SPP MMU report: Energy prices remained low in spring

The Southwest Power Pool (SPP) on July 9 said that its Marketing Monitoring Unit’s (MMU) recently released "State of the Market Spring 2018" report, which covers March through May, found that energy prices remained low, with spring prices averaging around $23/MWh, an increase of 13% over spring 2017.

The average real-time price was $22/MWh, a 10% increase over spring 2017, according to the report.

SPP said in its statement that other highlights for the period include:

  • Higher load due to lower than normal temperatures in March and April, and much higher than normal temperatures in May
  • Decrease in intervals that experienced negative energy prices

According to the report, the hourly average load for spring 2018 was up around 8% from spring 2017. While March and April load in 2018 increased slightly compared to 2017, May 2018 average load was 14% higher than May 2017, the report said, adding that those changes were primarily driven by lower than normal temperatures during March and April 2018, and much higher than normal temperatures during May 2018.

Overall, the hourly average load for spring 2018 was just over 28,000 MW, the report said.

Average monthly real-time generation increased by 6% from spring 2017 to spring 2018, the report said. Generation by coal-powered resources continued falling, accounting for only 37% of energy produced in the spring 2018 period, the report said, adding that during that same period, wind resources accounted for almost 29% of total generation.

Wind capacity in the footprint continues to grow steadily, with nameplate wind capacity increasing from 12,800 MW at the end of May 2016, to 17,700 MW at the end of May 2018, the report said.

The percentage of total generation provided by simple-cycle natural gas resources doubled from 4% in spring 2017, to 8% in spring 2018, the report said. Nuclear generation in spring 2018 was about half the level of total generation in spring 2016, decreasing from 10% to 5%, and that is primarily due to the retirement of the Fort Calhoun nuclear plant in October 2016, as well as outages of other nuclear resources due to maintenance, the report said.

During spring 2018, the day-ahead wind capacity factor was 38%, and the capacity factor increased to 46% in the real-time market, the report said. The disparity between day-ahead and real-time capacity factors can contribute to negative price intervals, the report said.

The area with the highest congestion in the spring 2018 period was in southeast Oklahoma, while the area with the highest congestion for the past 12 months was in west-central Oklahoma, the report noted. The high levels of congestion have abated on the Neosho-Riverton constraint in southwest Missouri/southwest Kansas, the report said.

Overall congestion in the SPP market footprint declined, the report said, adding that intervals with breaches in the real-time market declined from 40% in spring 2017 to 20% in spring 2018. In addition, intervals with no congested constraints increased from 10% in spring 2017 to just over 21% in spring 2018, the report said.

During the spring season, the TMP109_22593 (Tupelo Tap-Tupelo 138-kV for the loss of Seminole-Pittsburg 345-kV) has been the most congested flowgate, the report said, adding that that flowgate is located in southeast Oklahoma and has experienced an increase in congestion over the past year since installation of an extra-high voltage phase-shifting transformer at Woodward in May 2017.

With the prevalence of wind generation in the western portion of the SPP footprint, the Woodward flowgate had been the most congested flowgate for a period extending over one year, the report said. That flowgate does not appear in the top 10 congested flowgates for the past 12 months, and that can primarily be attributed to the installation of an extra-high voltage phase-shifting transformer at Woodward in late May 2017, which increased the amount of transfer capability in the area, the report said.

Among other things, the report said that the most congested flowgate over the past 12 months has been TMP118_22847 (Southard-Roman Nose 138-kV ftlo Tatonga-Matthewson 345-kV), which is located to the east of the Woodward flowgate. The installation of the extra-high voltage transformer at Woodward has not eliminated congestion, but rather redistributed congestion across a wider area, thus making the TMP118_22847 the most congested flowgate for the past 12 months, the report said.

About Corina Rivera-Linares 3065 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.