Some fascinating scorching-afternoon reading can be found at the Midwest Independent Transmission System Operator website. (MISO is …”an essential link in the safe, cost-effective delivery of electric power across much of North America. The Midwest ISO is committed to reliability, the nondiscriminatory operation of the bulk power transmission system, and to working with all stakeholders to create cost-effective and innovative solutions for our changing industry.”) This isn’t typical summer reading fare, but’s intriguing nonetheless.

From the site: “Locational Marginal Pricing, or LMP, provides price transparency for users of the wholesale bulk electric system. The price signals provided by LMP indicate the cost of conducting business based on current system conditions. LMP consists of three components – energy price (EC), congestion (MCC), and losses (MLC).” To translate this into English, LMP is the marginal cost of electricity on the spot market. When demand skyrockets on a day like today, the marginal price of electricity skyrockets. Xcel Energy, for example, needs to buy very expensive power from natural gas-fired peaking plants.

Currently, as we are at or near record system electricity demand, the Minnesota Hub electricity price is a staggering $346.42/MW, or $0.34642/kWh. Carleton College is currently selling electricity produced by its wind turbine

(Photo: Robb Long, AP)

to Xcel Energy at 1/10 this amount ($0.033/kWh), yet gets no capacity payment. At this time next summer, I expect to have a PV system on my roof that should cover most or all of my demand, even at peak demand times such as this, yet if I sell back to Xcel, I would receive only the retail rate, roughly 1/4 the amount they are paying for peaking capacity right now.

Capacity is not factored into power purchase agreements for wind projects such as Carleton’s, nor is it factored into the payment that small distributed PV systems receive for electricity sent into the grid. This is just one of the many ways in which the supposedly level playing field is tilted against renewables and distributed, geographically dispersed electricity generation.

I expect to post a blog soon on how much Carleton’s turbine has contributed to meeting local power needs on today’s record demand day. This will not be any kind of comprehensive analysis, just anecdotal evidence that supports recent research that indicates that wind can help significantly in meeting peak summer demand.

Given the ability to forecast system-wide demand, the ability to forecast solar and wind resource availability and thus wind and solar power production, there is no excuse for not including some provision for capacity value for wind and PV systems. It’s way beyond time that we aggressively update the electrical utility system with the clean renewable energy technologies that benefit the environment and the economy, and recognize and compensate renewable energy facilities, both large and small, equitably.