RASC: Hybrid Accreditation Proposal (RASC010) (20210414)

Hybrid Resource Accreditation Draft1

1. General comments
   1.  We appreciate the opportunity to comment on the MISO hybrid accreditation (RASC010)
   2. The two-phase approach based on the need to get a methodology established in a timely manner with the expected implementation of actual installations later in 2021.  The first phase of the hybrid accreditation using a generic approach because of the lack of operational data is also a commendable approach to allow a timely means of establishing the accreditation before operational data is available.
   3. Comment on the issue of dispatching the storage facility
      1. There is a significant difference in the value of a storage installation if MISO could utilize the storage facility to be dispatched, or if the decision on energy storage dispatch would be made by the owner/operator of the hybrid installation. 
      2. The accreditation methodology of the wind and solar resources are defined individually, but the addition of the storage to a facility making it a hybrid resource adds the uncertainty on how the storage resource is being dispatched.
      3. The dispatch of the resource will certainly be impacted by the full range of energy market, ancillary market and any scarcity pricing revenues and these market prices may or may not be aligned with the resulting accreditation methodology for hours that provide a higher level of accredited capacity value for the hybrid resource. 
      4. Comments on the First Phase
         1. The main concern about the defined approach for the first phase of accreditation is based on the expectation that the approach should align with all MISO resource interconnection policies.  It is our understanding that current interconnection policies don’t have any combinations of resource accreditation and utilization of an interconnection where the energy dispatch value would ever be higher than the NRIS.  The first phase is not clear in the example given on slide 5 how a NRIS value of 100 MW would dispatch a hybrid for 100 MW of solar and 20 MW of energy storage.  The concern is focusing on hours where the output of these individual resources would be higher than 100 MW, and how this dispatch of the resource would be handled.  If there is assurance that the total dispatch of the hybrid installation would be limited to the NRIS value. 
         2. Comments on the Second Phase
            1. The second phase of the defined proposal is based on actual operations data to establish the accredited value of the hybrid installation. 
            2. A concern on this approach is that the accreditation values would be expected to change over time depending how the storage resource is dispatched. 
            3. Two examples of dispatching a hybrid approach can be used to show the importance in defining the dispatch methodology:

                                                    i.     Maximize the total hybrid facility output during targeted peak hours within the maximum interconnection limits.

                                                   ii.     Maximize the number of hours of hybrid facility output by increasing the storage dispatch when the dispatch of intermittent resource(s) decreases.  This could either be additional hours after the expected decrease of intermittent resource (more common with solar generation – seeking to fill in the duck curve).

1. If the energy storage dispatch decision is being made by the owner/operator, the method of dispatching the resource should be defined to allow more certainty on how the resource could be valued in future years once the actual dispatch values are available for the accreditation method. 

These comments are being provide with the knowledge that the proposed hybrid methodology is a near-term solution under the current annual construct and in the future more robust enhancements will be evaluated as part of the sub-annual method. Minnesota Power looks forward to working with stakeholders and MISO on identifying a longer-term solution.

With this being a short-term solution Minnesota Power is supportive of a two-phase approach, although have concerns with the methodology proposed by MISO. Minnesota Power is supportive of the Phase II methodology as proposed, but have concerns with the Phase I methodology.

Based on the example on slide 5, our main concern is the total NRIS value doesn’t align with the NRIS required to achieve the total accredited capacity value. In theory, the accredited capacity value is based on these two technologies operating separately and without any constraint on NRIS. This methodology likely overstates the accredited capacity value until the first year of summer operational data is available. Minnesota Power recommends that the NRIS limit be more realistically reflected in the accredited capacity value for Phase 1. A solution for MISO to consider is to use a pro rata share of the nameplate capacity based on total NRIS available. Below is an example on how a pro rata share could be applied based on the example is slide 5:

Project A Nameplate: Solar 100 MW * NRIS 100 MW / Total Nameplate 120 MW = Adjusted Solar Nameplate 83.3 MW

Project B Nameplate: Battery 20 MW * NRIS 100 MW / Total Nameplate 120 MW = Adjusted battery Nameplate 16.7 MW

Total nameplate is 100 MW and results in a total capacity credit of 57.5 MW (41.7 MW Solar + 15.8 MW Battery)

As a near term solution, Minnesota Power recommends using an pro rata share of the name plate capacity based on the total NRIS. It will more accurately reflect the capacity value until summer operational data is available.

Minnesota Power appreciates the opportunity to comment on the MISO hybrid accreditation.

