Wind on the Wires1 - Smart Grid (R) Evolution: Electric Power Struggles - page 153

on the system - the wind “fuel” for turbine power production is free and wind power
producers receive the federal PTC - wind power fed into the system whenever the turbines
were spinning, and it was considered “self-scheduled” (MISO 2011 ) . In some areas, high
wind production created negative locational marginal prices, forcing other generators to
cease production or wind to be curtailed. In 2010, the variability of wind resources and
transmission capacity constraints forced more and more wind resources to be curtailed,
with4.2percentofallwind-generated electricity curtailed acrossMISOin2010(Wiserand
Bolinger 2013 ) . 2 When wind resources needed to be curtailed, someone from the utility
control room would call the wind operator and tell them to “dispatch down,” with the
system operator calling back sometimes hours later and allowing the wind plant back onto
the system. When wind curtailment occurred, wind operators and contracting utilities lost
money.
Integrating wind into electricity markets also posed challenges. Traditional generators
like coal or natural gas plants bid into day-ahead electricity markets, specifying how much
energy they can provide and at what price. These marginal cost curves are used by MISO
to estimate market clearing prices and then run security-constrained economic dispatch
models which schedule levels of electricity generation for the next day. When a scheduled
plant does not meet the scheduled expectations, it is penalized. However, the variability
of wind resources makes day-ahead predictions inaccurate. While wind forecasting has
improved tremendously - MISO uses weighted sums of three independent weather models
to predict wind - and wind resources are persistent in the short term, day-ahead predictions
of wind are not accurate enough for day-ahead markets. Thus, wind bidding into traditional
day-ahead energy markets would likely be penalized for not meeting its generation targets.
To better integrate variable wind resources into the electric grid, MISO developed
the Dispatchable Intermittent Resources (DIR) program. The DIR program combined
sophisticated weather models and turbine control systems to allow wind to participate in
electricity markets and projects to be automatically dispatched up or down, depending on
the system need. Before MISO developed the DIR, wind was not allowed to participate
in electricity markets, and the market change required FERC approval. In creating the
DIR, MISO used an extensive review process that included stakeholder engagement and
multiple subcommittees to define a new class of generators and change the transmission
tariff language.
When MISO filed its DIR tariff language to FERC in November 2010, stakeholders also
filed their concerns. Unlike the contentious battles over the MVP transmission lines above,
very few participants filed comments against the DIR. Rather, most of the filed comments
were from groups - many from the wind industry - which supported MISO's DIR program
changes. While FERC asked MISO for some minor DIR program clarifications, the