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SPP sets peakload record, resource alert extended due to hot-weather conditions

Highlights

All-time peakload record of 51.037 GW July 28

SPP South Hub averaging 79% higher on year

Gas generation up 7 percentage points on week

The hot weather blasting the Southwest Power Pool footprint led to an all-time peakload of 51.037 GW July 28, as the SPP Balancing Authority remains under conservative operations as well a resource alert due to hot weather, high load and capacity concerns, SPP announced July 30.

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The resource alert, which started at noon CT July 26, has been extended through 8 pm July 31, while the conservative operations alert is in effect from noon July 29 through 8 pm July 30, according to SPP notices.

"A declaration of Conservative Operations is intended to inform SPP's market participants they should make available all necessary generating resources to meet the high demand SPP anticipates across its region," according to an SPP statement. "SPP takes this step when there is a need to operate its system conservatively based on weather, environmental, operational, terrorist, cyber or other events."

To prevent conditions from worsening, SPP may commit generation to serve load earlier than during normal operations and ahead of standard day-ahead market processes, according to SPP. Resource Alerts are communicated to SPP members to ensure they're aware of conditions that could lead to reliability issues if they worsen. Neither status indicates that SPP requires utilities or the public across its 14-state region to conserve energy.

Steamy situation

Temperatures across the SPP footprint are forecast as high as 100 degrees Fahrenheit July 30 and 31 in Tulsa, Okla., 6 degrees above normal, according to CustomWeather. Parts of the SPP footprint are under a heat advisory and excessive heat warning with heat index values as high as 112, according to the US National Weather Service.

"Much of the heat and tropical humidity will be across the central Plains," according to NWS.

The weather conditions led SPP to forecast peakload around 49.85 GW July 30 and 46.77 GW July 31, before dropping to 41.42 GW Aug. 1, 42.55 GW Aug. 2 and 42.68 GW Aug. 3. In comparison, peakload has averaged 43.23 GW so far in July, 3.3% lower than the July 2020 average, according to SPP data.

The record peakload of 51.037 GW reached at 4:24 pm CT July 28 surpassed the previous record of 50.662 GW from Aug. 19, 2019 by 375 MW, SPP announced July 30.

Gas growth

While wind generation fell to average 16% of the total fuel mix July 26-29, a drop of 5 percentage points week on week, natural gas-fired generation jumped 7 percentage points week on week to average 30.3%, according to SPP data. Gas-fired power burn in the SPP service territory has surged over the same period, averaging 1.9 Bcf/d, or its highest since August 2020, S&P Global Platts data showed. Coal-fired generation was little changed averaging 45.3% July 26-29, compared to 46% the previous week.

The increased call on gas-fired generation has pushed spot gas prices in the SPP market area to summer-season highs this week. At the Midcontinent region's benchmark location, NGPL Midcontinent, the cash market traded into the mid-$3.80s/MMBtu this week, later easing to $3.63/MMBtu in July 30 trading.

Prices at the nearby Panhandle Eastern Tx-Ok and Southern Star locations saw similar movements this week, rising to the mid-$3.80s/MMBtu before dipping to $3.55/MMBtu and $3.63/MMBtu, respectively, July 30, according to Intercontinental Exchange data. Panhandle Oklahoma Texas spot has averaged $3.474/MMBtu so far in July, 128% higher year on year, according to S&P Global Platt pricing data.

Likewise, power spot prices have reacted to the heat and record demand. SPP South Hub on-peak weekend is valued in the mid-$40s/MWh on ICE around 9:30 am CT July 30, within $1 from the day-ahead value. In comparison, South Hub on-peak day-ahead locational marginal prices have averaged roughly $46.50/MWh in July, 79% higher year on year, according to SPP data.