solutions implemented now must not only address near-term
issues, but they must also take the future portfolio into account. To that end, RAN is exploring one of the most
complex and critical questions in the industry: What changes should MISO make to address near-term reliability
challenges while also preparing for a future portfolio likely to be comprised of far less thermal dispatchable
resources, more emergency-only resources, and a large percentage (e.g., 40 percent) of renewable resources?
Additionally, how does MISO sequence and align enhancements to not only address near-term issues but also
provide an effective progression of changes over time?
This transition away from legacy thermal units to new
technologies, including more intermittent and emergency-
only resources, requires planning, markets and operations to
also evolve. MISO and stakeholders must work to identify and
implement new solutions to address the challenges and take
advantage of the opportunities presented by the unprecedented
scale and speed of industry change.
This paper will describe the Resource Availability and Need
(RAN) initiative and MISO's plan to address issues in the
Explore, Decide, Do, Done framework.
2
The RAN program focuses on enhancements that help create better availability, flexibility and visibility
of resources for MISO system needs. MISO created three guiding principles that guide our longer-term
preparations while also informing more near-term enhancements.
1. Reliability Needs and Requirements: Reliability criteria must reflect required capabilities in all horizons—
all hours matter
2. Reliability Contribution: Members take responsibility for meeting reliability criteria with resources that
will be accredited based upon the resource’s ability to deliver those capabilities
3. Alignment with Markets and Infrastructure: Market prices must reflect underlying system conditions
and resources must receive appropriate incentives for the capabilities they provide; infrastructure should
enable efficient utilization of resources
As initiatives flow through the Explore, Decide, Do, Done framework, solutions will be evaluated in
accordance with these guiding principles.
AVAI
LABILITY VISIBILITY
REQUIREMENTS
FLEXIBILITY
The availability of transmission and energy resources to meet
requirements at all hours
The ability to see and coordinate relevant resource, demand and
power flow attributes on operating and planning horizons
The ability to anticipate and adapt to frequent and significant changes in
resource output and demand, including the enabling of new sources of flexibility
3
• Multi-day Operating Margin (MOM) Forecast Initial Report
• Accreditation of Resources on Long-Term Outage
• Load-Modifying Resources Availability and Visibility
• Outage Coordination Enhancements
• Evaluation of Reliability Requirements and Metrics
• Load-Modifying Resources Performance Requirements
• Fuel Assurance
• Forward Market Mechanism
• Resource Adequacy Construct (8760)
• Transmission Service Deliverability
• Enhancement to Emergency Pricing
• Resource Accreditation Improvements
• Multi-day Operating Margin (MOM) Enhancements
Explore Decide Do
Explore Decide Do
Explore Decide Do
THESE ITEMS CAN BE TRACKED WITH THE INTEGRATED ROADMAP ON OUR WEBSITE
Done
4
History of Resource Adequacy at MISO
The term “Resource Adequacy” refers to the electric industry’s ability to serve peak demand while also providing
enough excess supply to achieve an agreed-upon level of grid reliability. In the MISO footprint, the responsibility
for achieving resource adequacy rests with Load Serving Entities (LSEs) with oversight by states as applicable by
jurisdiction. MISO facilitates these efforts by administering tariff-defined Resource Adequacy Requirements, which
LSEs use to demonstrate their ability to serve peak demand and provide a sufficient margin of excess supply. These
requirements help to ensure that the MISO footprint will have ample supply to meet demand in all time horizons.
In 2004, MISO began phasing in its approach to support resource adequacy in its footprint. MISO’s approach was
designed to complement state mechanisms as a majority of MISO members operate within traditionally regulated
cost-of-service utility constructs. Initial efforts focused on energy pricing improvements to enhance reliability
across the region.
In 2008, a monthly Voluntary Capacity Auction was implemented to allow Load Serving Entities (LSEs) to efficiently
buy and sell residual capacity in advance of each month. Since 2011, the Federal Energy Regulatory Commission
(FERC) has required that MISO's resource adequacy construct include locational components. In 2012, FERC
approved replacing the monthly auction with the annual Planning Resource Auction (PRA), which established seven
Local Resource Zones. In 2018, MISO added tariff provisions to incorporate External Resource Zones, as well.
Going forward, MISO must address whether there is continued value in refining MISO’s existing resource adequacy
construct, or whether future reforms and enhancements must be focused on operational adequacy and energy
market reforms.
RESOURCE ADEQUACY TIMELINE AND HIGHLIGHTS
2004: FERC approves MISO’s original transmission and energy market tariff, with a short-term resource adequacy
provision. MISO is directed to develop something more permanent.
2006: With FERC’s approval, MISO develops a phased-in approach to establish a permanent resource adequacy
mechanism. Phase I develops an ancillary services market for contingency reserves; Phase II calls for a long-
term integration of shortage pricing into the energy markets.
2007: Phase I of MISO’s ancillary services market is approved. MISO proposes Planning Reserve Margin (PRM)
requirements for LSEs on an LSE-by-LSE basis for Phase II.
5
2008: Phase II of MISO’s resource adequacy construct is approved, with the caveat that MISO must consider
multiple reserve margin methodologies and operate with a regional approach.
