Xcel forges ahead with Sherco Solar, while MISO warns of electrical capacity deficit

The article below was written by Mark Kolbinger in the Patriot News.

Sizzling temperatures have one again forced area residents inside to the comfort of their air conditioners, while questions about the reliability of the electrical grid continue to garner headlines.

In an interview with the Patriot last week, Xcel energy representatives confirmed their intentions to install solar panels at the Sherco site. At the same time, the Mid-continent Independent System Operator (MISO) announced that electrical demand could outpace supply this summer in the Midwest.

The entire solar industry has experienced a great deal of uncertainty since late March, when the U.S. Department Of Commerce announced it was investigating claims from American based companies that competitors were sourcing solar panels and parts from southeastern Asian countries in direct violation of limits imposed on Chinese components.

According to Xcel Energy Media Relations Representative Lacey Nygard, the DOC investigation is a concern, but the Biden administration recently provided a boost for companies looking to source solar panels from overseas.

“The U.S. Department of Commerce’s (DOC) investigation has caused significant uncertainty in the solar panel market on top of existing supply chain and inflationary challenges,” Nygard stated.  “We are encouraged by the Biden administration’s announcement on June 6, 2022 to allow solar panels to be imported from Cambodia, Malaysia, Thailand and Vietnam for two years without retroactive tariffs, and think it will help restore some certainty to the market.”

Meanwhile, questions about the reliability of the electrical grid came into focus last week with MISO’s announcement that demand could outpace energy production in 2023.

According to its website, MISO is an independent, not-for-profit organization that is responsible for operating the power grid across 15 U.S. states (including MN), as well as the Canadian Province of Manitoba.  Forty-two million people depend on MISO for their power generation and transmission.

In a press release dated June 10, 2022, the group cited a recent survey about future electricity supply projections by noting that it “indicated tightening conditions, primarily in MISO North/Central subregions.”

In fact, for the summer of 2023, the report listed a potential capacity deficit of 2.6 Gigawatts (GW), a statistic that already accounted for the group having to transfer an additional 1.9 (GW) from other sources within MISO. Taken together, it would mean that the North/Central region would face a 4.5 GW deficit without transferring power from other sources.

According to Reuters, one GW can power about a million U.S. homes on an average day, but as few as 200,000 on a hot summer day.

The release went on to indicate “new capacity and/or deferred retirements may also be required to meet overall footprint requirements.”

However, a deeper dive into MISO’s projections show that peak demand could outpace supply as soon as July, 2022.

In April, the company held its Seasonal Readiness Workshop Summer 2022 event and one of the key takeaways listed in the presentation stated “under typical demand and generation outages, MISO is projecting insufficient firm resources to cover summer peak forecasts.”

Projections show that in July of this year, there could be a five GW shortage in the firm’s probable peak load forecast (124 GW) and the projected available capacity (119 GW). 

The presentation further stated “emergency resources and non-firm energy imports are projected to be needed to maintain system reliability.”

The startling news surrounding electrical grid reliability has drawn the attention of MN State Representative Pat Garofalo, the former chair of the Energy Affordability Policy and Finance Committee.  

A long-time GOP leader on energy issues, he tweeted earlier this week “too many coal/nuclear plants have been shutdown.  That and other reasons are causing reliability issues with the electric grid.”

Garofalo even went a step further, stating “We need to immediately reconsider the 2023 planned closure of the Sherco 2 plant in Becker, MN. We aren’t ready to lose another 680 MW of reliability.“

In fairness to Xcel Energy, the company provided their statement to the Patriot earlier on the same day that MISO released their projections for 2023.  Those considerations were not included in our media inquiry.

Xcel’s communication, however, makes clear their plans to continue towards a future of renewable-only energy on a fast-track timeline.

“We are committed to the Sherco Solar Project, which will help meet our customers’ energy needs as we transition away from coal and closer to our vision to deliver 100% carbon-free electricity by 2050,” Nygard’s communication continued.  “Current solar market dynamics – including global supply chain shortages, rising commodity prices, transmission constraints, interconnection process delays, the impact of inflation and the U.S. Department of Commerce’s investigation – are contributing to project cost increases, significant project delays and cancellations across the industry. We continue to monitor developments related to the investigation and assess the overall impact on the cost of solar panels and other components, and how this could impact Xcel Energy projects moving forward.”

When asked if the company was considering any delays or changes to the solar project, Xcel’s response indicated that they still have an aggressive timeline for completion.

“Our Sherco Solar construction start date is contingent on receiving approval from the Minnesota Public Utilities Commission,” Nygard stated.  “However, our last update to the Commission in April indicated that at that time we anticipated the first phase of the project to go into service at the end of 2024, with the rest of the project coming online in late 2025.”