Robust Not Optimum Transmission System Design

Modernizing the Grid Midwest Regional Summit Robust, Not Optimum, Transmission System Design Dale Osborn Transmission Technical Manager Midwest ISO Nov 17,2006 Columbus, Ohio 1 1 Presentation Overview Why a Robust transmission design is needed- large uncertainties Example-Vision- for information only • 16,000 Mw of wind • 765 kV HSIL Transmission overlay from SD to NJ • Some preliminary economic indications 2 2 Robust Transmission Design Process Future 1 Future 2 Future 3 Future 4 Ranking System used to determine Robust Core Transmission Transmission Option 1 Transmission Option 2 Transmission Option 3 Transmission Option 4 Robust Plan 3 3 Exploratory Studies For information only, not binding or to be constructed Address “ what if, then what” questions Used for guidance for policy, regulatory, legislative and conceptual generation and transmission investigation. Usually cover a future year and are usually focused on economics rather than reliability • Capacity-reliability • Energy-economics 4 4 Drivers MISO has five times as much potential wind generation as present load Influence from government, wind advocacy, energy market • Market • Constraints to the east of MISO limit economical generation patterns in MISOoverlay mitigates most of these constraints • Power displaces from west to east 765 kV HSIL is lowest price per Mwh-mileneeded for an energy market 5 5 Example MISO MTEP Draft Vision Study 16,000 Mw of wind capacity distributed across MISO states was added to a base case with adequate non-renewable generation • 20% Renewable Energy in Minnesota • 10% Renewable Energy in other MISO states A 2016 study year was chosen Generation shortages to meet load in the base case is supplied from generation expansion studies Top down study type 6 6 Gas 89%-18% 7 7 Market flow West to East 8 8 Predominant Flow Direction – 765kV Overlay 9 9 10 $30 $35 $40 $45 $50 $55 Generation Plus Transmission ONHY NYPP SUNC VP PJME VACAR WPSC PJMS MIDW WEPLK PJMW CEC STHRN DETED FE LBWL SOLAE SPPW AEP SOLAW DP&L SASK CGE LG&E EMDE DQE DPC ARLM HEC IP&L PSI TVA SPCIUT WRI NIPS BREC MGE GRE SMMP HUC WPL SIGE WPPI NSP MPC ASEC INDN ALWST COED KCPL MIPU WPS KACY WEP MPW OTP MPL MIDAM CIL EEI NWPS ILPC SIPC MHSP CIPS WABNI SPRIL WABD AUEP MDU NPPD LES OPPD East( NJ) Average LMPs for Base, 765kv Overlay, and WIND Avg LMP - 765kV Overlay Base Case Avg LMP - Base Case Transmission Only Avg LMP - WIND West ( SD) 10 % CHANGE LMP – 765kV OVERLAY CASE vs. Base Effect of Transmission Only MP OTP H-Q UPPC GRE WAPA XEL WPS MGE SMMP A DPC IESO WEC METC ITC PENELEC NYISO ALTW M PW LES OPPD MEC NI CWLP CILC HE IP NIPS DPL FE PL PECO PSEG JCPL AE DLCO AEP AP PJM500 NPPD IPL METED BGE PEPCO KACY INDN MIPU AMRN SIPC SIGE CIN OVEC DP&L VAP LGEE BREC EKPC KACP EMDE ELECTRIC DOE DUK AECI TVA CPLW CPLE 11 11 % CHANGE LMP – WIND CASE + Overlay vs. Base MP OTP H-Q UPPC GRE WAPA XEL WPS MGE SMMP A DPC IESO WEC METC ITC PENELEC NYISO ALTW M PW LES OPPD MEC NIPS NI DPL FE PL PECO PSEG JCPL AE DLCO AEP AP P J M500 CWLP NPPD CILC HE IP IPL METED BGE PEPCO KACY INDN MIPU AMRN SIPC SIGE CIN OVEC DP&L VAP LGEE BREC EKPC KACP EMDE ELECTRIC DOE DUK AECI TVA CPLW CPLE Wind lowers the Load LMP for all areas 12 12 Economic Results $6.9B/yr Net Generator Revenue reduction $4.6B/yr transmission annual carrying charge-cost not recovered in the study 2.2B/yr Wind generation Revenue • 74% of annual carrying costs for a 2006 generator • 54% of annual carrying costs for a 2016 generator Net benefit from generation and transmission $100M/yr. Other benefits may occur from a reduction in the deferment of capital expense due to a reduction in generator reserve margins 13 13 Generation Displaced by WIND - % Total MWhs ST GAS ST OIL 3% 3% CT GAS 17% CT OIL 0% ST COAL 77% CT GAS CT OIL ST COAL ST GAS ST OIL 67 Twh/yr wind generation 43M tons/yr CO2 displaced 171,000 tons/yr Sox displaced 14 14 Initial Observations Need an Renewable Portfolio Standard economically until a market solution is in place-little transmission between states As presently constructed, the Energy Market does not provide revenue sufficiency for renewable energy resources. A method of providing renewable energy resources revenue from generator revenue reductions would need to be provided to make the combination of generation and transmission economically feasible. The transmission may have other value such as generation reserve reductions that may have significant value. Transmission could be recovered by a “user pays” method based on shift factors and recovered by the generator LMP. 15 15 Contact Dale Osborn Transmission Technical Director Transmission Asset Management Midwest ISO Phone 317-249-5857 Cell 317-697-4774 Email: dosborn@midwestiso.org 16 16