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November 5, 2024

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MISO Subcommittee to Act on Bad Actor Demand Response

CARMEL, Ind. — MISO’s Market Subcommittee will assist MISO in drafting tariff requirements to discourage market participants from committing fraud in MISO’s demand response market.  

At a July 9 Market Subcommittee meeting, MISO principal market design adviser Michael Robinson presented draft rewording and additional paragraphs in its tariff to “address inappropriate behavior by certain market participants.”  

Robinson said MISO is taking suggestions from stakeholders on how it can tweak its tariff redlines to best deter fraudulent demand response. The grid operator hopes to have rules ready to file with FERC at the end of the year.  

Over the past two years, FERC staff have caught three companies manipulating MISO’s demand response market and collecting unjustified payments. The commission found that an air separation facility in Indiana accepted payments for phantom load reductions, an Arkansas steel mill engaged in a yearslong failure to reduce electricity use, and an obscure, Texas-based LLC formed to sell in-car ketchup holders fraudulently enrolled customers and made faux DR offers in three capacity auctions. (See FERC Catches Ketchup Caddy Co. in Another Fake DR Scheme in MISO.)  

Robinson said MISO plans to shut down avenues for demand response resources to be paid for artificial curtailments or over-collect when they deliberately inflate their baseline electricity use to exaggerate reductions. Likewise, MISO wants to make it more difficult for companies to enter fraudulent registrations, where unwitting end-use customers are entered into DR contracts without their consent.  

Robinson referenced Baltimore’s Camden Yards DR scandal a decade ago, where management would turn the baseball stadium’s lights on when the Orioles weren’t playing to ratchet up baseline use and make cuts to load look more dramatic. He also said MISO’s now-infamous Ketchup Caddy episode falls under the fraudulent registration category.  

MISO is vetting draft tariff language with stakeholders that would have demand response resources providing proof of contracts and hourly meter data and making executive attestations to their reductions.  

MISO also is considering screening DR offer parameters to ensure they are consistent with a resource’s ability and setting specifications on how and when DR resource testing must occur to weed out baseline manipulation. It’s also mulling excluding reduction hours from baseline use calculations, rather than excluding the entire days when reductions occur.  

MISO’s Neil Shah said the new requirements are motivated by the recent demand response deceptions that FERC staff have uncovered. 

Michigan Public Power Agency’s Tom Weeks asked if MISO also is working in more examination and auditing of companies that register for demand response participation but could appear suspicious.   

Robinson confirmed MISO is working on bolstering its screening process and is in discussions with the Independent Market Monitor about how to best detect sham DR. 

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IRENA Says World Needs to Build Renewables Faster

The latest statistical report by the International Renewable Energy Agency shows global buildout of renewables progressing too slowly to meet the 2030 target IRENA set to limit global warming. 

Installed capacity of renewables rose 14% in 2023, IRENA said July 11 as it announced the release of “Renewable Energy Statistics 2024.” That is the largest one-year jump this century and compares with 10% compound annual growth from 2017 to 2023. 

But even if the world could bump its renewables 14% higher every year, it would reach only 9.7 TW installed capacity by 2030, 13.4% short of the 11.2 TW specified in the 1.5° C Scenario devised by IRENA and endorsed by world leaders at COP28. 

Continued growth of 10% per year puts the world at only 7.5 TW of renewables by 2030, or 67% of the target. 

In the announcement, IRENA Director-General Francesco La Camera said: “Our new report sheds light on the direction of travel; if we continue with the current growth rate, we will only face failure in reaching the tripling renewables target agreed in the UAE Consensus at COP28, consequently risking the goals of the Paris Agreement and 2030 Agenda for Sustainable Development.” 

La Camera also flagged the geographic disparity in the report’s data — 3,749 TWh of renewable energy was generated in Asia in 2022, for example, compared with just 205 TWh in Africa.  

“These patterns threaten to exacerbate the decarbonization divide and pose a significant barrier to achieving the tripling target,” La Camera said. 

This chart shows the growth of renewables in comparison with other means of power generation. | International Renewable Energy Agency

The executive summary accompanying the report breaks out some global statistics: 

    • Renewable energy sources generated 29.1% of the 29,031 TWh generated in 2022, the last full year for which generation data is available. 
    • Total electric generation grew 2.4% per year from 2011 to 2022; renewable generation grew at an annual rate of 6.1%, and nonrenewables grew at 1.3%. 
    • Variable resources — wind and solar — climbed from 1.1% of renewable generation in 2000 to 40.2% in 2022. 
    • Solar (1.42 TW), hydro (1.27 TW) and wind (1.02 TW) accounted for almost all renewable energy nameplate capacity online in 2023, with bioenergy a distant fourth place at 149 GW. 
    • Hydro (4,330 TWh), wind (2,098 TWh) and solar (1,294 TWh) accounted for most of the renewable energy generated in 2022, with bioenergy relatively close behind at 619 TWh. 
    • North America generates the most electricity from renewables of any region per capita; it generates the second-highest number of renewable watts of any region; and the renewable percentage of its electricity mix is fifth highest. 
    • The huge gap between Asia’s 3,749 TWh of renewable generation and Africa’s 205 TWh indicates a disparity in consumption as well — Asia’s electricity mix is 26% renewable, while Africa’s is 23% renewable. 
    • The Middle East region was far behind the rest of the world on renewable energy use in 2022, deriving just 3% of its electricity from renewable sources, while South America was far ahead, deriving 75% of its power from renewables, much of that hydropower. 

