Operating storage in MISO: maximizing value inside the rules

MISO is one of the fastest-growing storage markets in the country, and its rules are still being written for batteries. Following them is one job. Operating well inside them – so the asset remains compliant, while maximizing the value it was built to create for its owner and the grid – is another.

We put together a guide breaking down this complexity, and how storage operators can maximize the value of their asset while maintaining compliance. 

Key takeaways

• MISO’s market rules were built for plants that burn fuel to produce energy on demand, at a knowable cost. A battery has a fixed amount of energy and opportunity cost based dispatch, so the same rules land very differently.
• Maximizing what a battery is worth, to its owner and to the grid, means understanding how MISO’s rules overlap. For example, resource adequacy and capacity accreditation shape what you bid day-ahead and how much energy you hold. IMM reference levels limit how you can express opportunity cost to the market. The must-offer obligation dictates when you have to offer, on a window set the day before. And once the day is underway, MISO’s clearing engine and bid lockout limit how much you can change.
• None of these is especially hard to follow on its own, but the difficulty is that they apply at the same time, and satisfying one can put you offside another.
• Operators without a handle on these overlapping rules tend to fall into one of two traps: they bid conservatively to protect capacity value and leave energy revenue behind, or they get dispatched in ways they didn’t plan for and lose money outright. Both leave value on the table, for the owner and for the grid.
• Getting it wrong costs twice. Once in today’s settlement, and again in the capacity value the asset carries for years.

What are MISO IMM reference levels for batteries?

Daily price benchmarks set by MISO’s Independent Market Monitor that establish a discharge floor and a charge cap for storage. They’re calculated per node from the prior seven days of prices, using the 75th percentile for discharge and the 25th for charge.

Does storage have a must-offer obligation in MISO?

Storage that clears as a Resource Adequacy resource takes on a Must-Offer Obligation covering four consecutive hours centered on MISO’s forecasted daily peak, every day of the week.

How does MISO accredit battery storage?

On availability during MISO’s highest-risk hours, measured across the prior three planning years. MISO doesn’t prescribe how to manage state of charge to be available in those hours.

What makes operating a battery in MISO complex?

MISO’s markets were built for plants that burn fuel on demand at a knowable cost. A battery has a fixed amount of energy each day, and its real cost of discharging is the better hour it gives up. Several rules bind at once, so satisfying one can put you offside another.