How solar PV is taking on wind in the MISO territory

The 6.6MWdc Lemond Solar Center project in Owatonna, Minnesota. The MISO territory is one of the world’s largest energy markets. Image: Adapture Renewables.

Covering 15 states, the MISO area is one of the largest transmission networks in the US, yet solar and storage have had a battle to gain recognition in the territory. Jonathan Touriño Jacobo reports on recent progress as well as the ongoing regulatory obstacles still holding the deployment of the technologies back.

Regular readers of PV Tech might have noticed a recent increase in our coverage of solar projects in the Midcontinent Independent System Operator (MISO) territory in the US.

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Obviously, the fact that it is the largest regional transmission organisation (RTO) in the US by geography and one of the largest independent system operators (ISO), covering 15 states stretching from Louisiana up to Canada, is a helping factor for the increased activity in solar PV.

MISO covers nearly 75,000 miles of high-voltage transmission and has 191GW of installed generation capacity, as of December 2023, according to MISO’s website.

Even if solar PV is not necessarily the dominating renewable energy across the region in terms of current installed capacity, with wind representing a share of 16% of all resources against PV’s 4%, solar is fast expanding. The potential growth of solar PV in the coming years could be easily shown through the backlog of capacity that is waiting at the interconnection queue in MISO.

“MISO has historically had an annual cluster process, where every year there’s a new cluster of projects that are trying to apply to inject power on the grid. In 2021, the cluster was 66GW, which was more than double 2020. And in 2022, the cluster was 170GW. That’s not solar only, but over half of the active queue right now in MISO is solar,” explains Gabriel Klooster, director of development at solar and energy storage developer, Adapture Renewables.

With increased competition looming in the MISO territory and with more and more solar PV capacity waiting for grid connection, Klooster says: “It’s easy to feel we’re late to the game. It’s really difficult to start now with solar development projects and say, they might not come online until 2029-2030, with the MISO delays.”

However, a recent decision from the Federal Energy Regulatory Commission (FERC) rejected MISO’s MW cap requirement to manage the size of the queue in 2023 and needs to open the window again, in a win for renewables.

PV development booming in wind-led states

Solar PV is the clear leader in that field with over 120GW waiting for transmission access as of October 2023, according to data from Sustainable FERC Project. And that’s without adding an extra 40GW of solar-plus-storage capacity in the queue, also as of October 2023.

The problem with that is that it also makes it one of, if not the, biggest challenge to develop a solar project in that territory, says Klooster. “It’s in a very high level of competition.”

Klooster explains how five years ago the picture was very different, giving the example of farmers not considering having solar PV in their fields five years ago, but are being flooded with opportunities from numerous developers. “I recently spoke to a farmer in Illinois, who had received over 30 mailers from different solar companies. The number of solar development companies who are in that space right now is just booming,” says Klooster.

In states such as Iowa, where wind has been the primary driver for renewable energy growth, solar has seen growth too, boosted thanks to utility-scale projects, explains Klooster. Up until 2020, the state added less than 50MW of solar capacity per year, and now has added more than 150MW between 2020 and 2022, according to data from trade association the Solar Energy Industries Association (SEIA), which expects the state to add nearly 2GW of solar PV over the next five years.

Interest in solar from Louisiana to Minnesota

Klooster says that he expects solar to boom in all the states covered by MISO. “Arkansas is one in particular that didn’t have a ton of solar investment a few years ago. If you look at the MISO queue data, it has just exploded in terms of the number of solar projects that are at least applying to be put on that grid,” explains Klooster, adding that Adapture Renewables has faced competition from Mississippi to Minnesota.

“It’s really important to say, though, that five years ago, solar in MISO was a risky bet. Only some of the smaller, less risk-averse developers or even bigger ones that focus on kind of the bleeding edge, were starting to develop solar there five years ago,” says Jesse Tippett, VP of power marketing origination at Adapture Renewables.

As markets such as PJM (Pennsylvania, New Jersey and Maryland) or California ISO (CAISO) started to get saturated in solar projects, developers looked at other regions to build solar capacity, adds Tippett, with MISO among the more interesting ones due to its size. The same goes for off-takers looking at new regions to do solar transactions.

In terms of the development of a solar project, MISO’s topography also plays in its favour when building a PV plant there.

“One aspect of MISO, in particular, is the geographic realities. There’s a lot of flat farmland in MISO,” says Klooster, adding that it is less populated and has fewer population centres than PJM, for instance.