COP28 President Sultan Al Jaber said: “Today’s report is a wakeup call for the entire world: While we are making progress, we are off track to meet the global goal of tripling renewable energy capacity to 11.2 TW by 2030. We need to increase the pace and scale of development.” 

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FERC Rejects SPP’s Proposed Uncertainty Adder

FERC has rejected SPP‘s tariff revisions that would modify the adder for uncertainty of expected costs for offers above $1,000/MWh, a modification spurred by Winter Storm Uri.

In its July 11 order, the commission denied the proposed revisions because they directly contradict Order 831, which includes a requirement that any adders included in cost-based incremental energy offers above $1,000/MWh not exceed $100/MWh (ER24-2002).

FERC said that in Order 831, it found it is necessary “to place an upper bound on the level of adders above cost” when incremental energy offers exceed $1,000/MWh and stating explicitly that “such adders may not exceed $100/MWh.”

SPP proposed in May to allow cost-based incremental energy offers above the threshold to include an uncertainty adder of up to 10% of verifiable short-run marginal costs. The commission said the change would lead to adders that exceed $100/MWh.

The grid operator said it suffered “severe operational challenges” in its footprint during the 2021 winter storm. It received about 50,000 offers that were subject to the Market Monitoring Unit’s verification because they exceeded $1,000/MWh.

SPP proposed to modify the uncertainty adder for offers of more than $1,000/MWh from a maximum of $100/MWh to a maximum of 10% of verifiable short-run marginal costs. It said the 10% adder would provide better protection against price volatility in the spot market and help mitigate risk related to fuel procurement cost uncertainties and cost reimbursement during extreme weather events.

The MMU filed comments supporting the tariff revisions. It said the RTO’s proposal more effectively reflected uncertainty in the expected cost of energy production and should improve price formation when energy offers are above $1,000/MWh.

FERC said it was “sympathetic to SPP’s concerns” and suggested the RTO streamline or automate its manual verification process.

“This, in turn, could improve price formation when offers are between $1,000/MWh and $2,000/MWh,” the commission said.

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Talen Energy Deal with Data Center Leads to Cost Shifting Debate at FERC

Talen Energy’s deal to carve out capacity from its Susquehanna Nuclear Plant to serve a growing data center on its site drew protests at FERC from other parties who argued the deal and others like it could shift costs and threaten reliability (ER24-2172). 

Talen developed the data center on its own, which is next to the Susquehanna plant in northeastern Pennsylvania, and this year sold it to Amazon Web Services. PJM filed an amendment to an existing interconnection service agreement (ISA) so it could expand the data center’s power from 300 MW to 480 MW, while the nuclear plant produces 2,520 MW between two reactors. Eventually, the data center could grow to 960 MW. 

The deal included operating provisions that are meant to preserve reliability, all of which were agreed to by the nuclear plant, PPL (the local utility) and PJM, Talen subsidiary Susquehanna Nuclear told FERC. 

The debate kicked off with a protest Exelon and American Electric Power filed last month, arguing that the application to change the ISA brings up too many novel issues and should be set for hearings. 

“Absent further factual development, the commission will be unable to make an informed decision, and parties will be denied due process,” the two utilities said. 

AEP and Exelon argued that the ISA represents “an end-run around the PJM stakeholder process” and would create new categories of load and alter the fundamentals of the RTO’s market design. While the two claimed the deal itself would lead to $140 million per year in cost shifts to other consumers, they argued the real risk is that it will be replicated many times over. 

“Should large quantities of load rush to co-locate with generation on terms that bear even a resemblance to the ISA at issue here, PJM capacity markets will have steadily decreasing volume as the capacity resources flee to serve load that uses and benefits from — but does not pay for — the transmission system and the ancillary services that keep the system running,” AEP and Exelon said. 

Building generation and transmission to replace that lost capacity will take years, and in the meantime, a tighter supply-and-demand balance will result in “rising energy and capacity prices” and make it harder to address resource adequacy, they added. 

Their protest drew rebukes from Talen, Amazon, Constellation Energy and Vistra. Both Constellation and Vistra, which filed a reply jointly, own large generation fleets with major competitive retail power businesses. Constellation was spun off from Exelon in 2022. 

Data centers are being driven by advances in artificial intelligence, which the White House, state governments in PJM and others see as a huge economic opportunity, Constellation and Vistra said in their filing July 10. 

“The corresponding technological advancement is critical to America’s competitiveness and our national security and thus building out our digital infrastructure has been a focus at both the federal and state levels,” they added. 

