Over the last year, GPI has convened an informal group of Midcontinent Independent System Operator (MISO) stakeholders to discuss market rule needs for hybrid resources. Through this work we’ve been able to develop and present a set of specific recommendations to MISO to define how hybrid resources will participate in its energy and capacity markets.
To support this work, we partnered with the Clean Grid Alliance (CGA) to conduct a survey of CGA member developers and utilities that have been participating in our hybrid stakeholder discussions. This survey, to which 21 entities responded, explored trends in hybrid design, hybrid technologies, and hybrid needs for MISO market participation. Full survey results are below at the end of this blog post.
In this post, we share our survey results and discuss the following key takeaways:
- Hybrid resources will be online in MISO within the next three years.
- Energy storage is a key component of most hybrids, but how much and what type of storage varies.
- Market rule changes are needed for hybrid resources to operate efficiently in MISO.
You can learn about hybrid resources in the MISO market—what they are, why MISO’s market rules are important, and how they deliver value to the grid in our previous post. We also previously wrote about the transmission interconnection process for hybrid resources.
But first, a quick note on the survey structure. Our survey consisted of two sections. The first section was given to all respondents and asked if they were actively developing hybrid resources in the MISO region, along with other general questions on the timing and scale of expected hybrid deployment. If the respondent indicated that they were indeed actively developing or planning a hybrid project, the respondent was also given second set of more detailed questions on hybrid design and market rules.
Much of the insight generated from this survey reflects the opinions of the companies with intimate knowledge of how hybrid resources will fit into the MISO markets and thus how the market rules may need to change to accommodate them.
Key takeaway #1: Hybrid resources will be online in MISO within the next three years.
Of our respondents, 90 percent said that they were actively pursuing a hybrid project of some kind, and 75 percent of respondents expect to bring these resources online within the next three years (see figure 1).
Figure 1. Expected Timing of Hybrid Resource Commercial Operation in MISO
There are currently 4,901 megawatts (MWs) of hybrid resources in MISO’s interconnection queue, as well as our estimation of 5,062 MWs of co-located resources. Furthermore, figure 2 shows that there are more hybrids in the pre-queue stages of development in addition to the projects already in the queue.
As market rules are developed for hybrid and co-located resources in MISO, this growing interest indicates that we are likely entering a phase of accelerated deployment.
Figure 2. Current Status of Hybrid Resource Development in MISO
Survey question: Within MISO, what stage(s) of development best describe the hybrid projects your company is currently working on?
Key Takeaway #2: Energy storage is a key component of most hybrids, but how much and what type of storage varies.
We asked survey respondents to identify the technology pairings, or use cases, they are pursuing. The results show a clear expectation that near-term hybrid resources will be predominantly renewable resources paired with storage. This observation aligns with current trend in the MISO interconnection queue. However, there is some divergence into the attributes of the energy storage components of expected hybrid resources.
As we can see from figure 3, nearly all hybrids will have a 2–4 hour storage asset (which is the typical duration for lithium-ion batteries that currently dominate the battery storage market). This likely reflects the current capacity construct in MISO which requires batteries to have a 4-hour duration at rated discharge to qualify as a capacity resource. However, some respondents are also considering longer-duration storage in hybrid resources.
Figure 3. Duration of Planned Hybrid Resource Storage Component in MISO
Survey question: If your planned hybrid resource includes a storage component, what is the expected duration of that storage component? (Mark all that apply)
There is more diversity in the expected relative sizing of storage to generation. As figure 4 below shows, respondents showed interest in a wide range of storage size (MW) compared to the paired generation resource’s nameplate capacity. Such variability demonstrates the diversity of market strategies and system needs across developers and utilities.
This is an exciting time to see how these design considerations will evolve and if a more “typical” hybrid design will emerge as hybrid market rules and value propositions are refined.
Figure 4. Relative Size of Planned Hybrid Resource Storage Components in MISO
Survey question: If your planned hybrid resource includes a storage component, what is the expected size of that storage component (MW) compared to the generation component (MW)? (Mark all that apply)
Key Takeaway #3: Market rule changes are needed for hybrid resources to operate efficiently in MISO
Simply put, the current market rules will not enable hybrid resources to provide their full value to the market. All survey respondents indicated a need for new market rules and hybrid-specific processes to bring hybrid resources to market.
Figure 5. Stakeholders See Need for New Market Rules for Hybrid Resources in MISO
Survey question: What information on MISO rules and processes does your company require to enable further progress on its hybrid resource development?
Hybrid resources need several codified market rules and market software to realize their value in MISO markets, including the ability to do the following:
- Manage the state of charge in the battery component.
- Charge from the grid and from the paired resource.
- Update their market offers within a given market hour to offer the market their full capabilities at any given time.
While some of these changes may be feasible using the existing market software, and others will become available when MISO implements its Electric Storage Resource participation model in 2022 to comply with Federal Energy Regulatory Commission Order 841, MISO has expressed that many capabilities will not be possible until the completion of the Market System Enhancement, a comprehensive overhaul of MISO’s market software, expected to be completed in 2025.
Our next blog in this series will dive into the details of needed market reforms to enable hybrid resources and what near-term hybrid participation may look like given the current MISO market software constraints.
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