2008: Per FERC directive, MISO proposes an assessment to financial settlement charges on LSEs that fail to
satisfy their resource adequacy requirements as well as a voluntary capacity auction to allow LSEs with
insufficient capacity to meet these requirements with the opportunity to purchase capacity from market
participants with excess planning resources. FERC urges MISO to take proactive steps to incorporate
locational market mechanisms into its resource adequacy construct.
2011: Per FERC request, MISO proposes several changes to its resource adequacy construct including: (1) an
annual resource planning process; (2) options for LSEs to meet their requirements; (3) establishment of
seven local resource zones; (4) a minimum offer price rule.
2012: FERC accepts the major elements of MISO’s resource adequacy construct for an annual Planning Year
with a two-month forward period and a vertical demand curve; it also accepts MISO’s locational market
mechanisms. FERC rejects MISO’s proposed mandatory auction requirement and the Minimum Offer Price
Rule (MOPR) proposal.
2016: MISO proposes a Competitive Retail Solution (CRS) to address emerging resource adequacy needs in
competitive retail areas.
2017: FERC rejects CRS, expressing concerns that bifurcating MISO’s resource adequacy construct into two
separate markets could create uncertainty in terms of price formation, market efficiency and transmission
allocation. MISO then helps affected states develop long-term resource adequacy processes.
2018: MISO modified its Resource Adequacy construct to model and price External Resources in External
Resource Zones to prevent inequity and address potential reliability concerns. MISO paired creation of
these zones with Historic Unit Considerations (HUCs), which prioritizes holders of historic transactions for
distribution of excess revenue if there is price separation.
2019: FERC accepts MISO’s filing to make enhancements to LMR testing and registration along with
improvements to generator outage coordination. MISO released the MOM Forecast to provide a seven-day,
forward-looking report to Market Participants. The report forecasts expected resources and obligations
to assist in resource commitments. Additionally, MISO submitted a filing to provide clarity on long-term
outages within the Planning Resource Auction.
Need for RAN
The RAN initiative, instituted in 2017, came as a response to the increasing number of MaxGen emergencies
events as outlined in MISO's 2018 Issue Statement Whitepaper. MISO recognized that changing market
conditions were impacting the resource fleet’s operational characteristics and challenging the reliability and
efficiency of market outcomes. At the RAN initiative inception, a total of 12 emergencies occurred beginning
in the 2016-17 planning year through half of the subsequent planning year. That trend has continued as MISO
entered MISO Market Capacity Emergency procedures 27 times through the summer of 2019. These events have
occurred multiple times in every season reinforcing the notion that “every hour matters.” This differs greatly from
the assumption that the system will be reliable for all 8,760 hours of the year as long as utilities have enough
generation capacity to meet demand on the "peak hour" of the year, which typically occurs on an exceptionally
hot and humid summer day. This white paper summarizes MISO’s actions regarding future stakeholder
discussions during which it will continue to work collaboratively to enhance availability, flexibility and visibility.
MISO Maximum Generation Alerts
3 3
0 0 8 8 9 2+
2015/16
SUM
M
AUT
WIN
T
SPR
2014/15 2016/17 2017/18 2018/19 2019/20
1
2 2 22 2
4
3 3
SUM
M
AUT
WIN
T
SPR
SUM
M
AUT
WIN
T
SPR
SUM
M
AUT
WIN
T
SPR
SUM
M
AUT
WIN
T
SPR
SUM
M
AUT
WIN
T
SPR
MISO Maximum Generation Emergencies
6
Wind Volatility Wind
NSI
6/1/15 9/1/15 12/1/15 3/1/16 6/1/16 9/1/16 12/1/16 3/1/17 6/1/17 9/1/17 12/1/17 3/1/18
6/1/15 6/1/15 6/1/15 6/1/15 6/1/15 6/1/15 6/1/15 6/1/15 6/1/15 6/1/15 6/1/15 6/1/15
14,00012,00010,0008,0006,0004,0002,000
0
14,00012,00010,0008,0006,0004,0002,000
0
Key Industry Drivers of Change
In early 2018, MISO released the RAN Issues Statement Whitepaper, which outlined drivers of change with a
significant impact on current operations and practices. While RAN has implemented multiple solutions, those five
Drivers of Change are still relevant and are being accelerated by the 3Ds. The growth of variable energy resources
(related to De-marginalization) along with the proliferation of Load-Modifying Resources (LMRs) and other
Distributed Energy Resources (Decentralization) are clearly linked to Drivers of Change 1, 3, and 5.
Retirements and increasing outage levels (both planned and forced) require MISO to
operate with less available capacity than in the past. The effect is a reduction in the
redundancy provided by additional resource availability. For example, daily average
energy offers were down 8 GW in Planning Year 2016/17 over Planning Year 2015/16.
This reduction reflects a 4 GW net resource retirement and a 4 GW (23 percent)
increase in the average MWs on outage.