They said the proceeding in question is limited, and FERC has a straightforward task: assessing the ISA updates needed to facilitate interconnection of the expanding data center. The protest from AEP and Exelon throws unrelated spaghetti on the wall to see what might stick, the companies said. 

“It is yet another attempt by AEP and Exelon to deter or outright prevent the development of new data centers, particularly co-located, behind-the-meter data centers,” Constellation and Vistra said. “The protest spotlights AEP and Exelon’s efforts to erect roadblocks to PJM generators serving co-located load, which would leave utilities as the only option for meeting the robust demand for data center infrastructure in the region.” 

The behind-the-meter configuration of the Susquehanna deal means the data center is not leaning on the grid at all, and if anything, it saves some money on the transmission upgrades that meeting such large demand would otherwise require, they said. 

If FERC has concerns about the issue of data centers connecting directly to generators, then it should require PJM to restart its stakeholder process on the issue but limit that to 90 days to “expeditiously accommodate these types of innovative, behind-the-meter arrangements in light of the nation’s urgent data infrastructure needs,” Constellation and Vistra said. 

Susquehanna told FERC the updated ISA is supported by PJM studies that show no reliability impacts from increasing the co-located load from 300 MW to 480 MW. It noted that FERC already approved the initial 300 MW. The filing is a routine document that FERC regularly approves, the firm said. 

“Susquehanna Nuclear did not hoodwink PJM and PPL,” the firm said. “The parties to this interconnection agreement, being fully aware of the configuration, the facts and the current operations for this co-located load, simply do not share AEP/Exelon’s concerns.” 

PJM and Monitor Responses

PJM filed a response to AEP and Exelon urging FERC to approve the ISA, but it added that that does not foreclose it from looking at new rules on co-locating large demands with power plants. The RTO ran a stakeholder process on that subject in 2022 and 2023, but it did not lead to any rule changes. 

“Depending upon the outcome of any such process, other ISA revisions may be necessary,” PJM said. “But those are separate matters for another day in another docket and should be viewed as outside the scope of this narrow proceeding about a single amended service agreement. Any open policy issues do not change the fact that, today, Susquehanna is indirectly supplying power to a co-located load arrangement.” 

While Talen and other major retailers want FERC to avoid upsetting the applecart on a growing source of demand for their services, other parties agreed with the two utilities that the issue warrants a deeper look. 

PJM’s Independent Market Monitor seconded AEP and Exelon’s protest, saying the amended ISA brings up significant issues that go well beyond one contract. 

“It is well understood that this ISA will be precedential and will lead to similar arrangements at many other PJM nuclear plant sites and potentially other generator sites,” the Monitor said. “PJM needs to provide a comprehensive analysis of the impact of removing significant levels of generation from the market.” 

The policy decisions embedded in the ISA that cover how backup power is handled, and other issues, differ greatly from positions PJM previously took in the stakeholder process, the IMM added. 

Talen could have sold output from the plant to the data center over the transmission system, but the co-location approach avoids transmission and distribution charges, as well as being directly subjected to the rate regulation of states and FERC, the Monitor said. 

It also argued that if other nuclear plants in PJM started offering similar services to large customers, it would lead to higher costs and emissions, eventually undermining reliability and the RTO’s markets. 

“Power flows on the grid that was built in significant part to deliver low-cost nuclear energy to load would change significantly,” the IMM said. 

The Pennsylvania Public Utility Commission posted a short intervention, but it agreed with the calls for FERC to take a deeper look at the issue. 

The Natural Resources Defense Fund weighed in with a blog post arguing that while the data center would get carbon-free power, it would lead to higher demand for natural gas generation to serve other nearby demand and that would lead to higher emissions. 

Other nuclear plants are considering similar deals, with NRDC pointing to Dominion Energy’s Millstone plant in Connecticut, Public Service Enterprise Group’s nuclear plants in New Jersey and even the previously retired Palisades plant in Michigan. 

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Texas Utilities: Beryl’s Damage Unlike that of Cat 1s

Transmission providers told Texas regulators July 11 that Hurricane Beryl’s high winds deep inland in a heavily wooded region led to significant customer outages that will last more than a week after the storm’s landfall.

Representatives from four of the state’s primary wires carriers told the Public Utility Commission during an open meeting that more than 1.4 million customers were still without power in the Houston area. That is down from the nearly 3 million outages when Beryl came ashore July 8.

Entergy Texas CEO Eli Viamontes, who began his utility career at Florida Power and Light, said he was caught off-guard by wind speeds that exceeded 80 mph more than 70 miles from the Gulf Coast.

“I’ve seen many storms in my career, coming from South Florida, and the sustained winds keeping up that far inland was surprising,” he said. “You combine that fact with the most densely populated area of our service territory, that also happens to be one of the most densely vegetated areas as well, you literally have that perfect combination that has caused the [outage] numbers to certainly seem higher given a Category 1, but the damage is real.”

Entergy lost seven of eight major transmission ties in its footprint, and 385 poles, 195 transformers and 34 substations. It peaked at 252,000 customer outages July 8 but reduced that number to just over 101,000 on July 11.