WEC Energy Group is concerned that MISO’s proposed two-phase accreditation approach for Hybrid Resources could undervalue the capacity of a non-intermittent component of a Hybrid Resource.  Once summer performance data is available, MISO proposes to accredit the capacity of a Hybrid Resource based on 3-year average summer performance data for the hours ending 15, 16 and 17.  Using the example of a hybrid consisting of solar PV and BESS, we note that that battery component could be fully or partially charged and available but not dispatched.  The accreditation of a hybrid resource that contains a non-intermittent component needs to recognize the availability of that component independent of its actual dispatch.  Slide 4 of the presentation delivered to the April 14 RASC includes a statement indicating that this is the intent but to our recollection, the discussion during the meeting didn’t highlight that statement.  Using the example in the presentation of a 100 MW NRIS hybrid consisting of 100 MW solar PV and 20 MW battery, our expectation is that if the historical performance data of the solar yielded a capacity accreditation of 60 MW and the battery was fully charged and available during the same historical performance hours, the total accreditation of the hybrid resource would be 80 MW.  If the battery’s average historical availability during the performance hours was only 10 MW, the total accreditation would be 70 MW.

Hybrid Accreditation Proposal

Clean Grid Alliance appreciates the opportunity to provide further input on MISO’s April 14^th proposal for accreditation of Hybrid resources.  In general, we think the most recent proposal is an improvement over the last proposal.  The two phase approach offers a simple and reasonable approach for new generators and can provide a way to assess hybrid resource accreditation more accurately when historic generation data is available. Yet, a few more modifications to how historic generation data is used would offer a sounder approach to the second phase of accreditation.  We also appreciate that the April presentation on this topic also considers that additional refinements may come over time as MISO and its stakeholders have more experience with hybrid resources and the many ways they may be operated.

MISO proposes for the second phase that generator performance data will be used to determine accreditation.  We agree that this may be helpful in recognizing that hybrid resource output will be optimized by the market participants.  But when determining the level of generation for hybrid resources, using output during net peak load hours rather than hours ending 15, 16, 17 during summer months would be more appropriate.  These summer hours do not necessarily represent the hours with the highest risk of loss of load.  Considering net peak hours would be more similar to the approach that MISO uses to evaluate the UCAP value for individual wind resources based on their output during the 8 peak hours of the year.

Further, there should be some consideration of the fact that peak load hours do not necessarily mean that all generators in a hybrid will be operating, though they may be available.  Is it possible to consider whether dispatchable generation in a hybrid, such as energy storage or gas, is available during a peak hour or net peak hour rather than whether they are actually generating?  Just because an hour has high load does not necessarily mean that it has a high loss of load risk or high LMPs.  Thus, dispatchable generators may be available but may not be economically dispatched during those hours.

Accreditation for Surplus Generators

In its April presentation, MISO indicated that it does not intend to include surplus generators in this proposal for accreditation.  First, we ask MISO to provide more detail on its justification for not treating Surplus generators the same as hybrid generators.  And we would like to see a presentation describing how MISO believes the existing tariff and BMP require surplus accreditation to be treated.  We recognize that similar to hybrid resources, multiple generators at a surplus interconnection site can have a variety of contracts that describe how the two or more generators will operate and share the interconnection capacity.  These resources could choose to be operated as a typical optimized hybrid rather than independently as collocated resources, so the hybrid accreditation methodology should at least be an option for surplus resources if their contracts and energy displacement agreements are defined such that their operation is akin to a hybrid.  If the individual generators at a surplus site are to be accredited separately, it should be left to the parties in that agreement to determine how they want to share any firm transmission service between those resources for use in accreditation.

Xcel Energy is appreciative of MISO's willingness to adapt their proposal regarding capacity accreditation for hybrid resources based on stakeholder feedback.   We are supportive of the current proposal for a near-term methodology that distinguishes between a new hybrid and a hybrid with performance data.  In addition, we understand that a long-term approach will be developed as more experience with the hybrid resources and more robust capacity accreditation tools, such as updates to solar accreditation, are developed.

The only concern we had for the near-term proposal is the use of static hours (HE 15, 16 and 17) for the performance data.  We recommend that the net peak load hours are more appropriate to use as the basis for capacity accreditation for hybrid resources.  This would increase the probability that a hybrid resource would be dispatched during an hour used for capacity accreditation since they are more likely to be needed during net peak load hours.  However, MISO should consider that hybrid resource that are offered to the market but are not dispatched during a net peak load hour should not be penalized in their capacity accreditation.