At its January 20, 2016, Planning Advisory Committee meeting, Midcontinent Independent System Operator, Inc. (MISO) released the latest results of its near-term Clean Power Plan analysis. The results expand on MISO’s initial findings, unveiled in December 2015.
In its most recent round of modeling, MISO compares mass-based and rate-based compliance plans and assumes states adopt a trading-ready approach under each. MISO did not consider or examine implications for transmission or gas infrastructure in this set of projections.
On the regional level, MISO found that mass-based compliance will be considerably cheaper than rate-based compliance, with rate-based production costs exceeding $16 billion in 2030, compared to production costs of approximately $5 billion under a mass-based plan. Under a rate-based approach, MISO projects that the cost of emitting carbon dioxide could top $140 per short ton by 2030, compared to just $40 per short ton that same year under a mass-based approach.
Although it found that early compliance targets could be met through renewable portfolio standards and coal to gas re-dispatch, MISO notes that comprehensive planning is needed immediately in order to meet increasingly stringent compliance targets in the mid-2020s. New, non-carbon-dioxide-emitting resources, MISO predicts, will be needed to keep carbon prices down over the long term. Although modeling indicated that under a rate-based approach early deployment of renewable resources would drive down initial carbon prices, additional renewable build-out will be needed to sustain those savings. MISO’s findings also indicate that coal retirements will have a greater impact on carbon prices under mass-based compliance schemes.
MISO’s most recent analysis also took stock of the effect the CPP will have on coal-fired generation. According to MISO’s projections coal generation faces less risk of reduced dispatch under mass-based compliance plans, with coal units running more in the near term under rate-based compliance, and more in the long term under mass-based compliance.