The MISO system has year-round load and supply needs, but is planned with a summer-focused capacity
commitment. Lower overall capacity levels and higher outage rates have reduced available capacity in non-summer
periods. As a result, the MISO footprint has experienced frequent MaxGen emergencies outside summer. This
imposes a growing challenge to ensure sufficient available capacity in those periods. Of the 27 recent MaxGen
emergencies, 74 percent of them occurred outside of the summer months.
DRIVER ①
DRIVER ②
AGING AND RETIREMENT OF THE PORTFOLIO’S GENERATING UNITS
OUTAGE CORRELATION
Coal
2005
13 7242
98234
786
1081 1024880 931
1929
7001
953
44104575
170
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Gas Nuclear Oil Diesel Other
73%
22%
2%2% 1%
Coal
2005
13 7242
98234
786
1081 1024880 931
1929
7001
953
44104575
170
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Gas Nuclear Oil Diesel Other
73%
22%
2%2% 1%
Coal
2005
13 7242
98234
786
1081 1024880 931
1929
7001
953
44104575
170
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Gas Nuclear Oil Diesel Other
73%
22%
2%2% 1%
Generation Retirement Trend by Fuel Type
(Capacity in MW)
Total Approved Retirement since 2005 (24.3 GW)
7
LSEs committed more than 11 GW of LMR (demand response and behind-the-meter generation) cleared in the
PRA in 2019. This was 9 percent of the summer peak load forecast. These 11 GW of resources are not available to
MISO’s operators without the declaration of a MaxGen emergency under the existing framework. Overall, LMR
performance has fallen short of its performance requirements during emergencies. Additionally, LMRs can have
notification times up to 12 hours and can have limited or no availability outside of summer. However, based on
FERCs approval of the RAN Phase 1 filing relating to LMR performance and generator outages, these resources
are now required to offer their true availability and shortest notice time throughout the year. LMRs also must
demonstrate their ability to curtail load on an annual basis.
DRIVER ③
MISO now relies more heavily upon uncertain or otherwise non-committed supply resources. In the last few
years MISO has become a significant importer of energy from neighboring systems. About half of this energy is
scheduled in real time with submission of interchange due just 20 minutes prior to each 15-minute interval. While
MISO has arrangements in place for the purchase of emergency energy from neighboring systems during declared
emergency conditions (as occurred in January 2018), availability of such energy remains highly uncertain. While the
regions have successfully managed these issues to date, there could be increased risk to reliability if steps are not
taken to address the changing future portfolio.
Variable energy resources (e.g. wind and solar generation), an increasingly important resource category, has
different operational characteristics than legacy thermal resources. Renewable resources are accredited based
on historic contribution during past system peaks, but there is no assurance that the accredited capacity will be
available during a particular emergency event. If wind or solar happen to contribute less during a particular time
of need than in prior instances, the difference must be made up elsewhere. These resources, at times, will likely
help conditions by producing more than accredited, so it is important to understand and plan for the operational
implications of future growth of renewables .
DRIVER ④
DRIVER ⑤
GROWING RELIANCE ON UNSCHEDULED RESOURCES
GROWTH OF VARIABLE ENERGY RESOURCES
GROWTH IN DEMAND SIDE AND OTHER EMERGENCY-ONLY CAPACITY
8
Seek to understand opportunities and challenges and identify new capabilities that will sustain and enhance MISO's Value Proposition
Leverage insights to conduct studies and analysis that guide economic and reliability decisions
Prioritize the execution of clear solutions
Initial implementation has been completed. MISO collaborates with stakeholders to make continuous improvements to maximize value
Done9
10
EVALUATION OF RELIABILITY REQUIREMENTS AND METRICS
As part of MISO's assessment of risk and opportunities
in a transforming portfolio, MISO is evaluating how
to analyze and identify appropriate future reliability
requirements and metrics to meet MISO's needs -
Availability, Flexibility, and Visibility. This evaluation
should shed light for planning purposes on the type
and quantity of specific capabilities needed from
resources across all hours of the year. As an example,
this evaluation of capabilities would not only address
generic flexibility related services such as ramping,
but it would also address how much and what type of
ramping the system needs across various time horizons
(immediate, within an hour, within the day and across
days).
Ramping is one example of a capability needed to
operate the system reliably in a portfolio where
at least 40 percent of the generation comes from
renewables. MISO’s studies - Renewable Integration
Impact Assessment (RIIA) and Portfolio Evolution
Study simulations - give an indication of these needs
and show the magnitude of extreme ramps will grow.
Additionally, the RIIA study shows frequency regulation,
system stability and local voltage support will
become more challenging with increasing renewable
penetration. MISO’s existing planning mechanisms,
markets and operational processes are sufficient to
address these needs at the region’s current penetration
of renewables. However, all of these tools will need to
be reevaluated and potentially revised as renewables
continue to grow in the region.
These assessments and related engagement with
stakeholders are of the highest priority while MISO
also continues to advance other directionally aligned
enhancements that are more near-term in nature.
Next Steps
• Work with stakeholders to evaluate the effectiveness
of current reliability requirements and metrics to
address risk and opportunities within a transforming
portfolio
• Based on findings and input from stakeholders,
recommend changes to reliability requirements and
metrics to assess needs across all hours
LOAD-MODIFYING RESOURCES PERFORMANCE REQUIREMENTS
In each of the past three Planning Reserve Auction
years, LMRs comprise a higher percentage of MISO
resources.
