SPP saw more wind power, increased congestion during winter, MMU says

The Southwest Power Pool (SPP) continued to see gains in wind generation during the winter, with nearly 21% of all energy produced in the SPP footprint in February coming from wind power, and those gains have contributed to transmission congestion, the SPP Market Monitoring Unit (MMU) said in a new report.

The MMU’s “State of the Market” report for this past winter, covering the three months from December 2015 through February 2016, said that wind generation was at 17.7% for those three months, compared with 12.4% in the winter of 2015 and 10.2% in the winter of 2014.

“Along with the increase in wind generation comes an increase in congestion, with the most congestion in the SPP footprint found in the ‘wind alley’ of the Texas Panhandle, western Oklahoma and western Kansas,” the MMU said.

The March 23 report said one way to analyze transmission congestion is to study the number of times a flowgate was either breached or binding, with a breached incident occurring when the load on a flowgate exceeds the effective limit. A binding flowgate condition is when power flows have reached but not exceeded the effective limit.

The level of congestion measured using that analysis increased following the addition of the Integrated System (IS) on Oct. 1, 2015, the report noted.

“Reasons for this increase include increasing wind generation online, transmission and generation outages, and unaccounted flows from adjacent systems,” the report said.

Another way to measure congestion is to examine the shadow price at a flowgate, which reflects the intensity of congestion on a given path. The shadow price indicates the marginal value of an additional megawatt of relief on a constraint in reducing the total production costs, according to the report.

Grid congestion during the winter was highest in the southwestern edge of the SPP footprint, the western parts of Kansas, Oklahoma and the Texas Panhandle, where the majority of the wind generation in SPP is located, the MMU said.

The most congested flowgate this past winter based on shadow prices in the real-time market was in western Kansas, along the South Hays–Hays 115-kV line. The flowgate – SHAHAYPOSKNO – had an average shadow price of about $25/MWh during the winter, the report said. 

The flowgate with the highest number of breached and binding incidents – TEMP56_21085 – was in the Texas Panhandle along the Tuco–Lubbock East 115-kV line.

Some of the transmission segments with congestion have enhancements planned that may mitigate congestion at certain flowgates, the report noted. Among those enhancements are reconductoring, a new substation and additional work by Oklahoma Gas & Electric on the Matthewson–Tatonga 345-kV line.

That project is expected to cost $178m and be in service in 2021, according to TransmissionHub data.

The flowgates along the South Hays–Hays line do not have any projects identified to provide congestion relief, according to the report.

As wind generation in SPP increased, coal-fired generation dropped, accounting for 46.3% of all generation in February, compared with 57% in February 2015, the MMU said. Natural gas-fired generation, which the report broke down into combined-cycle units and simple-cycle units, was below 20% in February for both types of units. Combined-cycle units saw a slight gain from the winter of 2015, while simple-cycle units saw a slight drop.

Hydropower generation increased to 3.9% of all generation for the winter, mainly due to the addition of the IS on Oct. 1, 2015, the report noted. The IS includes Western Area Power Administration’s Upper Great Plains region, Basin Electric Power Cooperative and Heartland Consumers Power District, and when they joined SPP, those entities noted that they added about 5,000 MW of peak demand and 7,600 MW of generation, resulting in a threefold increase in SPP’s hydropower capacity.

Examining power prices in the day-ahead and real-time markets, the MMU said lower prices tended to be more prevalent in the northern part of SPP due to less expensive generation in the area, and higher prices were in the southwest portion of SPP.

“Generally, the areas seeing the highest congestion, thus the highest average prices, include the Texas Panhandle, western Oklahoma, western Kansas, and to a lesser extent, northern North Dakota,” the report said.

The report also noted that locational marginal prices (LMPs) for the day-ahead and real-time market have tended to follow natural gas prices over time, although some periods, such as summer months, see divergence. In February, LMPs dipped below $20/MWh after being at $20/MWh during January, while gas prices increased to above $2/MMBtu in February after being below $2/MMBtu in January.

The average gas price in SPP during the winter was $1.98/MMBtu, about 30% below the previous winter price of $2.90/MMBtu, according to the report.