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Market Intel

MISO

MISO

Market Overview

The Midcontinent Independent System Operator (MISO), operates the competitive wholesale electricity market spanning 15 U.S. states and Manitoba,  supporting one of the largest transmission footprints in North America.

MISO is a relatively new market, developed within the last 10 years, and is still working though an operating structure that will allow for energy storage resources (ESRs) to participate while recognizing their unique characteristics. The ISO has acknowledged the need to enhance market constructs and accreditation models to ensure ESRs are properly incentivized, and have a number of studies underway or on the docket to evolve the market accordingly.

  • 9GW

    Load growth expected by 2029

  • 138GW

    Peak demand could hit 138GW

  • 75%

    of the region’s load is served by utilities with decarbonization and/or renewable energy goals

Overall, MISO is a nascent market for energy storage. But given the shifting generation mix, emerging state-level programs, and underlying need for flexibility – there may be opportunities emerging. 

An evolving market

MISO’s energy market is undergoing a critical transformation to address shifting reliability concerns, and growing renewable energy goals. All indicate there may be great additional value for storage assets, but are still in development and subject to change.

  • Reliability Concerns

    All market outlooks reveal significant capacity shortfalls on the horizon. In addition to electrification, regions are seeing an influx of new manufacturing projects especially in Illinois, Indiana, and Michigan drive up energy demand. 

    • 2.1 GW occurring as soon as 2025
    • 4.7 GW shortfall beginning in 2028 if currently expected generator retirements actually occur – even with the 12-plus GW of new resources that are expected to come online

  • Renewable Energy Goals

    Under MISO modeling scenario
    Future 2A, which reflects all the clean-energy
    goals that utilities and states have
    publicly announced:

  • Market Model Evolution

    To better accommodate ESRs and other emerging technologies, MISO is working to refine its market structure:

    • Accreditation Model for ESRs: The ISO recognizes the need for an accreditation model tailored to storage assets’ unique characteristics.
    • Look-Ahead Dispatch: A potential new dispatch and commitment model would optimize resource usage by considering future system conditions, enhancing efficiency and reducing costs.

Market Products

MISO operates several markets and strives to ensure reliable energy delivery. 

  • Energy

    Bidding into energy products can see high returns from energy arbitrage, and provides flexibility to lock in returns through the Day-Ahead Energy Market, or capture sudden price spikes in the Real-Time Energy Market. 

  • Ancillary Services (AS)

    This almost acts as offering insurance to the grid. You will get a payment for holding capacity, or offering to scale down generation, in moments where there is a mismatch between supply and demand. Bidding into AS can yield consistent returns, and still deliver high revenue during scarcity events.

  • Day ahead (DA)

    Offer energy into the market for next-day delivery.

    Energy

  • Real time (RT)

    React to market fluctuations during the operating day.

    Energy

  • Regulation (Symmetric)

    Balance supply and demand in real time by providing both upward and downward adjustments.

    Ancillary Services

  • Spinning Reserves

    Fast-start backup resources online and ready to respond.

    Ancillary Services

  • Non-Spinning Reserves

    Offline resources that can respond within minutes.

    Ancillary Services

Seasonal Capacity Market
Ensures sufficient resources are available during summer and winter peaks, with ESRs playing a growing role in addressing capacity shortages.

Active initiatives:

  • Scarcity pricing: MISO has refined its Operating Reserve Demand Curve (ORDC) with an updated Value of Lost Load (VOLL) set at $35,000/MWh. This adjustment increases the price cap to $6,000/MWh to better reflect scarcity conditions, incentivizing more flexible resources like energy storage to participate
  • Uncertainty product: Remains a concept but is under consideration by MISO.  

Storage Opportunities

There is opportunity today for savvy storage operators, and generation owners able to add batteries to existing facilities. This opportunity only stands to grow in the coming years as MISO evolves the market.

  • Increasing volatility

    Increasing demand plus the shift to more renewable generation sources, which are inherently intermittent, will increase volatility and create more arbitrage opportunities for storage resources.

  • Supplementing Generation Assets

    Solar and wind contribution in MISO has been increasing faster than most realize. In fact, the solar product record increased 150% year-over-year. Renewables also comprise the majority of the interconnection queue. Companies will need storage to ensure reliable energy delivery and project revenue.

    In addition to capturing high prices that generally coincide with time periods when renewable generation is low, in MISO, intermittent resources are not allowed to participate in AS, so storage unlocks new project revenue streams.

  • Relieve Congestion

    Strategically place batteries near areas of high congestion to capture energy when supply is greater than connection capacity, and deliver it to the grid later, once generation tapers off.

State-Level Incentives and Procurement Targets

In addition to federal regulations and regional market rules, state-level policies play an important role in shaping the deployment and operation of energy storage in MISO.

  • Renewable Energy Target:
    100% by 2040

    Storage Procurement Target:
    2.5GW by 2029

  • Renewable Energy Target:
    100% by 2050

    Storage Targets: 

    • All utilities services 200K+ customers by 2032
    • 7.5GW utility-scale and 1GW distributed (pending)

  • Renewable Energy Target:
    100% by 2040

Path to Go-Live

  • Interconnection Process

    Green tick icon

    Submit an interconnection request, then progress through the three phases of the Definitive Planning Phase (DPP). 

    • System Impact Studies (SIS)
    • Facility Studies 
    • Generator Interconnection Agreement (GIA) 

  • Market Registration

    Green tick icon

    ESRs must register with MISO as a market participant. This includes providing information about the asset’s capabilities, such as its ability to participate in energy, ancillary services, and capacity markets. Testing may be required to validate these capabilities.

  • Testing

    Green tick icon

    MISO may require operational tests to confirm that the asset responds appropriately to dispatch signals and adheres to grid reliability standards. Testing includes performance during system constraints and compliance with market dispatch orders.

  • Hone Bidding Strategy

    Green tick icon

    Ahead of operation, asset operators refine bidding strategies to align with MISO’s real-time (RT) and day-ahead (DA) markets. This includes participation in energy and ancillary service markets such as regulation and reserves​.

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