Monday, October 15, 2018

New Midwest Infrastructure Must Respect Trends, Experts Say

By Amanda Durish Cook

KANSAS CITY, Mo. — While Midwestern grid planners aren’t certain about the future of energy infrastructure, they do agree that planning must yield to a convergence of trends, including low-cost renewables, energy storage, escalating cyberattacks, flat demand and legacy generation verging on the antique.

The Missouri Energy Initiative had the first event in their MidWest Energy Policy Series on April 10, focusing on infrastructure. | © RTO Insider

Those trends will dictate the direction of new buildouts, according to industry experts speaking Tuesday on a infrastructure panel as part of the Midwest Energy Policy Series hosted by the Missouri Energy Initiative.

Trends

Hall | © RTO Insider

Missouri Public Service Commission Chairman Daniel Hall said new infrastructure placement must take into account a blend of national trends, including declining wind and solar costs, the natural gas fracking boom, aging power plants and transmission lines, and declining demand for electricity due to household energy efficiency and the country’s downsized manufacturing sector.

“Most distribution lines were constructed in the 1950s and 1960s, and they were expected to last 50 years,” Hall said.

Many utilities are planning utility-scale renewable projects, he said, pointing out that Ameren has requested a certificate of convenience and necessity for a 700-MW wind farm by 2020.

“If completed, that would account for almost 10% of Ameren’s power generation,” Hall said.

While renewables could fill in for aging baseload generation, RTO planners questioned whether the demand-light Midwest needs an abundance of new generation development. Other panelists agreed that years of 3% annual load growth are a thing of the past.

SPP Manager of Transmission Services Charles Cates said SPP’s queue holds 70 GW of generation, which, if built, would exceed the RTO’s current peak loads.

David Van Beek, MISO external affairs manager, said his RTO is still experiencing a “drastic generation shift” toward renewables even with the uncertainty surrounding the Clean Power Plan. He noted that solar projects account for one-third of MISO’s record-setting 90-GW-plus generation interconnection queue.

The Promise of Storage

Even with the addition of all that proposed generation, panelists said storage projects could facilitate local consumption of the output, precluding the need for the new transmission lines planned for in the past.

Midwest Energy Policy Series Energy Infrastructure

Lohrbach | © RTO Insider

Jay Lohrbach, manager of generation projects for City Utilities of Springfield, Mo., said a joint 1-MW battery storage project between his utility and NorthStar Battery at the Cox substation will likely defer the need to build transmission infrastructure in that area.

Lohrbach said that by the end of 2019, the utility will be supplying the city with 40% renewable power.

“This is Springfield, Mo., not California,” Lohrbach reminded the audience. “That’s amazing.”

Lohrbach said utilities are in the unenviable position of balancing when to retire uneconomic and slow baseload coal and nuclear units with a duty to provide capacity. “The bar has been placed pretty high in how efficient we have to be,” he said. “It’s a tough situation economically for utilities.”

He said NorthStar’s batteries can be designed exclusively to manage small spikes of demand, catering to a country with otherwise flatlining loads.

“Battery storage can scale down to the size of your house pretty readily,” Lohrbach said. He added that storage batteries have no fixed costs, only upfront construction costs and fairly well-defined variable costs.

“It’s pretty easy to decide when to discharge the battery,” Lohrbach said. “And if I don’t deploy it, it can just sit there and not cost me anything. It’s a completely different economic model than anything we’ve seen before, and we need to wrap our heads around it.”

Lohrbach said RTO transmission planners aren’t yet planning for the full impact of storage developments.

In response to an audience member’s question about the prospect of planning transmission explicitly to accommodate energy storage in the wake of FERC’s Order 841, Van Beek said the order was too new to shape transmission planning. Both this year and last, MISO incorporated a fourth future scenario into its transmission planning process as distributed and emerging technologies become more widely used. (See MISO to Recycle Tx Planning Scenarios for 2019.)

Chris Neaville, asset development director of St. Louis-based mining company Doe Run, said large industrial consumers also want storage projects.

“We think the future for us is really developing our own microgrid,” Neaville said.

Doe Run envisions a microgrid that could shave its peak loads through 21 to 50 MW of behind-the-meter, onsite solar power and up to 16 MW of battery storage, which could also serve as back-up generation for its mines’ critical systems.