Commissioner Jimmy Glotfelty, a Houston native, got a personal view of some of the destruction the day after the storm hit when he visited a CenterPoint Energy staging site.

“I think what was astonishing in Houston was the number of large trees that were pulled up by the root ball as opposed to broken at the top,” he said. “It was just pretty amazing. These aren’t ones that just require chainsaws. You have to have cranes to get them out of the road, so it’s kind of a different kind of storm, from my perspective.”

Jason Ryan, an executive vice president with CenterPoint, said an 83-mph wind gust at George Bush Intercontinental Airport, 20 miles north of downtown Houston, was greater than the wind speeds measured during Hurricane Ike in 2008. A Category 2 storm, Ike caused an estimated $30 billion in damage in Texas and other states.

“I’ll set aside whether it was a Category 1, 2, 3 or 4 hurricane,” Ryan said of Beryl. “It was a significant hurricane as it came ashore and as it left our system midday.”

The CenterPoint executive said the storm’s path was “one of the worst paths a hurricane could take.” The greater Houston area was on Beryl’s “dirty side” east of the eyewall with the strongest winds and severest weather as it swirled from right to left, he said.

“The wind speeds were higher further inland,” Ryan said, noting the National Weather Service issued 67 tornado watches as it pushed inland.

The level of destruction has slowed the damage assessment the utilities conduct before beginning restoration work. Ryan said CenterPoint expected to complete its damage assessment July 11. He said the company had already restored about 1.2 million homes and businesses as of July 10, leaving a little over 1 million to go. About 80% of the restoration will be completed July 14, with about 500,000 outages beginning a second week without power.

“We need to know what kind of crews to send where. That’s what our damage assessment workers do in the early days after a storm,” Ryan said. “If I have substantial damage to distribution poles, if I’ve got poles on the ground, I need to send a construction crew. If I have trees on lines, I need to send vegetation management crews to go in and clear those trees. If I can quickly restore service by doing minor work on facilities, I can send much smaller crews out to do that. We can’t start sending crews out until we get that damage assessment done.”

CenterPoint has borne the brunt of criticism leveled over restoration service as temperatures rise and, with it, the stress on residents sitting in long lines for gasoline or in crowded restaurants.

Houston Mayor John Whitmire has said the utility “needs to do a better job.” U.S. Rep. Sylvia Garcia (D-Texas) went to social media to tell CenterPoint, “Your failure during this crisis is unacceptable.”

Also on social media, one wag pointed out the Whataburger fast-food chain’s app is a better outage tracker than CenterPoint’s.

Texas Gov. Greg Abbott, who is on an economic development trip in East Asia, called for an investigation into the “multiple occasions” the Houston region has suffered through a major outage. In May, a derecho’s 100-mph winds knocked 922,000 CenterPoint customers offline, some for more than two weeks; the utility has estimated it will cost $475 million in repair work.

PUC Chair Thomas Gleeson said he has had discussions with the governor’s office and Lt. Gov. Dan Patrick and that “we’re going to figure this out.” He said the commission plans to file a report before the January 2025 legislative session with learnings from its review and “potentially some legislative solutions that we may need.”

“I want to assure everybody this will be the first step in this process, not the last step,” he said.

The PUC was a receptive audience for Entergy, CenterPoint, AEP Texas and Texas-New Mexico Power. The commissioners did not offer critiques of their performance but provided suggestions for better communications with their communities.

The utilities have either provided resilience plans to the PUC or will soon, a result of recent legislation.

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NERC Sends Virtualization Standards to FERC

NERC this week made good on an order FERC issued more than eight years ago, seeking commission approval for a suite of changes affecting nearly every entry in the library of Critical Infrastructure Protection (CIP) standards that ERO staff have said are designed to “future-proof” the electric grid for emerging technologies (RM24-8). 

The submission comprises 11 new standards, along with four new and 18 revised definitions for the NERC glossary. They represent the final product of Project 2016-02 (Modifications to CIP standards), and were adopted by NERC’s Board of Trustees at its most recent open meeting in Washington, D.C. (See Christie, Clements Praise NERC’s Honesty at Board Meeting.) 

Project 2016-02 arose from FERC’s Order 822, issued Jan. 21, 2016. The order called for NERC to address several emerging issues related to the increasing use of cyber assets to control the grid, including virtualization, temporary devices connected to grid cyber equipment, and protection of communications both between control centers and between control centers and cyber assets. 

In its filing, NERC explained that as the “technology supporting and enabling the industrial control systems that operate the [grid] has evolved rapidly … the risks facing the [grid] and the methods for mitigating those risks have also evolved.”  

Virtualization, which the National Institute of Standards and Technology defines as “the process of creating virtual, as opposed to physical, versions of computer hardware to minimize the amount of physical hardware resources required to perform various functions” (the definition cited in NERC’s filing) is one such advance. NERC said the changes to the CIP standards and to the glossary will allow entities to make full use of the “concepts and efficiencies,” as well as security techniques, made possible by virtualization.  

