Implementation of 11 Gigawatts of batteries in MISO grid could lead to potential savings of $27 billion in system costs by the year 2035, according to a recent report.
The Midcontinent Independent System Operator (MISO), which manages the electric grid and wholesale power markets in 15 states from Louisiana to North Dakota, and in Manitoba, Canada, is poised for a significant increase in battery storage capacity. According to a study prepared for the American Clean Power Association, the addition of approximately 11 GW of batteries in the MISO footprint could save about $27 billion in system costs by 2035.
Favorable Environment for Battery Buildout
The drive for battery storage in MISO is fueled by a combination of factors. Retiring thermal assets, rising demand, and high renewables deployment create a favorable environment for battery buildout. Utilities' traditional reliance on large power plants is shifting to a model that includes distributed energy resources such as rooftop solar, battery storage, and electric vehicles.
Current and Projected Battery Storage Capacity
Currently, MISO has about 125 MW of battery storage on its system, but expectations are to reach nearly 1 GW by early 2026. This is significantly less than the California Independent System Operator (CAISO) region that had about 13 GW of battery storage at the end of last year, despite a lower peak load of 52 GW compared to MISO's 127 GW record peak load.
Benefits of Battery Storage in MISO
The core benefits of battery storage in MISO include storing low-cost, excess electricity (often from renewables) and delivering it during peak demand, thus reducing peak prices. It also helps smooth the variability of wind and solar generation and improves overall grid resilience and flexibility.
As demonstrated by the Electric Reliability Council of Texas, batteries can bring significant benefits to the grid. On one day in 2023, batteries in the ERCOT service area discharged enough electricity to prevent load sheds. Without the battery storage, average wholesale power prices would increase by $1.40/MWh by 2035, adding about $1.2 billion to overall electricity costs, according to a report.
Battery Revenue Streams in MISO
Batteries in MISO can generate revenues from wholesale energy arbitrage, ancillary services, and capacity payments. Last year, 3 GW of batteries in the ERCOT service area provided enough ancillary services to allow an equivalent amount of gas-fired power to act as baseload generation, helping to push down systemwide real-time prices.
The Future of MISO's Grid
By 2035, MISO's substantial increase in battery storage capacity could dramatically lower system costs and peak electricity prices. Aurora Energy Research's modeling showed that with these batteries, MISO peak power prices on a representative day in May 2035 would drop to around $85.90/MWh, compared to $245.30/MWh without additional battery storage. This contributes to lowering overall wholesale power prices by about $1.40/MWh, resulting in roughly $1.2 billion in savings on electricity costs by 2035.
This marks a critical evolution for MISO in balancing costs and integrating renewable energy. While MISO is currently behind CAISO in terms of battery storage deployment, its larger footprint and higher peak demands imply potentially greater absolute savings and price impacts as storage scales up.
[1] American Clean Power Association, "Modeling Study: Midcontinent Independent System Operator (MISO) Battery Storage Deployment Analysis" [2] Aurora Energy Research, "MISO Battery Storage Deployment Analysis"
- The renewable energy industry, supported by finance, is set to witness increased expansion in MISO due to factors such as retiring thermal assets, high renewables deployment, and rising demand, creating a favorable environment for battery buildout.
- Technology and data-and-cloud-computing play significant roles in the growth of battery storage in MISO, with expectations to reach nearly 1 GW by early 2026, generating revenues from wholesale energy arbitrage, ancillary services, and capacity payments.
- The integration of battery storage in MISO's grid is expected to bring substantial benefits, with stored low-cost electricity from renewable sources being delivered during peak demand, lowering peak electricity prices, reducing system costs, and improving overall grid resilience and flexibility.