The region is increasingly experiencing tight operating
conditions that MISO must address by deploying all
types of resources — including LMRs that currently can
only be called into service during emergencies. This
increasing reliance on and use of LMRs, now and in the
future, begs the question as to whether LMRs should
continue to be treated differently from traditional
generation.
11
In terms of managing the system in real time, the
increasing penetration of LMRs limits MISO's ability
to effectively and efficiently use all the resources that
are committed under the region's capacity construct.
This is partly due to a lack of sufficient locational
information. Further, LMR access comes via Emergency
Operating Procedure (EOP) activation at Step 2a, when
conditions are volatile due to stakeholder responses
to earlier emergency declarations, both within MISO
and other Balancing Authorities. Additionally, MISO is
limited to five LMR deployments per planning year, so
use must be judicious. Lastly, LMRs are only obligated
to be available during the summer season.
LMR deployment is not a simple calculation. A single
CPNode may cover a vast area of the reliability
footprint thereby limiting system operation’s ability
to know exactly how and to what extent LMR
deployment will help mitigate an emergency. More
precise locational information will improve MISO’s
ability to mitigate system emergencies. In addition,
there is a disparate and different set of tools used to
manage LMRs versus traditional generation. Traditional
generation is dispatched via the Day-Ahead Real-Time
(DART) Energy Markets Operating System versus
LMRs, which are committed through a component
of the MISO Communication System (MCS). Better
locational information and a single platform for
commitment/dispatch of traditional generation and
LMRs would allow LMRs to be used for congestion
management and to relieve constraints.
From a market perspective, LMRs are also treated
differently. Traditional generation uses a different
testing and performance penalty structure for non-
performance compared to LMRs. Also, while there
have been recent tariff changes on rules for utilizing
LMRs more effectively, they are still only obligated to
be called upon five times per Planning Year.
These issues are complex as MISO markets,
operations and the broader Bulk Electric System
(BES) have evolved and changed significantly since
the introduction of LMRs to the MISO Tariff. As
LMRs continue to displace traditional generation
as a percentage of total resources and are utilized
more frequently, there is a need to evaluate if it is
appropriate to continue to treat them differently, while
also understanding the limitations in doing so.
Next Steps
MISO will engage with stakeholders to:
• Explore LMRs performance and impacts during
MaxGen emergencies
• Generate options for process improvements to
provide better visibility into LMR availability
• Engage stakeholders to evaluate options for
operational and planning enhancements
Emergency Demand Response (EDR) is a
service that refers to the use of a demand resource
under a specific Tariff schedule.
Demand Response Resource (DRR) refers to a resource type; one that provides service to the
energy and ancillary services market.
Load Modifying Resource (LMR) is a category that refers to the
use of a demand resource toward meeting Planning
Resource Margin Requirement (PRMR)
Load Curtailment
12
FUEL ASSURANCE
Fuel-related issues with gas-fired generators impacted
reliability and pricing outcomes during MaxGen
Capacity Emergencies in January 2014, 2018 and 2019.
During these events, MISO deployed every emergency
and non-emergency resource available.
While fuel issues were not the only driver of these
MaxGen events, they were another risk factor
associated with the extreme winter weather that led
to capacity scarcity. MISO can be capacity sufficient
one day and insufficient the next, should a number of
often-correlated risks align. The table below shows
the number of MWs of gas-forced outages during past
winter MaxGens, and the number of MWs attributed
to fuel issues based on Generating Availability Data
System (GADS) cause codes.
MISO has undertaken a number of initiatives to
enhance fuel security in the region, including
administering an annual, voluntary survey that provides
insights into the methods that gas-fired generators
use to ensure that their facilities can operate when
needed. The survey was first published in 2015 and
has response rates of 70-90 percent of the fuel-based
generation in MISO. The survey and various internal
studies indicate some redundancies for gas-fired
generation in MISO (such as back-up fuel capabilities
or connections to multiple gas systems). Also evaluated
is the growing availability of fuel across the entire
region due to the growth of shale gas supply and
related improvements in gas pipeline deliverability.
MISO has also completed assessments of vulnerability
to disruptions of gas supply and pipeline infrastructure
and found MISO much less vulnerable compared to
some other regions. That said, fuel-related outages are
material during extreme winter weather and contribute
to reduced operating margins.
However, past winter MaxGen emergencies
have illustrated the difficulty and expense of gas
procurement during extreme cold. As a result, MISO
has been exploring how to provide gas generators with
the certainty and flexibility they need to firm up their
fuel supply when MISO expects tight operating margin
conditions. This includes the recent implementation of
MOM Forecasts.
Next Steps
• Evaluate how enhancements to MISO's resource
accreditation process and markets could mitigate
multiple risks that the region faces, including risks
related to fuel assurance.