Even though some differences might occur between states, especially in terms of permitting, with Minnesota having a state permit process, the interest is the same across all the territory for landowners, explains Klooster.

“Local utilities are offsetting or replacing their fossil generation fleet with renewable energy. So there’s a lot of opportunity from north to south with local utilities,” adds Tippett. Corporate off-takers, on the other hand, are looking into “the dynamics of the transmission infrastructure, to see where it makes the most sense to buy the energy and then deliver the energy through the MISO system”.

MISO’s ancillary ban on renewables

Despite the ever-increasing interest in solar PV from Louisiana to Minnesota from developers and investors alike, the RTO/ISO has not yet fully embraced renewables on all fronts. One of the ongoing issues between renewables and the MISO territory is the latter’s ban on dispatchable intermittent resources – solar, wind and hybrid battery storage – to provide ancillary services. The move prompted nonprofit, Earthjustice, to file a Section 206 complaint – an administrative complaint – with the Federal Energy Regulatory Commission (FERC) in 2023 on behalf of the SEIA.

The issue of the ban was because MISO codified it in its tariff, and was deemed “unjust and unreasonable”, explains Aaron Stemplewicz, senior attorney at Earthjustice. “The reason why we believe that was because there’s a lot of technical data out there showing that these resources are fully technically capable of providing ancillary services.”

Studies in CAISO, for example, showed that wind and solar could successfully provide ancillary services, while other smaller balancing areas have also demonstrated that wind can successfully provide ancillary services, adds Stemplewicz.

In the end, FERC rejected Earthjustice’s complaint late in 2023 and upheld MISO’s ban. It did acknowledge the technical capabilities of renewable resources to provide ancillary services; however FERC argued that the times when it would be most profitable for renewables to supply ancillary services, they would not be able to deliver the power because they would be behind transmission constraints. “In other words, the power from the renewables would not be able to get to where they needed to go,” Stemplewicz says. “That being said, I would not concede that renewables (particularly solar) would never be profitable or are always behind these constraints.”

Stemplewicz highlights that this could delay the use of renewables – solar, wind and hybrid storage – as ancillary services when actually needed, as it would be necessary to file another complaint.

Although not all renewables are banned from providing ancillary services, standalone battery storage is still able to participate in the ancillary service, despite hybrid making more financial sense. “It’s more likely that hybrids are going to be the ones participating in the ancillary services space, based on the research that we have found. They’re more likely to more easily make revenue than standalone wind or solar for ancillary services,” explains Stemplewicz.

Forward-thinking on ancillary services

Even though ancillary services are not a big financial market at the moment, Stemplewicz says that the lawsuit was brought as a forward-thinking one as ancillary services for renewables can become more important and more profitable in the future, with the mix of available resources changing in the coming years.

Even though the decision FERC made last year was not the one Earthjustice expected, it still left the door open to submit a new challenge in the future. Once renewables are no longer behind congestion restraints and are widely available to provide ancillary services, it would set the stage for the next step, says Stemplewicz.

“At that time, we would need to re-file the complaint in sort of an as-applied challenge and say, ‘Okay, you wanted us to wait until it’s profitable, it is now profitable’. You’ve already said they’re capable. You were just waiting for a point in which the congestion is relieved such that these renewables can provide these services, then bring the [Section] 206, then presumably we will get a favourable ruling.”

“I fear that the approach FERC has taken here is that when these ancillary services are needed, and when they’re capable of getting on the system, we’re going to have a delay now to get Section 206 filed to get new tariff language hammered out in the stakeholder process. We might be in a place where we need these ancillary services from these resources, but we’re not getting them because of an administrative delay,” adds Stemplewicz.

Similarly, projects are unlikely to become financially unviable due to the lack of participation in the ancillary service at this stage and the value of the ancillary service market, yet it could change in the future.

Stemplewicz explains that Earthjustice filed a complaint with the MISO territory as it was the only RTO or ISO to have an explicit ban written into the tariff stating dispatchable renewable sources cannot participate in providing ancillary services, adding: “Other RTOs or ISOs might have a sort of tacit ban or operating requirements that make it impossible for a wind, solar or hybrid resource to participate in that market.”

With the Inflation Reduction helping accelerate the interest and growth of renewables across the entire country and MISO investing more than US$10 billion in 18 transmission projects in 2022 – the first in a four-tranche transmission planning process – that would support 53GW of new renewable energy resources, Stemplewicz expects a lot of renewables to come online as well as more transmission lines.

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