4 May, 2021
Outlook 2021: Wind continues to drive SPP capacity additions
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Wind is gusting into the Southwest Power Pool.
There are no expected power plant retirements in SPP in 2021, but the region could add more than 4 GW of mostly renewable capacity to the grid this year, according to an S&P Global Market Intelligence analysis.
Wind dominates the projected 4,343-MW net capacity addition this year, representing 3,918 MW of the total. The SPP region saw a net addition of 3,263 MW in 2020, its largest single addition in the past five years, to an overall total of 91,595 MW.
The new wind capacity will further increase the penetration of wind in a region where wind supplied 22% of electric power in 2020 and at times penetrations have climbed north of 80%. The latest peak penetration record was set earlier this year, with wind supplying 81.85% of the power grid's needs at 4:33 a.m. CT on March 29.
Coal-fired generation capacity provided 39% of electricity in the region last year, followed by a 30% share for natural gas.
SPP 2021 summer peak demand is estimated at 52,200 MW. While substantial amounts of new wind capacity are expected on-line this year, the peak capability of this capacity during the summer is relatively low. Considering net peak contributions of new capacity, additions net of retirements are estimated to add nearly 950 MW to SPP's reserves. As the region's estimated reserve margins exceed 25%, this year's additions will tend to maintain an overall surplus.
The largest project by size is Duke Energy Renewables Inc.'s 350-MW Frontier Windpower II Project, an expansion of its existing Frontier Windpower Project in Kay County, Okla.
The Duke Energy Corp. subsidiary started operations at the wind facility in March, selling its output to telecommunications and media company
Ameren Corp.'s 300-MW Outlaw wind project is expected to fully come into service in December after the coronavirus pandemic delayed its construction. The wind project is operating in Atchison County, Mo., with a capacity of 120 MW.
SPP is also looking into the addition of 381 MW of solar capacity from six projects, including Ranger Power's 230-MW, Salt Creek and Wircon USA's 110-MW Lookout I projects. Ranger Power is in early development of Salt Creek, in Lancaster County, Neb., and has yet to find a buyer for its output. Meanwhile, the Wircon Gmbh unit plans to begin commercial operations of Lookout I, which is located on a Native American reservation in South Dakota, by the second quarter of 2021.
The 45 MW of new gas capacity in the region will be coming from Basin Electric Power Cooperative's expansion of its Lonesome Creek Station in McKenzie County, N.D.
A notable retirement was the last two units of the City Utilities of Springfield's James River Power Station in Greene County, Mo. The gas-fired units 4 and 5 were last used in 2017 and in 2018, respectively, prior to retirement.
Wholesale power prices are expected to peak at the region's two power hubs in July, reaching $27.58/MWh at SPP North and $29.05/MWh at SPP South. Wholesale natural gas prices at PEPL are expected to range between $2.26/MMBtu and $2.57/MMBtu for most of the year, peaking at $2.77/MMBtu in December.