• Work with stakeholders and the gas industry to
explore firm/flex natural gas pipeline pre-positioning
and offerings in a multi-day context
Winter MaxGen
Day
Gas forced outages in GADS
Coded as fuel-related
in GADS
% Fuel Related
1/6/2014 8.2 GW 4.5 GW 56%
1/7/2014 12.0 GW 5.4 GW 45%
1/17/2018 7.3 GW 3.6 GW 49%
1/18/2018 7.8 GW 3.7 GW 47%
1/30/2019 5.8 GW 2.7 GW 47%
1/31/2019 6.4 GW 3.0 GW 46%
Fuel-Related Outage Share During Winer MaxGen Emergencies
13
FORWARD MARKET MECHANISM
Since its founding, MISO has worked with stakeholders
to set up rules, processes and markets that ensure
applicable reliability standards are met in ways that
create value for MISO members. MISO’s Day-Ahead
(DA) and Real Time (RT) energy markets utilize
security-constrained unit commitment and security-
constrained economic dispatch while using industry
best practices and industry-leading price formulation
methods, including MISO enhancements such as
enhanced LMP (ELMP) and emergency pricing. While
market-based unit commitment is an important
efficiency enhancing component of the energy market,
given the uncertainties and incentives faced by
resource owners, most commitment of capacity has
occurred prior to the Day-Ahead market due to owner
operational, financial, and contractual considerations.
For example, given practical operational considerations,
nuclear units remain running while not on outage
rather than wait for a Day-Ahead market-based unit
commitment.
Low wholesale energy prices and the increasing
volatility and uncertainty of system needs and
resources has led a number of stakeholders to request
that MISO provide better information in advance of
the Day-Ahead market to inform unit commitment
decisions. In addition to implementation of the MOM
volumetric forecast, MISO is responding to this request
by exploring a Forward Market Mechanism. The goal
of a such a mechanism is to better inform and incent
member decisions about resource availability in
advance of the Day-Ahead market – ultimately with
a goal of mitigating the risks of insufficient energy in
real-time and preventing inefficient production cost.
Decisions that could be informed by a FMM in advance
of the DA include:
•Outage timing & prevention
•Commitment of long-lead resources
•Fuel procurement decisions
•Availability of flexible resources
•Import and export scheduling
•Flexible load scheduling and LMR use
<1d 1-7d 7-90d >90d
60,000 -
40,000 -
20,000 -
0 -
MW
JAN
17 -
FEB
17 -
MA
R 17
-A
PR 17
-M
AY 17
-JU
N 17
-JU
L 17
-AU
G 17
-SE
P 17
-O
CT 17
-N
OV
17 -
DEC
17 -
JAN
18 -
FEB
18 -
MA
R 18
-A
PR 18
-M
AY 18
-JU
N 18
-JU
L 18
-AU
G 18
-SE
P 18
-O
CT 18
-N
OV
18 -
DEC
18 -
JAN
19 -
FEB
19 -
MA
R 19
-A
PR 19
-M
AY 19
-JU
N 19
-JU
L 19
-AU
G 19
-SE
P 19
-
Generation Outages by Lead Time
14
Next Steps
• Discuss problem definition and evaluation criteria at
the Market Subcommittee
• Identify and assess potential alternative approaches
• Develop, test and discuss a Forward Market
Mechanism proof-of-concept results with
stakeholders
RESOURCE ADEQUACY CONSTRUCT (8760)
MISO is evaluating whether the current resource
adequacy construct is sufficient to address reliability
risks throughout the year now and in the years to
come. Several factors contribute to this exploration,
including planned and forced outages; the changing
resource mix due to retirements and addition of more
variable energy resources; net scheduled interchange
volatility; and extreme weather events.
Historically, MISO's approach to resource adequacy has
focused on ensuring that sufficient resources would
be available when demand peaks in the summer--with
the expectation that serving load the rest of the year
would be comparatively easier. But given the increase
in MaxGen emergencies in the last three years in non-
summer seasons, MISO is now evaluating whether a
summer focus continues to make sense. As part of that
evaluation, MISO is looking into several traits of the
current construct such as the granularity, risk metrics,
PRA auction design, reliability requirement, and market
signals.
There has been growing concern that the current
construct is missing risks outside the summer
timeframe. During the last three years, only one of
the 10 total MaxGen emergencies has occurred in the
summer. Because of this, MISO is evaluating whether
a more granular construct could help provide visibility
into risks throughout the year to ensure reliability
during all time periods. One option would be a
seasonal construct, which has the potential to match
reliability requirements to specific seasons and provide
the flexibility for resources to participate in the PRA in
times best suited for each resource.
In addition to the granularity of the resource adequacy
construct, MISO is looking at the risk metrics
used in establishing the PRM and Local Reliability
Requirements. The industry standard used by MISO
has been a loss of load expectation(LOLE) of one day in
10 years (0.1 days/year). However, given the changing
resource mix and increase in variable energy resources,
MISO will evaluate if the LOLE metric sufficiently
reflects risk, especially across all hours of the year.
