SPP Tracker: Spot prices dip as two wind maximum output records set in November

Houston — Southwest Power Pool wholesale power prices dropped as much as 27% month on month in November as the wind output record was broken twice during the month and wind is expected to set a record as the top fuel source for the year.

Peakload averaged 29.1 GW in November, down 8.4% year on year and down 4.5% month on month, according to SPP data. Population-weighted average temperatures across the SPP footprint in November averaged 51.4 degrees Fahrenheit, up 18.7% year on year, but down 13.4% from October, as heating-degree days fell 36.3% year on year, but rose 56.2% month on month, according to CustomWeather data.

Generation mix

Wind-powered generation remained the top fuel source, averaging 41% of the total fuel mix in November, jumping 8.7 percentage points year on year and up 6.2 percentage points month on month, according to SPP data. Wind output climbed 19% year on year and increased 18.3% month on month to average 11.2 GW in November.

Coal-fired power generation slipped 4.4 percentage points year on year to average 30%, as natural gas-fired generation fell 8.1 percentage point month on month to average 18.5% of the mix.

Total generation eased 6.6% year on year to an average of 27.2 GW in November, according to SPP data.

Wind has averaged nearly 34% of the fuel mix so far this year, surpassing coal at an average of about 30% and gas at an average of more than 27%, according to SPP data. If this trend continues, wind would be the lead fuel source for the year in SPP, a first for an US power grid.

SPP set a new wind peak record of 19.2 GW at 9:25pm Nov. 23, surpassing the previous record set Nov. 14 by 734 MW.

Spot prices

SPP North Hub day-ahead on-peak locational marginal prices averaged $21.59/MWh in November, a drop 26.7% month on month and a decrease of 3.6% year on year, according to SPP data. Prices fell as low as $3.23/MWh on Nov. 18, the lowest level since February 2018.

North Hub real-time on-peak plunged 72.1% month on month and fell 51% month on month to average $9.27/MWh, falling as low as negative $21.35/MWh on Nov. 18, according to SPP data.

The North Hub on-peak day-ahead to real-time spread was $12.32 in November, while off-peak was $9.44/MWh.

The more load-heavy South Hub day-ahead on-peak LMP averaged $23.13/MWh in November, down 4.6% year on year and down 7.7% month on month, while real-time averaged $17.65/MWh, a drop of 44.5% month on month and off 29.2% year on year, according to SPP data.

Bucking the trend, spot gas at the Panhandle Texas-Oklahoma pipeline averaged $2.253/MMBtu in November, up 14.5% year on year and an increase of 14% month on month, according to S&P Global Platts pricing data.

Forwards curve

SPP forward packages continue to trend lower, despite gas forwards trending higher, possibly reflecting a mild seasonal forecast for the more populous areas of the footprint.

South Hub December on-peak averaged $24.96/MWh, down 13% from where the 2019 package averaged a year ago, according to Platts pricing data. The December 2020 package rolled off the curve at $25/MWh, 5.1% lower than where the 2019 package ended.

January on-peak averaged $29.57/MWh, a drop of 8.7% from its year-ago counterpart, while February on-peak averaged $28.72/MWh, down nearly 5%.

Panhandle TX-OK December averaged $2.606/MMBtu, down 12.8% month on month, but up 22.2% from where the December 2019 package averaged a year ago, according to Platts pricing data. The December 2020 package rolled off the curve at $2.583/MMBtu, 32% higher than where the 2019 package ended.

The National Weather Service's Nov. 19 seasonal forecast for December, January and February indicated increased chances -- 33% to 60% -- for above-normal temperatures across most of SPP's more populous southern footprint, and near-normal temperatures for much of the remainder.