MISO staff warn of continued capacity shortfall

  • Market: Coal, Electricity
  • 08/29/22

The Midcontinent Independent System Operator (MISO) is at risk of continued resource capacity shortfalls in coming years because of planned US power plant retirements and expected growth in electricity demand, according to a draft report from the grid operator's staff.

The grid could need more than 100GW of new nameplate capacity by 2030 and 200GW by 2041 to meet electricity load and utility company decarbonization goals, staff members told MISO's resource adequacy subcommittee on 24 August.

MISO staff tied much of the increased need for nameplate capacity to expected decreases in accredited resources as more traditionally baseload coal-fired power plants are replaced with renewable generation, which MISO tends to rank lower in terms of being able to reliably provide power to the grid. MISO staff projected renewables would grow to 30pc of the grid's annual energy by 2027 and may account for as much as 60pc of the grid's power output by 2041. Meanwhile, generators plan to close a little under 34,000MW of coal-fired power plant capacity in the grid and 12,000MW of natural gas by 2041, and add more than 60,000MW of wind, solar and battery resources.

With the energy transition, the amount of currently existing nameplate capacity in MISO will shrink to 146,000MW in 20 years' time from 196,000MW this year, and existing accredited capacity will drop to 112,000MW from 162,000MW.

MISO is also expecting capacity factors at coal and natural gas units to decline. But MISO expects electricity demand on the grid to grow over that time period.

Some parts of the grid are already facing challenges.

MISO's north and central regions had a combined roughly 1,200MW shortfall in the grid operator's 2022-23 planning resource auction in April. And the grid operator requested generator Ameren delay retiring two units of the Rush Island coal-fired power plant, which had been scheduled to close this year.

The capacity deficit could be system-wide next year if generators' addition plans are delayed and companies move forward with planned retirements, MISO staff warned last week. Even if new power is installed as planned, there could be a deficit in capacity across the grid in 2027, they said in slides of their draft report presentation.

In 2027, the amount of accredited existing capacity in MISO may have shrunk to 141,000MW from 162,000MW this year, grid operator staff projected.

MISO serves about 42mn people in 15 central US states and parts of Canada.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
02/27/24

Japan eyes potential of summer power demand: Correction

Japan eyes potential of summer power demand: Correction

Corrects nuclear generation forecasts in paragraph 3 Tokyo, 27 February (Argus) — Japan faces potential similar consumption of thermal power generation fuels this summer with nuclear availability and forecast temperatures mostly in line with a year earlier. The Japan Meteorological Agency forecasts a 50-70pc probability of temperatures during June-August 2024 rising above the 30-year average in all parts of Japan. Average temperatures in Japan's major cities, such as Tokyo, Osaka and Nagoya, during June-August 2023 were higher than the long-term average. This implies that the country is likely to face similar summer temperatures as last year. Nuclear power output is projected to rise slightly in summer from a year earlier. The operating capacity of nuclear power plants is forecast at an average of 9,595MW during June-August, while average actual operating capacity was 9,563MW in the same period in 2023, according to Argus calculations based on data from Japan's Agency for Natural Resources and Energy and notices on the Japan Electric Power Exchange website. Hotter weather across the country in 2023 failed to lift thermal fuel demand, with power demand in Japan's 10 service areas averaging 104.3GW for June-August, down by 1.2pc from the same period a year earlier, according to nationwide transmission system operator the Organisation for Cross-regional Co-ordination of Transmission Operators. The rainy season normally cuts solar output. But sunlight hours were unusually longer in 2023 compared with 2022, which increased solar output and helped curb thermal generation. Continued energy saving efforts also helped to cut electricity use. Japan's LNG consumption for power generation totalled 9.8mn t during June-August 2023, according to the trade and industry ministry. Coal use totalled 26.5mn t, while oil consumption — including fuel oil, diesel and crude — was 57,651 b/d. LPG use was 6,014t. By Nanami Oki and Reina Maeda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Read More
News