There may be a need to augment the LOLE metric or
consider alternatives. Expected Unserved Energy (EUE)
is one alternative metric for assessing reliability risk,
which has some support from others in the industry
and from several stakeholders. EUE is expressed as the
expected number of megawatt-hours of load that will
not be served in a given time period. One reason it may
be useful compared to LOLE is as storage and other
variable energy resources become more prominent
in the MISO portfolio, EUE has the ability to measure
those attributes. There are additional alternatives
worthy of consideration and MISO is evaluating those
as well As MISO moves into the future, it will be
essential to utilize the proper risk metric to determine
reliability criteria and requirements. The reliability risk
metric is not the only crucial component to accurately
capture risks. Improved modeling is something MISO
continuously strives to achieve and is directly linked to
accreditation as shown in the feedback loop graphic.
15
Lastly, MISO members will need to continue to take
responsibility for meeting reliability criteria with
resources that will be accredited based upon the
resource's ability to deliver specific capabilities. This
contribution to reliability can be met through self-supply
or market purchases. A seasonal construct is a serious
consideration for MISO because of the granularity and
flexibility it provides in reliability planning and aiding in
meeting the system’s future needs.
Next Step
• MISO will continue discussions related to the resource
adequacy construct with stakeholders at the Resource
Adequacy Subcommittee (RASC)
Real World
Identify Risks
PRM ModelingAccreditation
Linkage Between Accreditation and Actual Operations
16
TRANSMISSION SERVICE DELIVERABILITY
Potomac Economics, a Washington, DC-area company
that servers as MISO's Independent Market Monitor
(IMM), recommended in 2017 that all resources in the
MISO region should be able to deliver 100 percent
of their accredited Installed Capacity (ICAP) levels
to load when needed. MISO agreed to evaluate this
recommendation as part of the MISO Integrated
Roadmap #65 and the 2019 RASC workplan. In 2019,
the FERC encouraged MISO to continue working
through the stakeholder process for implementation.
The tariff requires that all types of resources be
deliverable to load in order for eligibility as capacity
resources. Deliverability is determined by, among
other things, demonstrating the resource has Network
Resource Interconnection Service (NRIS) or Energy
Resource Interconnection Service (ERIS) coupled with
firm transmission service reservations.
MISO is working towards a solution for determining
deliverability for all resources based on the entire
ICAP of applicable planning resources. This will ensure
consistency with MISO’s transmission planning studies,
which assume that resources will perform up to their
ICAP level when available. By making this change,
resources would be required to demonstrate firm
transmission service in the amount of their full ICAP
level either by having NRIS up to their ICAP level or
ERIS along with firm transmission service up to their
ICAP level.
However, this may not be appropriate for intermittent
resources because these resources cannot consistently
provide capacity at the level of their full ICAP value.
Therefore, MISO is exploring options, in conjunction
with stakeholders and the IMM, through the RASC
on potential solutions for the intermittent resources
deliverability requirement. The requirement to
demonstrate deliverability for intermittent resources
will be calculated and set at a more appropriate,
expected output rather than their full ICAP levels.
Next Step
• MISO will continue the discussion with stakeholders
and the IMM at the RASC in 2020
ENHANCEMENTS TO EMERGENCY PRICING
MISO administers competitive electricity markets to
deliver reliable and efficient outcomes at the lowest
cost. Since the inception of the energy markets,
MISO and the Independent Market Monitor (IMM)
have analyzed the markets to identify and implement
various types of enhancements. For example, pricing
should be consistent with the marginal system cost
and degree of reserve shortage during emergency
events, considering the marginal cost of out-of-
market reliability actions, costly demand response
deployments, the Value of Lost Load (VOLL) and Loss
of Load Probabilities (LOLP) during reserve shortages.
Said more simply, prices should be high enough to
reflect that MISO is running out of resources when
it makes emergency declarations. Scarcity pricing
should also reflect regional reliability risks and reserve
17
needs. MISO’s IMM and stakeholders have questioned
whether prices during MaxGen emergencies reflect
the scarce conditions declared by MISO so as to
properly incentivize needed resource availability, avoid
uplift from reliability commitments, and incent market
participants to take other actions that would improve
the supply-demand balance.
MISO continues to look for ways to inform and
enhance markets to align with desired operational
outcomes. MISO pioneered the ramp product, ELMP
pricing, and emergency pricing which aims to avoid
price suppression by using the highest available offer
when pricing emergency resources. Going forward,
MISO will continue to pair solid theoretical market
pricing approaches with enhancements that are
expected to incent needed Market Participant behavior
during times of scarcity.
MISO’s pricing design must provide efficient incentives
for adjustments to interchange with its market and
non-market neighbors. In recent years, MISO has
become a significant net importer but most of the
interchange is submitted as fixed schedules and is
not explicitly committed through economic market
mechanisms in either the DA or RT markets. Changes
in net schedule interchange (NSI) during emergencies
can supply needed megawatts to meet MISO load and
maintain reserves, but reductions in NSI can also lead
to reserve shortages and reliability challenges if the
MISO market design does not send an efficient price
signal for import supply. In addition, the Net Scheduled
Interchange scheduling process can create uncertainty
about capacity sufficiency when making reliability
and market commitments. This impact of uncertainty
regarding future levels of NSI on commitment
decisions has contributed to low prices during MaxGen
emergencies and significant amounts of uplift.