The standards filed by NERC this week are: 

    • CIP-002-7 (Cybersecurity — BES cyber system categorization) 
    • CIP-003-10 (Cybersecurity — security management controls) 
    • CIP-004-8 (Cybersecurity — personnel and training) 
    • CIP-005-8 (Cybersecurity — electronic security perimeters) 
    • CIP-006-7 (Cybersecurity — physical security of BES cyber systems) 
    • CIP-007-7 (Cybersecurity — systems security management)  
    • CIP-008-7 (Cybersecurity — incident reporting and response planning) 
    • CIP-009-7​ (Cybersecurity — recovery plans for BES cyber systems)
    • CIP-010-5 (Cybersecurity — configuration change management and vulnerability assessments) 
    • CIP-011-4 (Cybersecurity — information protection) 
    • CIP-013-3 (Cybersecurity — supply chain risk management)​ 

The current versions of these standards are “designed around the concept that devices have a one-to-one relationship between software and hardware,” NERC said, an approach that prevents entities from taking advantage of some recent software advances. For example, security models such as zero-trust architecture can be improved with virtualization techniques that allow for more granular management of communication than traditional perimeter-based security models. 

These new CIP standards permit the use of virtualization and also account for risks associated with its use, such as cyberattacks that use virtual systems on the same hardware to attack each other. NERC said the standards were structured around security objectives that focus on “essential elements” of reliability rather than specific technology approaches.  

In addition, the developers recognized that many utilities do not use virtualization. By using security objectives, they hoped to create “a framework that could adapt to newer technologies and innovative security models” as the use of virtualization spreads through the ERO Enterprise. 

2024 already has seen several changes to the CIP standards. Last month, NERC submitted CIP-015-1 (Cybersecurity — internal network security monitoring) for FERC approval; the new standard would require utilities to monitor communications within their internal networks, with the goal of preventing attacks like the SolarWinds hack of 2020. (See NERC Submits INSM Standard for FERC Approval.)  

In addition, FERC approved CIP-012-2 (Cybersecurity — communications between control centers) in May. (See FERC Accepts NERC’s New Cybersecurity Standard.) The standard will require entities to mitigate the risk of lost communications between control centers, as well as the loss of real-time intra-control center assessment and monitoring data. 

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NYISO Monitor: NYC Capacity Costs Rose 221% in Q1

New York City saw a 221% increase in capacity costs in the first quarter because of the retirement of over 600 MW in peaker plants and the increase of more than 300 MW in the local installed capacity requirement, NYISO’s Market Monitoring Unit told stakeholders July 10.

Capacity costs elsewhere in the state rose “modestly,” Potomac Economics said in presenting its first-quarter State of the Market report to the Installed Capacity Working Group.

Overall, the MMU found that the market performed competitively in the first quarter. But spot capacity prices rose by 311% in New York City over the first quarter of 2023. The city’s ICAP requirement was increased because of higher load forecasts.

All-in prices ranged from $38/MWh in the North Zone to $81 in New York City. Prices rose west of the Central-East interface and the city while falling in the rest of Eastern New York. Potomac attributes this partially to falling natural gas prices.

Across the state, gas prices fell between 8 and 29% compared to a year ago because of the mild winter and continued growth in gas production. But the city was left behind in this trend and saw a 10% increase.

“The last two winters had much lower gas prices than in the previous winter. … That’s virtually true everywhere,” said MMU’s Pallas LeeVanSchaick.

New York City’s experienced modest increases in energy prices driven by congestion from transmission outages, while NYISO day-ahead congestion revenues fell 47%. The completion of several transmission projects increased transfer capacity over the Central-East and UPNY-SENY interfaces.

“Congestion revenue shortfalls during the quarter were pretty small,” said LeeVanSchaick. “They’re way down from the previous couple years because the amount of outages was really reduced quite a bit.”

The city also accounted for a higher level of congestion this quarter, most of which occurred during a period of low temperatures in January that coincided with the outage of a transmission line, reducing the import capability. That outage alone led to $5 million in congestion shortfalls during the cold snap.

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NEPOOL Markets Committee Restarts Work on Capacity Market Changes

After a brief pause following FERC’s approval of another delay to ISO-NE’s 19th Forward Capacity Auction (FCA 19), the RTO presented the initial scope of its work to coordinate resource capacity accreditation improvements with proposed capacity market timing changes at the NEPOOL Markets Committee meeting July 9-10. 

The potential changes have been an extended work-in-progress for the RTO and its stakeholders. ISO-NE launched its resource capacity accreditation (RCA) project almost exactly two years ago, while the RTO has been discussing moving to a prompt and seasonal capacity market for over a year. (See ISO-NE Starts its Capacity Accreditation Journey and ISO-NE Considers Major Capacity Market Changes.) 

Moving to a prompt and seasonal auction would reduce the time between the auction and the capacity commitment period (CCP) from over three years to likely just a few months, while also breaking up the yearlong CCP into seasons.  

“With the FERC approval of the further delay filing, we will turn our attention to working with stakeholders on [capacity auction reform] and will not continue to study accreditation in a forward, annual framework,” said Chris Geissler of ISO-NE. (See FERC Approves Additional Delay of ISO-NE FCA 19.) 