Panama urges fleet to avoid Red Sea, keep AIS on


02/23/24
News
02/23/24

Panama urges fleet to avoid Red Sea, keep AIS on

New York, 23 February (Argus) — The Panama Maritime Authority said today it "strongly recommends" all Panama-flagged vessels avoid transiting the Red Sea because of the increasing threat of Houthi attacks on commercial vessels, while warning vessels against turning off their automatic identification system (AIS). Some ship operators have chosen to disable their vessel's AIS to avoid detection by the Houthis with varying levels of success when transiting the region. That puts these vessels out of compliance with "international requirements related to position reporting," the authority said in a notice. More than 120 commercial and private vessels flagged by Panama were transiting the Suez Canal, the Red Sea, and the Gulf of Aden on Friday, according to vessel tracking data reliant on AIS. "All vessels hoisting the Panama flag before, during and after transiting the Red Sea, Gulf of Aden and Persian and their approaches must keep the AIS and long-range identification (LRIT) on except in those cases in which the captain considers that the safety of the vessel could be compromised or when a safety incident is imminent," the notice said. "The Panama Maritime Authority may sanction violations of such provisions in accordance with national legislation, if they do not formally report through LRIT and AIS to our administration at the appropriate time." The authority said the Bahamas-flagged vessel Galaxy Trader had operated without its AIS for 24 hours, traveling 250 nautical miles through the region, before being attacked by Houthis anyway. For vessels continuing to transit through the region, recommendations by the authority include traveling by night to avoid detection and installing searchlights to scan for the small vessels that likely act as spotters, the appearance of which have preceded Houthi missile attacks . But traveling by night comes with another risk. "At night, small and slow boats without a wake are difficult to detect on radar," the authority warned. "Don't stop if threatened and present a challenging target through proactive maneuvers." The Panamanian flag is flown by the plurality of flagged ships in operation at 17pc of the global fleet, represented by over 8,000 vessels, according to the state-owned Panama Ship Registry. By Ross Griffith Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

'Huge demand' ahead of carbon exchange: Australia’s CER


02/23/24
News
02/23/24

'Huge demand' ahead of carbon exchange: Australia’s CER

Sydney, 23 February (Argus) — Demand for Australian carbon credits and renewable energy certificates is expected to continue increasing rapidly over the coming years, including voluntary markets, officials at the country's Clean Energy Regulator (CER) said today as they unveiled details about the planned Australian Carbon Exchange. Cancellations of Australian Carbon Credit Units (ACCUs) are estimated to have reached around 1mn in 2023 in the voluntary market, a new high and up from approximately 855,000 in 2022, while those for large-scale generation certificates (LGCs) rose to an estimated 4.9mn last year from 3.4mn the previous year, CER's general manager Jane Wardlaw said during a webinar organised by the Australia-based industry group Carbon Market Institute. While most of the demand for both products comes from compliance obligations under Australia's Renewable Energy Target and Emission Reduction Fund, including the revamped Safeguard Mechanism , companies can also make cancellations against voluntary certification programmes such as the federal government-backed Climate Active or under organisational emissions or energy targets. The CER is expecting "huge demand" in the voluntary market stemming from Australia's planned stricter mandatory emissions reporting , especially for LGCs, executive general manager Mark Williamson said on 23 February. Demand for ACCUs in the compliance market has been already increasing on the back of new safeguard obligations starting from the July 2023-June 2024 financial year, Wardlaw said. The regulator has been working closely with the Australian Securities Exchange (ASX) and technology solutions provider Trovio Group on its planned Australian Carbon Exchange . Trovio as a first step is developing a new registry for the Australian National Registry of Emissions Units, which is expected to come on line in the second half of 2024, with the exchange itself set to be launched between the end of 2024 and early 2025. "We think it's time to move to an exchange-based market where participants can trade anonymously," CER chair David Parker said, noting the buying side of the market has become much more diversified in recent years. "That's not intended to lock out the over-the-counter [OTC] arrangements," Parker said, adding the regulator hopes OTC trades will be cleared on the exchange. Companies that operate existing trading platforms will be able to connect their systems to the new registry. But the CER will require them to "release some data transparency" such as volumes and prices, Wardlaw said. New options The registry and exchange will incorporate other existing certificates like LGCs and small-scale technology certificates, as well as new ones such as the proposed guarantees of origin for hydrogen and renewable electricity . It will also include the new Safeguard Mechanism credit units (SMCs), which will be issued by the government to facilities that reduce their emissions below their baselines. The CER plans to publish information about which facilities are issued SMCs. While the exchange works with the CER on the new spot exchange, ASX's senior manager of issuer services Karen Webb said it is developing its own separate carbon futures contracts, which it is planning to launch in July 2024. The physically settled contracts will consist of ACCUs, LGCs and New Zealand units, for delivery up to five years ahead. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Canal disruptions spur fast steaming: UN


