US Midcontinent ISO study says 200 GW new capacity needed by 2041 to meet utility climate goals

A new study by Midcontinent Independent System Operator says that utility decarbonization goals could require 200 GW of new capacity by 2041, while also highlighting the ongoing risk of a capacity shortfall in the region, MISO staff said Aug. 24.

MISO North and Central had a 1.2-GW capacity shortage in the planning resource auction for the planning year that started June 1, and MISO's draft 2022 Regional Resource Assessment is the latest data point to indicate that trend could continue.

"Right now, we see ongoing risk over the next several years," Hilary Brown, an engineer in the policy studies group at MISO, said at a meeting of MISO's Resource Adequacy Subcommittee. The timing for capacity risk depends on the zone and some zones show an immediate capacity risk, which reflects the shortage in the most recent capacity auction, she said.

For instance, the draft RRA shows that the estimated accredited capacity of existing and planned resources in local resource zone 5 in Missouri falls well short of the estimated reserve requirement in 2023 and beyond, according to a document detailing zonal level results posted on MISO's website.

Evolving resource mix

The RRA is an annual study in which MISO aggregates utilities' publicly announced plans and goals and uses them to develop a view of how the resource mix will evolve.

The 2022 RRA found that significant acceleration of resource expansion will be needed to meet utilities' combined carbon reduction plans. More than 100 GW of new capacity will likely be needed by 2030, and 200 GW may be needed by 2041, according to a presentation discussed at the RASC meeting.

When resource plans are not available, or the plans do not provide information for the full 20 years considered in the study, MISO modeled the capacity additions that will be needed to meet renewable and decarbonization goals while still meeting the planning reserve margin, according to the presentation.

Compared to a 2005 baseline, the MISO region is projected to reduce carbon dioxide emissions by 65% by 2030 and by nearly 80% in 2041, the RRA said.

Renewable penetration

MISO's renewable penetration could hit 30% sometime between 2027 and 2028, and 40% in 2030, the presentation said. Penetration will hit 50% in 2036 and exceed 60% in 2041, according to the RRA.

The pace of penetration growth is significant because MISO has warned that renewable integration will get significantly more complicated when renewable penetration reaches 30%-40%.

That penetration reflects inflection point, at which existing infrastructure may be inadequate to access diverse resources, regional energy transfers will increase in magnitude and variability, and power delivery may need new transmission technologies with dynamic support capabilities, according to MISO's 2021 Renewable Integration Impact Assessment.

This year's RRA findings also represent a significant acceleration from the previous study. Last year's RRA found that 140 GW of new capacity would be needed by 2040, and that renewables would hit 40% penetration in 2040.

Given the findings of the new RRA, now is the time to plan for that renewable penetration inflection point, said Tom Butz, a utility planner at Minnesota Power.

"We need to understand how those unanswered questions will be dealt with," he said.

Some stakeholders said the penetration estimates could increase even more rapidly in next year's RRA because the tax credits in the Inflation Reduction Act will encourage even more robust renewables investments.

"With the IRA, I think we are going to see some pretty significant changes in how utilities are behaving in the system in the next iteration," said Simon Mahan, the executive director of the Southern Renewable Energy Association.