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The key takeaways from our PJM, MISO and ERCOT seasonal outlook webinars [1]

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Date: 2023-09-27 08:42:20

MISO

Midwest Independent System Operator (MISO) manages the flow of electricity across 15 states in the US Midwest and South, as well as in the Canadian province of Manitoba. For MISO, an important focus is the reduction of emissions.

EPA Good Neighbor Plan

The US Environmental Protection Agency (EPA) is mandated to address pollution by federal law in the form of the Clean Air Act. Its Good Neighbor Plan (GNP) aims to significantly reduce nitrogen oxide (NOx) emissions from power plants and other industrial facilities, which are a major cause of ground-level ozone, or smog. The GNP sets an annual ozone ‘budget’, as well as a daily emission limit to ensure electricity generating units (EGUs) full operate controls.

Greenhouse Gas Standards

In May 2023 the EPA announced proposed new greenhouse gas emission standards designed to limit CO2 emissions from fossil fuel-fired powerplants. These rules would require nearly all existing fossil-fuel EGUs to either implement carbon capture and storage (CCS), substantially replace fossil fuel with hydrogen, or shut down altogether.

For MISO, the new rules would mean that 9 GW of existing generation would be forced to retire early by 2032 (of these, Germantown is the only non-coal-fired plant). Overall, 38.2 GW of natural-gas-fired combustion turbine and coal-fired generation capacity will be retired between 2024 and 2035. The MISO slide deck includes a full state-by-state breakdown of projected retirements and the resulting impacts on market dynamics.

ERCOT

For the Electric Reliability Council of Texas, the key questions revolve around whether renewables and new ancillary services can help avoid future disaster, as demand continues to surpass all-time records.

ERCOT Contingency Reserve Service

The organisation’s newest ancillary service product in over a decade, the ERCOT Contingency Reserve Service (ECRS) was implemented at the start of the summer. With solar and wind generation providing more and more of the state’s electricity, ECRS is a much-needed tool aimed at improving grid flexibility and reliability.

The service will be deployed in situations where there is between 1,098 and 3,038 MW of available electricity reserves. Any generation resource with online or offline capacity that can be converted to energy within 10 minutes of receiving the signal can participate in the scheme. As well as providing capacity during net load ramping hours, it will help to recover frequency following a unit trip.

Model Unit Output

Modelled Unit Output (MUO) is a set of predictive models that are constantly retrained using both public and proprietary Wood Mackenzie data. These models make it possible for us to estimate real-time plant generation in situations where output cannot be monitored using EMF sensors or infrared cameras. As a result, we can provide close to 100% coverage of ERCOT generation to subscribers. By allowing you to monitor activity from ‘peaker’ EGUs that kick in when demand is high, MUO allows you to better assess the possibility of price spikes driven by supply-demand imbalances.

Bitcoin mining impact

We recently conducted research in conjunction with our Grid Edge team into the impact of electricity use for Bitcoin mining on non-mining ratepayers. Creating new Bitcoin mining load requires ever larger amounts of computing power and is increasingly conducted in huge, purpose-built data centres (essentially, warehouses containing banks of high-powered computers and cooling equipment).

Bitcoin mining is booming in Texas. Based on operational capacity confirmed by a New York Times investigation, the activity uses at least 1,787 MW of electricity, or 2.2% of baseload, in ERCOT. Our study found that during typical autumn conditions, subtracting the load due to mining reduces locational marginal pricing (LMP) by US$5 per megawatt hour (MWh), on average. This means that mining effectively raises prices by US$5/MWh, due to the need for more and more expensive generators to be dispatched.

Overall, by our calculations Bitcoin mining already raises electricity costs for non-mining Texans by US$1.8 billion per year, or 4.7%. These figures are conservative, accounting only for mining during ‘blue sky’ hours when prices are under US$150/MWh. Bitcoin mining is likely to have stronger impacts on the grid over time as the number of larger and more power-hungry mining facilities is likely to grow.

Find out more

Don’t forget to fill in the form at the top of the page to get complimentary access to the slide decks and webinar recordings, which explore the above topics in more detail. They also include reviews of the summer period and outlooks for fall weather, demand and generation.

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[1] Url: https://www.woodmac.com/news/opinion/the-key-takeaways-from-our-pjm-miso-and-ercot-seasonal-outlook-webinars/

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