02/22/24
News
02/22/24

Canal disruptions spur fast steaming: UN

New York, 22 February (Argus) — Ship operators are increasingly speeding up their vessels to offset the lengthier voyages around the Cape of Good Hope necessary to avoid the conflict-afflicted Suez Canal and drought-plagued Panama Canal, according to a UN Conference on Trade and Development (UNCTAD) report published today. "The disruption in the Red Sea and Suez Canal, combined with factors linked to the Panama Canal and the Black Sea and leading to rerouting vessels through longer routes are causing vessel sailing speeds to increase," the UNCTAD said. "This is a means for ship operators to ensure schedule integrity and manage the fleet capacity." The jump in steaming speeds is a departure from record slow steaming speeds hit last year among the dry bulker segment as shipowners attempted to reduce emissions per the International Maritime Organization's (IMO) new environmental regulations, which kicked off in 2023. "An increase from 14 to 16 knots would increase ship (fuel oil) consumption per mile by 31pc," the UNCTAD said. "These trends could erode the environmental gains that had been achieved through slow steaming." The Argus -assessed carbon cost of freight (CCF), which ship operators have to pay to comply with the EU ETS, of a 65,000 dwt long range (LR1) refined products tanker traveling from Ras Tanura in the Middle East to Rotterdam was at 46¢/t on Wednesday, assuming a Suez Canal transit under nominal conditions, for a lumpsum of $30,223. The same fee to shipowners could hit as high as 96¢/t, or $62,129 lumpsum, assuming a 31pc increase in consumption from a two-knot increase in speed alongside the additional two weeks of travel time to avoid the Suez Canal around the Cape of Good Hope. Traders shift to rail Some traders looking to move commodities between the Atlantic and Pacific basins are adjusting their focus away from seaborne routing altogether, with rail traffic jumping in the US since the start of the year because of the rising danger near the Suez Canal and the ongoing drought restrictions at the Panama Canal, according to the UNCTAD. "In the United States, demand for rail transport services has surged as a result in recent weeks, as shippers no longer have the option of going through the Suez Canal as an alternative to the Panama Canal," the UNCTAD said. "The land bridge, which connects the ports of Los Angeles and Long Beach in the United States by rail with the wider North American hinterland, is the other main competitor for the Panama Canal." The move mirrors major container shipping giant Maersk, long a preferred client of the Panama Canal because of the large amount of traffic it pushed through the waterway, choosing earlier this year to halt many Panama Canal transits in favor of discharging two separate vessels on either side of Panama and swapping their cargoes by rail instead. West coast South America countries like Chile, Peru and Ecuador funnel 22pc, 22pc and 26pc of their total foreign trade volumes through the Panama Canal, according to the UNCTAD, and buyers in these countries of refined oil products like diesel and gasoline sourced from the US Gulf coast will need to continue to vie for booking slots at the Panama Canal in the absence of a rail connection. Those without slots will need to win auctions, which jumped above $500,000 lumpsum in early February per Argus assessments for the medium range (MR) tankers utilizing the Panamax locks, to secure passage. By Ross Griffith Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Single entity scrapped from EMD reform: Epex Spot


02/22/24
News
02/22/24

Single entity scrapped from EMD reform: Epex Spot

Essen, 22 February (Argus) — The pan-European single legal entity (SLE) proposed by the European Commission will not be included in the final electricity market design (EMD) reform, Paris-based power exchange Epex Spot representatives told Argus . "From what we have seen, in the final version of the text, the reference to 'single entity' has been completely taken out from the relevant articles in the European electricity directive," Epex Spot said at the sidelines of the E-world conference in Essen. In the text seen by Epex Spot, the SLE has been replaced by "different governance options", although the exchange has no information on the concrete meaning of that concept. "That wording is the result of diplomatic negotiations and has on purpose remained broad," Epex Spot said. The exchange, together with other nominated electricity market operators, convinced the European Parliament to adopt amendments against the SLE in July, and wrote a joint letter with power exchange Nordpool in November , arguing that the new entity could increase operational risks and would not be able to support local requirements for market coupling. In addition, the exchange representatives told Argus that Epex Spot's pipeline of projects was already long. The vote on the European market design is expected to take place next month. By Tatiana Serova Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.