Next Steps
• Enhance emergency pricing outcomes
• Assess the shape and ceiling of the Operating
Reserve Demand Curve including estimates of the
Value of Lost Load
• Decide whether/how to better optimize interchange
between RTO and non-RTO regions
Misalignment Between NSI and Regional Price Differences
1/30/2019
1
1/31/2019
3 5 7 9 11 13 15 17 19 21 231 3 5 7 9 11 13 15 17 19 21 23
700
600
500
400
300
200
100
0
-100
RT L
MP
Diff
eren
ce $
/MW
h
* PJM & MISO Price Vs NSI
Real-Time LMP Difference
Real-Time NSI with PJM
18
RESOURCE ACCREDITATION IMPROVEMENTS
The goal of resource accreditation is to incentivize
improved availability throughout the year, especially in
periods where margins are tight.
MISO’s current Resource Adequacy Construct allows
many exceptions to real time availability. The PRA
allows resources to offer and clear the auction without
a reduction in their capacity credit, even in light of
these exceptions. Because resources can use these
exceptions without a reduction in their capacity credit,
there is little incentive to be available in times of need.
Additionally, MISO has many different resource
types, each with different capabilities. MISO’s current
accreditation methodologies do not accurately reflect
these capabilities. For instance, some resources have
use limitations that are not efficiently accounted for
in accreditation. One example is the lead-times of
resources to respond which are not factored into the
credit they receive.
Ideally, MISO would have a capacity accreditation
methodology that accounts for actual resource
availability, specific resource capabilities as well as the
deliverability of resources. Also, LMR accreditation will
be critical as those resources become more prevalent
within the MISO footprint and continue to make up a
significant portion of the PRM as shown below in the
Day-Ahead Must Offer chart. MISO developed several
guiding principles related to accreditation that include:
1) incentivized availability for periods of tight margins;
2) removal of exceptions currently in place that limit
availability; 3) providing visibility into actual availability
of all resource types throughout the year to better
manage reliability risks; and 4) the establishment of a
more universal methodology for all resource types that
accounts for a resource’s specific capabilities.
Planning Resource Auction MWs Cleared
Planning Resource Auction Year 2017-18 2018-19 2019-20
Total Cleared 134,753 135,179 134,743
Demand Resources (DR) 6,014 6,964 7,372
DR as % of Total Cleared 4.5% 5.2% 5.5%
Behind-the-Meter Generation (BTMG) 3,456 4,098 4,097
BTMG as % of Total Cleared 2.6% 3.0% 3.0%
DR + BTMG as % of Total Cleared 7.0% 8.2% 8.5%
Load-Modifying Resources are an Increasing Share of Cleared Capacity Resources
6/2014 12/2014 6/2015 12/2015 6/2016 12/2016 6/2017 12/2017 6/2018 12/2018
160
150
140
130
120
110
100
90
80
70
Thou
sand
s
DA Offer Available PRMR PRA Gen. PRA Cleared
Historical Hourly Day-Ahead Offer (MISO System, MW)
19
Next Steps
• MISO is exploring several options for accreditation with stakeholders at the Resource Adequacy Subcommittee (RASC).
- Effective Outage Rates (EOR), which include planned, maintenance and forced outages and derates
- A real-time availability option that would look at Day Ahead and Real Time offer data during hours of tight margins to accredit resources
- LMR accreditation that reflects actual availability, which could include past performance or utilization of MCS
• MISO is targeting the first half of 2020 to file a new accreditation methodology with FERC for most resource types.
MULTI-DAY OPERATING MARGIN (MOM) ENHANCEMENTS
MISO stakeholders want better information to help
them identify potential operating day issues several
days in advance. Until October 2019 stakeholders,
generation and transmission owners/operators
generally became aware of operating day issues
only when MISO declared various advisories, alerts,
emergencies and events via Emergency Operating
Procedures (EOPs). Since these procedures focus on
real-time operations, notice is generally provided just
hours in advance of a potential issue.
A multi-day operating margin and associated inputs
provides better transparency to various stakeholders.
Generation and transmission owners/operators are
better able to assess their risk to adjust planned
operations and outages on their own and better align
20
their plans without having to wait for a request from
MISO. This also provides generators better information in
order to procure natural gas and make associated pipeline
reservations multiple days in advance rather than the day
prior to operations. MISO began posting multi-day peak
hour operating margin in October 2019. This information,
which is updated daily, is based on the information used
by MISO Operations. MISO intends to solicit stakeholder
feedback to guide work efforts on subsequent iterations,
adjustments and improvements.
Next Steps
While specific details will be vetted with stakeholders,
future enhancements could include uncertainty in load
and renewable forecasts and hourly disaggregation of
data. Other improvements to reduce uncertainties could
include, but are not limited to:
• Estimates of forced outages/capacity returning from
outage
• Regional Directional Transfer (RDT) flow
• Interchange forecasting, stranded capacity
• Behind-the-meter generation and emergency resource
information
Future enhancements will have to consider availability of
data, effort to generate new data and data confidentiality.
