RTO Says Day-ahead Market Has Saved Participants $2.7B
SPP celebrated the fifth anniversary of its wholesale market by noting it had produced the nation’s lowest electricity costs, saving market participants $2.7 billion, and exceeded initial projections for annual net savings.
SPP had projected the Integrated Marketplace would yield $100 million in annual net savings to market participants when it was brought online in March 2014. Instead, it said, the markets have “dramatically outperformed expectations” by producing an average of $570 million in annual savings from lowered production costs, reductions to excess capacity requirements and other efficiencies.
“Our market has continually proven itself to be one of the wisest investments our members have made,” SPP CEO Nick Brown said in a statement referring to the market’s economic and reliability benefits. “It has also set us up for continued success well into the future.”
The Integrated Marketplace added day-ahead generation dispatch, congestion management and real-time balancing solutions to SPP’s market offerings. At the same time, the RTO consolidated the 16 balancing authorities (BAs) in its 14-state footprint to coordinate next-day generation, increasing access to lower-priced renewable energy and energy reserves.
SPP said wind energy made up 3% of its annual energy production (6 of 176 GWh) in 2008. Last year, the RTO produced 276 GWh of energy, with wind accounting for 23% of that figure. It has seen a peak wind penetration level of 64%.
“A decade ago, serving even a quarter of our load with variable, renewable generation wouldn’t have been possible, but today it is almost a daily occurrence,” Vice President of Operations Bruce Rew said.
Conservative Operations Alert Ends
SPP ended two-and-a-half days of conservative operations on Tuesday after successfully meeting high demand, despite subzero temperatures in the northern portion of its footprint. The RTO issued the conservative operations alert about midnight March 3, lifting it shortly after noon Tuesday.
Spokesman Derek Wingfield said SPP was able to mitigate the loss of 2.5 GW of generation from derates and failures to start in the cold weather, primarily in the southern part of the footprint.
SPP saw peak loads, all in the 7 a.m. hour, of 41.1 GW on March 4; 40.6 GW on March 5; and 39.3 GW on March 6. The RTO hasn’t met demand that high since September 2018.
Temperatures in Bismarck, N.D., dipped to -15 degrees Fahrenheit on March 3, before rising to 22 F on Wednesday.
SPP, Members Prep for Summer in Arctic Temps
Temperatures were 18 F on Tuesday as SPP staff and market participants gathered in Omaha, Neb., for — ironically enough — a workshop on summer preparedness.
Staff said a new summer peak is unlikely. SPP expects average heat during the early summer months across its footprint, with a 33 to 40% chance of above-average temperatures in later months. It also gave a 33 to 40% chance of above-average precipitation in early summer months, with average precipitation later in the season.
SPP’s all-time peak demand of 50.6 GW came in July 2016. Demand in 2017 was 50.5 GW, dropping to 49.7 GW last summer.
Staff reviewed with members last summer’s performance, when the only critical moments came during the shoulder months. SPP issued a hot-weather alert in May and a level 2 emergency energy alert in September, both during periods of above-average heat and low wind.
“We have tight capacity issues because we try to run a tight ship,” SPP’s Jon Langford said.
Staff is working on its 2019 summer assessment, using power flow and voltage stability analyses.
— Tom Kleckner