“We could become interruptible load,” Neaville added.

He said electricity is Doe Run’s single biggest operating cost at about $23 million annually, and that 1960s-era transmission lines deliver power to its remotely situated mines.

Neaville said he’s worried that Ameren is currently being granted about 5% rate increases about every 18 months, with each hike subtracting about $2 million to $3 million from the company’s bottom line.

“Our concern for the future is that if it continues at that rate, it’s not sustainable,” Neaville said. “There’s a break point where we have to do something differently. We can’t keep increasing these rates.”

Doe Run would prefer not to build its own generation, Neaville said, so the company hopes to partner with a utility on a microgrid project.

Grain Belt Express

Discussion veered to Clean Line Energy Partners’ embattled, high-voltage Grain Belt Express transmission project, whose fate is now in the hands of the Missouri Supreme Court. The stalled $2.3 billion, 780-mile line was designed to transmit Kansas wind generation to the western border of Indiana after crossing Missouri and Illinois.

Hall said that although the Missouri PSC found the project worthy, its hands were tied in denying the application because the Caldwell County Commission refused consent for the transmission line to cross public roads.

He said the commission was bound to follow the Western District Court of Appeals’ decision that the certificate could not be lawfully granted without county approval.

“That is essentially a road map for county commissioners to focus on their voters. … It doesn’t make sense from my perspective that you’ve got county commissioners that can decide the fate of interstate transmission lines,” Hall said.

Clean Line’s situation highlights the need to either change state law or have the federal government supersede state jurisdiction, he said.

“Hopefully, the [Missouri] Supreme Court will get it right.”

Hall also hopes the court’s opinion “would not say that the PSC erred” in denying the certificate, as the commission was legally bound to issuing a denial.

MISO-SPP Interregional Projects

Van Beek | © RTO Insider

Van Beek and Cates discussed whether their RTOs would approve a first-ever interregional project along their seam, especially near Kansas and Missouri. Both agreed their two-year joint modeling process can sometimes delay project approval.

“It’s a really tedious process,” Van Beek said.

Cates | © RTO Insider

“The time frame of modeling is quite extensive,” said Cates, adding that while the RTOs’ can usually agree about what areas need a transmission project, they can get stuck on how to divide costs. MISO and SPP staff have recently suggested abandoning their joint model in favor of more closely aligned regional models. (See MISO, SPP Look to Ease Interregional Project Criteria.) The two RTOs plan to wait a year before embarking on another joint study in hopes of improving their process to gain approval for an interregional transmission project.

ITC Holdings’ Chris Winland said his company wants to be on the “cutting edge” of planning transmission infrastructure for future wind developments in Kansas and Oklahoma. He said those areas are home to the “best wind in the country” and predicted more development.

Cybersecurity

Heger | © RTO Insider

Whatever infrastructure is built, it needs to withstand increasingly sophisticated cyberattacks, said Ameren Chief Information Officer Mary Heger.

Ameren uses a combination of systems monitoring, virus scanning, network segmentation, quarantine programs for suspect email and “whitelisting” — which authorizes which applications are allowed to run, thereby excluding all other programs, she said.

“The program we put in place is designed to protect us against a broad scope of actors.”

Heger said Ameren also has an in-house training program called Cybersafe, where the utility will test employees by sending simulated phishing emails — the kind of which that set in motion the 2015 cybersecurity attack on Ukraine’s grid.

“People really are one of the weakest links,” Heger said.

“As long as people click on links … that will be a very popular way to get a foot in the door,” said Galen Rasche, Electric Power Research Institute senior program manager.

Rasche said a more mobile utility workforce, dynamic supply and demand balancing, increasing automation of operations, customer self-generation and home energy management programs all create more opportunities for cyberattacks.

He said an integrated — or “multiparty” — grid, in which generation and storage assets are not necessarily owned and operated by utilities but are aggregated by a third party, presents a more complex security challenge. He predicted that some aggregation vendors will go out of business within five years and asked what will happen to their data after they fold.

“Cybersecurity now can’t be the sole responsibility of the utility,” he said. “We need to make sure we’re having this conversation with everyone in the room.”

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