Most MISO zones clear planning auction at $2.99/MW-day

Dive Brief:

Most zones in the Midcontinent ISO cleared a recent annual capacity auction at $2.99/MW-day, according to a report on the 2019/2020 Planning Resource Auction (PRA) results. Zone 7 (Michigan) cleared at $24.30/MW-day.
The grid operator concluded it has adequate resources to meet a Planning Reserve Margin Requirement of nearly 135,000 MW.
Gas-fired generation was the largest fuel type, representing 38% of cleared resources, followed by coal (35%) and nuclear (9%). Renewable resources clearing the PRA are growing, but remain modest.

Dive Insight:

The regional generation supply remained "consistent" with last year's resource adequacy survey, with only slight differences in the resources offered in the last two planning auctions, according to the auction report.

The Midcontinent grid operator saw 125,290 MW of generation offered into the 2019-2020 auction, with 119,779 clearing. Last year, generators offered 126,159 MW and cleared 120,855 MW.

The PRA "continues to allow our members opportunities to procure capacity and demonstrate that our region has adequate resources for the upcoming planning year,” Patrick Brown, MISO executive director of resource planning, said in a statement. "We appreciate the continued actions of states and Load Serving Entities to ensure that adequate resources are in place.”

This was the seventh annual planning auction.

Energy efficiency resources offered into the auction rose to 312 MW, from 173 MW. All of the efficiency resources cleared.

Renewable resources remain a small percentage of the capacity mix but they are growing. Solar made up 1% of the cleared resources, but grew to 680 MW this year from 461 MW in the 2018-2019 auction (a 47% increase). Cleared wind resources reached 2,698 MW this year, an increase of 21%, according to MISO.

MISO planning auctions tend to yield most zones clearing at the same price. Last year, all except Zone 1 cleared at $10/MW-day. During the 2017-2018 planning year auction, all local resource zones cleared at $1.50/MW per day.

MISO said that overall, this year's auction "featured lower offer prices from market participants in most of MISO." The auction also incorporated several process changes, including new requirements for load modifying resources and a new way of treating external capacity resources.

"The results also reflect the industry's ongoing shift away from coal-fired generation and increasing reliance on gas-fired resources and renewables," the ISO said.