Geissler said the key considerations for the project scope are making sure the work is finished in time to implement for the 2028/29 commitment period (CCP 19), prioritizing the highest-value reforms and avoiding adding components that jeopardize the overall timing or development of the key aspects.  

The new capacity market design “likely needs to be completed, filed and approved well in advance of CCP 19,” Geissler said. “Expect that this will require hard decisions because even the most narrow project scope that achieves a prompt and seasonal market with accreditation reforms requires enormous design and implementation efforts.” 

The core aspects of the capacity auction reform (CAR) will include defining the exact timing of a prompt and seasonal auction, determining how entering and retiring resources will be treated under this construct, developing seasonal demand curves and incorporating the work that already has been completed on capacity accreditation into the new auction format.  

Geissler said ISO-NE and stakeholders already have made “significant progress” on developing a new accreditation method, but “outstanding areas remain and further changes are necessary with a prompt and seasonal capacity market.” 

The project likely will include work on a new approach to accounting for gas constraints, along with an update to the current cost of new entry value, since “accreditation reforms and modeling changes would impact this value, which is used to derive the capacity demand curves,” Geissler said. 

Geissler said ISO-NE also is contemplating moving from a descending clock to a sealed bid auction format, developing simultaneous seasonal bidding to account for resources that could receive an obligation for just one season, and accounting for resource startup times in accreditation.  

ISO-NE is considering whether to submit CAR’s resulting tariff changes as a single filing or a series of filings. For changes that ISO-NE is unable to complete for CCP 19, Geissler noted that the RTO could explore “improvements and enhancements for later commitment periods, after CAR has gone into effect.” 

Internal Market Monitor Report

Wholesale market costs were down in 2023 relative to the prior year, falling back to the levels seen prior to the spike in natural gas prices, Donal O’Sullivan of the ISO-NE Internal Market Monitor said in presenting takeaways from the Monitor’s 2023 annual markets report.

The lower costs were in part spurred by the lowest loads experienced in the region “since at least 2000 due to mild weather conditions and the growth in behind-the-meter solar generation,” O’Sullivan said. 

He added that renewables have grown gradually in the region over the past five years but said “the combined impact of behind-the-meter solar and wholesale market solar on load and pricing [time-of-day] profiles is noticeable.” 

The annual report found that the energy market accounted for about 51% of wholesale costs, followed by transmission at 28% and the capacity market at 13%. The Mystic cost-of-service agreement accounted for about 5% of total costs.  

While transmission costs were high, “the market impacts of investments are evident in terms of low congestion, fewer local reliability and voltage commitments, and [fewer] local market power issues,” O’Sullivan said. 

Looking at the resource mix, natural gas generation continued to increase despite the historically low loads. It accounted for 48% of total supply in 2023, compared with 45% in 2022 and 39% in 2019.  

In contrast, imports to the region were down, in part because of an approximately 20% reduction in imports from Canada because of lower reservoir levels, O’Sullivan said.  

Hourly Tracking Proposal Fails to Pass

A proposal by Constellation Energy to enable hourly tracking of generation by the NEPOOL Generation Information System failed to pass the MC with 65.1% in favor, falling just short of the two-thirds majority needed to pass.  

The company has argued that enabling hourly tracking would cost ratepayers relatively little and would help boost the market for carbon-free generation that matches load. 

NEPOOL estimated that upgrading the system to accommodate the proposal would cost $75,000.  

Opposition to the proposal came from members of the end user sector and the publicly owned sector. Opponents made the case that the proposal would benefit companies selling certificates at the expense of ratepayers and is not required by regulation. 

The proposal now heads to the NEPOOL Participants Committee. 

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3 OSW Proposals Submitted to NJ

It’s deja vu all over again as the window closes for New Jersey’s fourth offshore wind solicitation: The three developers that delivered proposals by the July 10 deadline all submitted bids to the state previously. One of the proposals contains a rebid of a project that already holds a New Jersey contract, and the other two possibly are reboots of proposals that derailed in New York. 

Atlantic Shores Offshore Wind won a contract for the 1,510-MW first part of its self-named proposal in June 2021. It now is submitting both Project 1 and Project 2 — a combined 2,800-plus MW — in a single proposal. 

Also submitting bids were Attentive Energy, for a project of unspecified capacity, and Community Offshore Wind, for a 1,300-MW project. 

New Jersey is seeking 1.2 GW to 4.0 GW of nameplate capacity in its fourth solicitation, which it opened April 30. 

The Garden State, like most other East Coast states, has ambitious goals for the emissions-free power sector starting to take shape in U.S. waters.  

And like most of the other Northeastern states, New Jersey is scrambling to recover from a confluence of macroeconomic factors over the past two years that led to cancellation of more than half the contracts awarded for proposed wind farms. 

In late 2023, New Jersey suffered the first and so far only outright project cancellation in the current wave of offshore wind development, when Ørsted scratched Ocean Wind 1 and 2. (See Ørsted Cancels Ocean Wind, Suspends Skipjack.) 

