A wave of coal retirements and higher natural gas prices will drive more than 73GW of new onshore wind and 13GW of utility-scale solar build over the next decade for Midcontinent Independent System Operator (MISO), which manages the second-largest US electric power market, according to S&P Global Market Intelligence.
By 2031, MISO’s service territory across 15 states and the Canadian province of Manitoba will have about 100GW of installed wind and 15.4GW of utility solar, the analytics firm said in a research note.
By comparison, the US had 135GW of onshore wind installations at the end of 2021 with MISO comprising about 27GW,
While MISO’s present onshore wind pipeline is only 60% of installations, it appears poised to be the biggest US growth market over the next decade for onshore wind of the seven US independent system and regional transmission operators.
That growth, however, will be uneven with much of it in midwestern states such as Illinois, Indiana, and Michigan, not so much in southern ones including Arkansas, Louisiana, and Mississippi. Even so, it offers a bright spot for the industry with installations slowing in some other parts of the country.
“Wind is the heavily favoured renewable option across MISO to replace outgoing coal power,” said Adam Wilson, who wrote the report, referring to onshore wind versus solar. “Wind’s higher capacity factors and ability to produce during all hours of the day make it better suited to replace dispatchable resources, such as coal and natural gas.”
More than 27GW of coal-fired power plant capacity will retire later this decade with 20GW in five states: Illinois, Indiana, Michigan, Minnesota, and Wisconsin. This will lead to tight reserve margins as load forecasts increase.
Historically, MISO has been slower to retire coal plants than some other US electric system balancing authorities.
MISO’s ability to achieve ambitious renewables utility build will partly depend on how well it can facilitate interconnection of new and upgraded projects, and ramp electricity exports to power markets in the eastern and southern US.
This will require badly needed interconnection queue process reforms and better cooperation with neighbouring balancing authorities such as ERCOT in Texas and PJM Interconnection.
Turning to utility solar, the report said about 18.2GW is now in the development pipeline, a significant jump from several years ago and more than five times the installed base in MISO. Indiana leads the way with more than 5GW of planned solar, with Illinois, Michigan, and Wisconsin all having at least 2GW in development.
MISO’s forecast 13GW of utility build through 2031 is more solar capacity at scale than any US balancing authority presently except California Independent System Operator (CAISO).
S&P Market Intelligence said its wind and solar outlook does not reflect recent signals of higher renewables prices due to supply chain constraints and trade concerns “which will almost certainly hinder the aggressive wind and solar developments reflected in the pipeline across MISO.”
Should these hurdles persist, it is possible that some projects get delayed and coal retirements are pushed back.
“Economic and legislative forces, however, are expected to be strong enough to weather this storm and maintain a steady flow of new renewable investment,” wrote Wilson.