Monday, June 25, 2018

SPP Coal Generation Continues Decline; Wind, Load Records Set

By Tom Kleckner

Coal-powered generation continues to decline in SPP’s market, accounting for only half the RTO’s total energy production this fall (September-November), according to the Market Monitoring Unit’s recently released State of the Market report.

Wind production and lower gas prices have combined to reduce the use of coal resources, which accounted for 60% of SPP’s energy production just two years ago. At the same time, wind energy has increased its share of production from 13% in fall 2014 to 20% in 2016.

Not surprisingly, coal resources only set real-time prices 37% of the time this fall, compared to 52% in 2015. Cheaper gas units (combined cycle and simple cycle) were marginal 53% of the time, with wind resources setting the price 9% of the time.

After record low prices in the spring, gas prices rose in the fall, with the average cost of $2.61/MMBtu at the Panhandle Hub, compared to $2.25/MMBtu in 2015. The real-time balancing market’s average LMP was $25.10/MWh, up from $19.98/MWh a year ago; the day-ahead market saw an increase from $20.73/MWh last year to $24.43/MWh this fall.

The report also noted virtual transactions have “steadily increased from year to year,” driven primarily by financial-only market participants. Financial players completed 2.1 million virtuals this fall, with resource and load owners accounting for just over 62,000.

SPP saw “marked” increases of 12.6% and 13.7% of load in October and November, respectively, bettering the previous high month of 10.8% last March. Virtual transactions as a percentage of load have increased from 7.1% two years ago to 11.7% in 2016.

The RTO filed the report with both FERC and the Arkansas Public Service Commission.

SPP Sets New Wind Generation, Winter Load Marks

SPP set a new record for wind generation Friday when the footprint cracked the 12,000-MW threshold for the first time, producing 12,141 MW. The latest record was its sixth in 2016 for wind generation, breaking the previous high of 11,305 MW on Nov. 17.

The RTO also set a new winter load peak of 40,323 MW on Dec. 19, marking the first time its winter load surpassed 40,000 MW.

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