Opportunities and Challenges in Wind Energy: A Study of Midwest Independent System Operators (MISO) in the USA

Opportunities and Challenges in Wind Energy: A Study of Midwest Independent System Operators (MISO) in the USA

Xinxin Hu, Cathy Zishang Liu, Steve Zhou
Copyright: © 2021 |Pages: 22
DOI: 10.4018/ijban.2021100105
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Abstract

Wind energy increasingly plays a crucial role in replacing existing systems based on fossil fuels and nuclear generators. However, skepticism about the technological feasibility, economy of scale, and operational profitability prevails. The paper aims to fill this gap by analyzing the affordability of wind energy and by exploring the optimization issue incurring during the integration process of the micro electricity grid. Focusing on locational marginal pricing (LMP) and Midwest independent system operator (MISO) data between January 2014 and December 2020, the authors find wind power generation helps decrease the system energy price after control the effect of gas price. Further, the model captures the important seasonal and uncertain characteristics of power generation and consumption over the years. They also identify and discuss the bottleneck issues of the MISO power grids. These findings provide insights into affordability and technologic integration for long-term strategic planning on green energy including pricing, seasonality, dispatch, and reliability issues.
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1. Introduction

In recent years, forces from social, cultural, political, and legislative aspects have increased the level of recognition of environmental impacts from human activities. Environmental changes are progressing at an alarming speed and organizations are facing rising scrutiny from stakeholders and society in regard to their conducts towards the well-being of the planet (Hopkins, 2010; Kurkalova and Carter, 2017). As the environmental degradation could pose irreversible impacts on human life and development, environmental sustainability requires the vigilant consideration to both economic and social performance (Abson et al., 2017; Biswas et al., 2018; Li et al., 2019; Shou et al., 2019). Organizations are expected to not only deliver financial success, but also concern about the effects of their practices on reducing emissions, diminishing waste generation, improving effectiveness, and minimizing the total environmental footprint (Hart and Milstein, 2003). Facing the growing demand from society, firms are increasingly disclosing their performance on their impacts on the environment, such as greenhouse gas emissions and other energy metrics.

A wide range of issues have been addressed in environmental sustainability, ranging from small roles played by individuals to substantial practices executed by institutions that contribute to the cause on a much larger scale. Therefore, various efforts have been exerted to enforce the protection of the natural environment. For example, the U.S. has announced plans to cut carbon dioxide emissions; and the European Union requires companies with more than 500 employees to report their environmental and sustainability-related performance. These new regulations or policies aim to encourage businesses to become greener, to tie financial success to ecological and societal success, and vice versa. For industrial organizations, environmental sustainability manifests their attitude in three aspects: create value and balance costs and revenues in the production and distribution of goods and services; use renewable natural resources and produce emissions that can be absorbed naturally by the ecosystem; and preserve and develop social capital of communities to create value, which altogether are generally described as the triple bottom (TBL). (Glavic and Lukman, 2007; Porter and Kramer, 2006; Ruggieri et al., 2016;).

A report from the Intergovernmental Panel and Climate Change (IPCC) disclosed that the atmospheric concentration of CO2 have increased 40% from the concentration before industrialization, which reached 391 mg/L by 2011. Recent data reveal that the U.S. economy accounted for about 16% of the world’s total GDP and consumed approximately 17% of the world’s primary energy. The U.S. is the second-largest emitter of CO2, with approximately 5.41 billion metric tons of carbon dioxide emissions in 2018. The largest sources of CO2 emissions come from power generation, transportation, and industry. Even though the U.S. government undertook significant efforts to reduce the reliance on coal for electricity generation, the country has become a major producer of crude oil.

Due to environmental problems and fossil-based material’s depletion in the foreseeable future, alternative non-fossil energy are in urgent need of sustainable development. Wind energy, solar energy, bio-energy, hydrogen energy, and nuclear energy are considered promising sources of energy that could substantially contribute to realizing sustainable development of energy and environment. In particular, through its high CO2 abatement potential, wind energy used for power generation has been gaining increased popularity due to its technology maturity, low cost, and environmentally friendly nature. Wind energy is considered not only the most sustainable energy source but also the most economical one (GWEC Annual Wind Report, 2019) compared with other renewable energy sources.

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