Among New Jersey’s responses to this setback was to allow developers who had been awarded a contract in the first or second solicitation to submit a rebid for that project in the fourth solicitation, to account for rising costs. 

Atlantic Shores Project 1 was the only project that still fit this definition, and the company apparently took advantage of the opportunity. 

In its announcement July 10, Atlantic Shores made no mention of the fact that its proposal was partly a rebid, nor of any proposed cost increases. 

Instead, it emphasized the ability of its proposal to be the state’s first mover in the offshore wind sector. It is a mature project, receiving a positive record of decision July 1 from the U.S. Bureau of Ocean Energy Management. (See BOEM Approves NJ’s Atlantic Shores OSW Project.) The company anticipates full state and federal permitting by the end of 2024. 

Attentive Energy also announced submission of a proposal July 10, but offered limited detail. 

Attentive Energy Two (1,342 MW) won a New Jersey offshore renewable energy certificate (OREC) contract in January 2024 as a result of the state’s third offshore wind solicitation. 

Attentive Energy One (1,400 MW) won a provisional contract in New York in November 2023, but that contract and two others collapsed six months later, after GE Vernova halted development of the 18-MW wind turbine that was to be used. (See NY Offshore Wind Plans Implode Again.) 

The end of the Attentive Energy One contract in New York was announced April 19, shortly before the start of New Jersey’s fourth solicitation. 

Attentive’s lease area in the New York Bight is 11 miles closer to New Jersey than to New York. 

Community Offshore Wind, 24 miles closer to New Jersey than to New York, also has a history with both states. 

It submitted a proposal in New Jersey’s third solicitation in 2023, then withdrew it when it determined it could not deliver an affordable proposal under the framework of the solicitation. 

It won a provisional contract for Phase 1 in New York’s third solicitation, then saw that evaporate six months later because of GE Vernova’s turbine strategy shift. 

It submitted a bid for Phase 2 in New York’s fourth solicitation but was “waitlisted” in February 2024 as the state chose instead to focus on two mature projects being rebid, which could get steel in the water much sooner and help rebuild lost momentum in the state’s quest for an offshore wind sector. 

The New Jersey Board of Public Utilities expects to decide on contracts in the fourth solicitation in December. 

As of mid-July 2024, the Garden State’s portfolio of offshore wind contracts consists of Atlantic Shores Project 1, Attentive Phase 2 and the two-phase, 2,400-MW Leading Light. The Attentive and Leading Light contracts were awarded in January 2024. (See NJ Awards Contracts for 3.7 GW of OSW Projects.) 

In a prepared statement, Community Offshore Wind said this latest New Jersey solicitation represents another chance to help that state’s economy and environment: “Our proposed project would generate 1.3 GW of clean wind energy and create programs to benefit communities for decades, including creating jobs for New Jersey workers and supporting new clean energy career pathways for future generations,” President Doug Perkins said. “New Jersey is well-positioned to become a hub of the U.S. offshore wind industry, and we look forward to working with our partners in Trenton and communities across the Garden State.” 

In a prepared statement, Atlantic Shores Offshore Wind CEO Joris Veldhoven said: “Our proposal serves to expand and enhance existing strategic partnerships while growing our portfolio of economic development initiatives across the Garden State. Working with our host community partners, we are keen to continue securing critical supply chain investments that will create great-paying union jobs, support local workforce development and contribute to economic prosperity across New Jersey.” 

Atlantic Shores is a partnership of Shell New Energies US and EDF-RE Offshore Development. 

Attentive is a partnership of TotalEnergies, Rise Light & Power and Corio. 

Community is a partnership of RWE and National Grid Ventures. 

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Startups: Market Will Move New Cleantech Regardless of Election Outcome

The U.S. Energy Association had billed its July 10 virtual briefing as a look at emerging technologies in the energy space, with a panel of industry executives talking about grid-enhancing technologies, nuclear fusion, small modular reactors, long-duration storage and low-carbon natural gas plants. 

But questions from energy reporters at the event quickly shifted the focus to topics of the moment: rising energy demand from data centers and what happens to U.S. energy policy if former President Donald Trump is re-elected. 

Arvin Ganesan, CEO of Fourth Power, a long-duration storage startup, sees the upcoming election as a secondary consideration. “The investment moment we’re in is largely derived by prevailing interest rates,” he said. What is driving the market is “how the electrical system is operated, and that is through, largely, state- and utility-led investments and procurement.” 

The growth in demand from data centers has the potential to shift utilities’ approach to their operations, he said. “The amount of load growth is, for these utilities, beyond stressful; it is a threat that they need to manage. … Utilities are conservative in general with technology deployment, but their need for new electrons is so high, some of that dynamic is changing.” 

Fourth Power’s storage technology turns excess renewable power into high-temperature heat that can be stored in carbon blocks and provide five to 500 hours of power and could be one-tenth the cost of lithium-ion batteries, Ganesan said. 

Like many in the industry, he sees the tax credits for renewable energy and storage in the Inflation Reduction Act as “fairly insulated from partisanship … given the fact that well over 50% of solar and storage installations are in ‘red’ districts, and the employment created by these industries span the breadth of geographies in states and in districts.” 