View our Multi-day Operating Margin (MOM) Forecast Reports here
21
MULTI-DAY OPERATING MARGIN (MOM) FORECAST INITIAL REPORT
Stakeholders have expressed interest in understanding
near-term system needs, especially in areas such as
whether the system is expected to experience tight
operating conditions on a forward-looking basis. To
that end, MISO has created the created the MOM
Forecast. The table below illustrates committed and
uncommitted resources (broken down by lead time),
along with a renewable forecast and NSI. These
variables equal the total resources available. The
report also provides the projected load and operating
reserve margin. The total resources available minus the
obligation provide the resource operating margin. The
lower the number, the tighter the forecasted operating
margin is expected to be.
ACCREDITATION OF RESOURCES ON LONG-TERM OUTAGE
The MISO Tariff does not specify adverse
consequences for resources that clear in a given
PRA and are either on long-term outage or have one
scheduled after the beginning of the Planning Year
(PY). In such a scenario, a resource would receive
capacity credit during an extended time of planned
unavailability.
In October 2019, MISO formally presented the
Resource Adequacy Subcommittee with a structure
to address these situations. The framework stipulates
that resources expected to be unavailable for at least
90 of the first 120 days of the Planning Year do not
qualify for PRA participation. Pending FERC approval
this would be effective beginning with the 2020-2021
Planning Year PRA.
This filing is not necessarily intended to be a long-
term solution, but rather a pathway to a more
comprehensive accounting. Factors to consider during
this extended review period are resource accreditation
and other qualification elements, examination of
further statistical analysis and potential seasonal
considerations that include a more granular focus
and/or increased flexibility. The target PRA for these
additional elements is the 2021-2022 PRA.
Done
22
LOAD-MODIFYING RESOURCES AVAILABILITY AND VISIBILITY
The intent of Phase 1 for LMRs was to improve visibility
and availability throughout the year. Through the
enhancements to the LMR registration process, 9.5 GW
of the 11.4 GW of LMR capacity indicated they would
be available to be called on year round. Along with
indicating more availability, the amount of LMRs with
less than two hour notification time increased from 2.2
GW to 4.1 GW.
Another enhancement to the availability and visibility
of LMRs was modifications to testing requirements.
To help facilitate the testing requirements during
the accreditation process, MISO accounts for LMR
performance during events in which they were
called upon. If LMRs wish to opt-out of the testing
requirements, they could do so, but with significant
penalties associated with non-performance. These
changes were instituted with the goal of increasing
MISO’s visibility into the availability of LMRs during
emergency events which can be called upon during
emergency events.
OUTAGE COORDINATION ENHANCEMENTS
In order to increase availability, flexibility and visibility,
MISO provided accreditation-related incentives to
generators to notify MISO of their outage scheduling
as early as possible. If circumstances required an
outage to be scheduled closer to the operating day, the
resource requesting the outage would have increased
transparency of other planned outages and potential
impacts. The Outages by Lead Time table shows the
total outages by lead time throughout the year. When
comparing outages across 2017, 2018 and 2019,
outages scheduled in 2019 following FERC approval of
MISO's RAN Phase 1 tariff changes show fewer overall
outages. Phase 1's full impact on outage coordination
will be the subject of further analysis.
LMR Outage by Notification Time
12,000
10,000
8,000
6,000
4,000
2,000
MW
18-19 PY 19-20 PY
≥6 Hours >2 Hours and < 6 Hours ≤2 Hours
4,473
1,970
4,127
6,150
2,523
2,192
LMR MWs by Notification Time
23
60,000 -
40,000 -
20,000 -
0 -
JAN 17 FEB 17
2017
MAR 17 APR 17 MAY 17 JUN 17 JUL 17 AUG 17 SEP 17 OCT 17 NOV 17 DEC 17
MW
60,000 -
40,000 -
20,000 -
0 -
JAN 18 FEB 18
2018
MAR 18 APR 18 MAY 18 JUN 18 JUL 18 AUG 18 SEP 18 OCT 18 NOV 18 DEC 18
MW
60,000 -
40,000 -
20,000 -
0 -
JAN 19 FEB 19
2019
MAR 19 APR 19 MAY 19 JUN 19 JUL 19 AUG 19 SEP 19 OCT 19 NOV 19 DEC 19
MW
1d 1-7d 7-90d >90d
MISO System Resource Outage–OOS 2017-2019 by Outage Lead Time
24
MISO's Stance on RAN
At the Board of Directors meeting in September of 2019, it was stated that “RAN is the most timely and significant
near-term strategic initiative.” While this statement is true and the focus of RAN has been near-term strategic
initiatives, longer term issues must also be considered and addressed. MISO is also elevating and extending its
focus to address these longer-term needs. Current drivers of change are impacting today’s planning, markets
and operations in a manner which the industry has not seen before. Actions are needed now. At the same time,
MISO cannot afford to focus on solutions which only resolve today’s issues without taking into account the
future. To help strike the right balance, MISO will continue to proactively evaluate solutions with stakeholders in
a collaborative manner. Working together will ensure that we accomplish our vision of being the most reliable and
value-creating RTO.
misoenergy.org
Recommended