SPP expects wind to return to top of fuel stack; storage to be game changer

Southwest Power Pool is expecting wind generation to return to the top of the fuel stack as it prepares for energy storage to become a game changer and continues its expansion of the Western Energy Imbalance System market, said President and CEO Barbara Sugg, reflecting on her first six months in the role.

Wind was the top fuel source for the first half of the year across the SPP footprint, averaging 34% of the fuel mix, followed by coal-fired power at 26.6%, according to SPP data. A new wind generation peak record of 18.343 GW was reached July 17, surpassing a seven-month record.

PODCAST: Southwest Power Pool expects wind to lead 2020 fuel stack, storage to be a game changer

"The wind is not a new phenomenon for us," Sugg said in a Platts podcast posted Oct. 12. "The changes in adapting to the wind has been something we have been doing for several years now. It's gotten bigger over the years, but some of our more challenging wind situations have not occurred in the last year. Yes, we have a lot of wind. We still have a lot of wind coming in. We haven't had so much wind coming in that it causes us to exceed what we can reliability operator with, even when the load was down."

Wind and coal relationship

Coal-fired generation moved into the top fuel spot for July, August and September.

"We see a lot more wind energy in the fall season, so I won't be surprised to see wind overtake coal as the number one fuel source for 2020," Sugg said. "We predicted this would happen, but we didn't predict it would happen in 2020. We thought maybe it would happen in 2021. And we're already seeing this huge amount of wind in our footprint."

There has been nearly 750 MW of wind capacity added in SPP so far this year, with another almost 5.3 GW in the generation interconnection queue listed as "on schedule" with commercial dates proposed this year, according to SPP data. A combined 5.27 GW of wind generation is in the queue with proposed commercial dates in 2021-2023.

"Not everything in the interconnection queue will be ultimately built," Sugg said. "It's a good indicator of general trends in the buildout of particulate generation types, but there are certainly requests in the queue that will not result in generation that comes online."

There is 40 GW of wind in the queue to be studied, as well as 37 GW solar, 8 GW storage and a little of natural gas and other generation, Sugg said.

Storage will be a "game changer"

"We're seeing more and more storage," Sugg said. "To me, storage has the ability to really change the game once we understand how to treat it, whether we're using it as an energy asset or a transmission asset, and helping to assist us in reliability from both wind drop offs and solar drop offs."

However, it will take five to 10 years for storage to really be a major player, Sugg said about the many unknowns when it comes to market rules and how to reliability dispatch storage, as well as how to compensate storage.

"I expect it to be a very steep curve once we really get into it," Sugg said. "We're seeing that in the queue, but I don't think it will really present itself very much over the next year. I think it's going to take a little longer than that."

WEIS market

SPP remains on track to launch its Western Energy Imbalance System market in February, Sugg said. SPP recently refiled its tariff (ER20-1059, ER20-1060) with FERC. Although, SPP is at the mercy of FERC regarding timing, they will have the systems ready and market trials conducted.

"We have a lot of renewable energy that is highly sought after in the West," Sugg said. "With the amount of wind that is in our queue, if it were all to be built, we can't possibly consume all of that within our region, but we can export it. And by expanding our RTO footprint into the West, there are tremendous opportunities to help those utilities out there meet their renewable goals by having some of the wind come across through the DC ties and really help those utilities out there with that low-cost clean energy that they so badly want."

SPP-MISO joint study

SPP and the Midcontinent Independent System Operator announced a joint study focused on the two regions' seams that will take about a year.

"This effort will be to look along the seams for potential transmission upgrades, generator interconnection upgrades that can resolve some of the congestion and price challenges we see along the seam and create mutually beneficial transmission solutions," Sugg said.

Pandemic delays outages

While the coronavirus pandemic caused changes in load demand, the bigger concern was the cancellation of planned generator outages.

"There were reasons those generation outages were cancelled in the spring time," Sugg said about companies not wanting to expose personnel in confined areas. "That creates a risk of generator failure later, especially in the summer time. We didn't see forced outages to be anything more than what we would typically see in the summer time."

Load has returned to normal this time of year and SPP is starting to schedule the planned generator outages that were cancelled in the spring, Sugg said, adding she does not expect the same uncertainty going forward if the virus strengthens.

"We know a lot more about the pandemic than we knew in the spring," Sugg said. "We understand about social distancing. We understand about wearing masks. We understand about how to avoid potential exposure between people. I think that generator outages that were canceled are not likely to be cancelled in the fall."