Alan Ahn, deputy director for nuclear at Third Way, a center-left think tank, similarly argued that advanced nuclear has broad support from Republicans and Democrats, pointing to the recent passage and signing of the bipartisan Accelerating Deployment of Versatile Advanced Nuclear for Clean Energy (ADVANCE) Act (S. 870). 

The law is targeted at providing the Nuclear Regulatory Commission with new authorities to, for example, improve and accelerate the permitting of advanced and micro reactors, and study advanced manufacturing techniques to help build reactors faster and cheaper. 

A range of tech companies ― like Google and Microsoft ― are looking at SMRs to provide clean, dispatchable power to data centers, and Ahn expects “robust support for advanced nuclear regardless of whether we have a Democratic or Republican administration.” 

The Biden administration and Department of Energy have provided strong support for advanced SMRs, with billions in federal dollars for two demonstration projects and, more recently, an announcement of another $900 million to support well designed projects that aim to build out a pipeline of SMRs. But companies have been hesitant to move ahead with projects because of the U.S. industry’s recent history of massive cost overruns and schedule delays that plagued the two new reactors now online at Plant Vogtle in Georgia. (See DOE Announces $900M to Kick-start Small Modular Nuclear Pipeline.) 

“The issue is how can we get users to move first,” Ahn said. “I think the conversation has really shifted towards, are there roles that the federal government can undertake to mitigate some of this first-of-a-kind risk?” 

Possible initiatives might include “some sort of completion insurance program or cost-overrun backstop that the federal government can implement,” he said. 

Fusion by Mid-2030s?

Andrew Holland, CEO of the Fusion Industry Association (FIA), is equally bullish on the development of nuclear fusion, which he said could reach commercial scale by the mid-2030s or before, and similarly pointed to data center and industrial demand as drivers. 

Fusion technologies — which heat hydrogen atoms to extremely high temperatures, causing them to fuse together — promise to produce massive amounts of carbon-free power, according to FIA’s website. Because the process does not produce radioactive waste, permitting fusion plants should be simpler, Holland said, requiring only a permit to operate, rather than the permits to construct and operate required for traditional, fission plants. 

Microsoft signed a contract last year for 50 MW of power from fusion startup Helion, and steelmaker Nucor also is partnering with Helion on a 500-MW fusion plant. These deals “do a good job of helping to advance the technology of fusion … because they show there is a de-risked pathway towards getting this energy on the grid,” Holland said. 

“The need to have always-on, always-available, clean, firm power for these data centers can be a really important part of our network and our capital stack as we develop into the next phase of this [technology],” he said. 

Ashley Smith, chief technology and innovation officer for AES, agreed that power demand from data centers, artificial intelligence and transportation and building electrification is driving a sense of urgency among utilities to figure out “how to get more electricity onto the grid.”  

AES has piloted dynamic line ratings at its utilities in Indiana and Ohio, Smith said, but she defended a go-slow approach to GETs and other emerging energy technologies based on traditional utility imperatives of reliability, safety and affordability. 

The company is also looking at “co-location: figuring out how we site certain large loads in areas where the grid is less constrained” and therefore decrease the time to get power online, Smith said. 

‘If You Build It’

Other speakers at the briefing also focused less on politics and more on the market forces that could provide ongoing momentum for emerging technologies, such as NET Power’s natural gas turbines that can capture 97% of their carbon dioxide emissions. 

“Different technologies … mean a lot of different things” to people, said Akash Patel, the company’s chief financial officer. “Some want to focus on the use of natural gas, which makes it reliable and cheap. Some want to focus on the capturing of all the emissions, to make it clean. So, there’s a lot of overlap.” 

NET’s potential customers include not only the tech giants “who will talk about AI till the cows come home, but also the oil and gas operators that are looking for how to reduce their Scope 3 emissions [and] how to use natural gas responsibly,” he said. “So, the approach we took is, if you build it, they will come.” 

Investors certainly have, and they could provide another hedge against political turbulence. Oxy, Constellation Energy and Baker Hughes are the company’s major investors. 

NET has run a 50-MW test plant in La Porte, Texas, since 2018 and is planning a 300-MW utility-scale project to go online in late 2027 or early 2028, also in Texas. 

Utility investors also have helped TS Conductor gain industry acceptance for its carbon-based advanced conductors, said Charles Bayliss, a long-time utility executive and a member of the company’s board. Both National Grid and NextEra Energy are supporting the company, as is Bill Gates’ Breakthrough Energy Ventures. 

Cleantech advanced during Trump’s previous administration, despite lack of federal support, but the flood of federal dollars during the Biden administration has accelerated the market. 

“It is just absolutely a fact that policy will determine how quickly these technologies get to market,” said John Howes, principal at the Redland Energy Group, an industry consulting firm. “There is an absolute connection between policy and the pace at which new technologies get to market. … Nobody believes that policy changes will destroy these industries, but personally, I find it hard to believe that positive policy won’t accelerate these technologies.”