Southwest Power Pool, Inc. (SPP) — a Regional Transmission Organization that serves all or part of fourteen states in the central United States — runs next-day and current-day markets that provide energy and ancillary services to its region’s load. Our service territory has been nicknamed the “Saudi Arabia of Wind”. It encompasses some of the most wind-rich areas in the world and is generally favorable for development with large, open areas that are conducive to turbine placement. Wind plants have experienced annual capacity factors greater than 55% at times. Estimates are that the region has the potential for 90,000 MW of high quality wind output. Doesn’t this sound like the perfect place to develop wind for export to other parts of North America? Some of the traits that make the region great for wind development also pose challenges, like its sparse population (and thus limited load) and few bulk transmission lines to transfer power out (because of a lack of demand for additional generation).
As little as 10 years ago the region had only 1,500 MW of wind installed. SPP’s generation interconnection queue was full of requests that could not interconnect because there was not enough transmission capacity to move the power to load in our region. SPP’s transmission planners studied the economic benefits and opportunities for improved dispatch to relieve congestion and enhance reliability, which led to the approval of several billion dollars of transmission expansion that has greatly improved operations.
Transmission expansion over the previous decade has enabled SPP’s operators to optimize the generation dispatch to the extent that it has paid for itself many times over in savings to the region. It has also enabled access to vast amounts of wind generation. Our installed nameplate wind capacity now exceeds 17,000 MW. If the current generation interconnection queue were to be fully developed SPP could potentially export more than 20,000 MW of wind above its load requirement. (Today, demand levels in our region range from approximately 20,000 – 50,000 MW, and our generation interconnection queue currently includes requests for more than 30,000 MW of new wind generation.)
SPP’s transmission system has been designed primarily to deliver power reliably and economically from generation to load within its region, but its connections to other regions are limited. Located on the western side of the Eastern Interconnection, SPP connects to the Western Interconnection through several DC ties with only 1,220 MWs of capability. To the south, SPP and ERCOT share two DC ties with just more than 800 MW of capability. On our eastern side, SPP is connected primarily to the Midcontinent ISO, with transmission tie-lines running throughout the long seam, but those interconnections were developed for limited reliability and economic transfers and are certainly not sufficient for the huge potential export capability that could exist.
The abundance of variable energy resources in the SPP region represent a strategic opportunity for SPP and its members but is dependent on our export capability. Exporting power out of our region requires adequate transmission, market rules that provide for opportunities, and transparent pricing. SPP has begun evaluating mechanisms to establish equitable and not unduly discriminatory prices for the export and import of electricity. This evaluation is occurring in two primary areas: tariff and business considerations.
Tariff provisions must define an appropriate transmission pricing structure for exports and imports across seams. SPP is evaluating the appropriateness of the regional rate for exporting large amounts of power. The tariff must also include provisions to direct our planning process, which in turn defines the scope of models used for long-term studies. SPP is analyzing the impact of various export levels on our studies and models.
SPP also has numerous market provisions that affect the export of power. We must evaluate, for example, the effect on market congestion and losses while exporting large amounts of power. The seams process by which SPP handles congestion would also be greatly impacted by a dramatic increase in exports.
Operationally SPP would need to perform substantial analysis to ensure continued reliability with a large amount of variable generation. Ramping capability would be needed to accommodate large fluctuations similar to those SPP has already experienced with its current wind resources. In late 2016, for example, we experienced an hourly wind ramp of almost 4,000 MW. Our planning efforts would have to consider increasing that by a factor of two or more. Wind forecasting in our region is accurate, but at a much higher penetration level any error would be greatly magnified and potentially threaten reliability.
The business case for transmission development to export significantly more power must specify expected markets and long-term transmission commitments. This would require establishment of an equitable and non-discriminatory rate to address the cost recovery of the large transmission investment.
Wind resources continue to request interconnection to the SPP grid, and preparation for higher wind penetration levels is underway. To ensure the continued, reliable operation of our system with an expected increase of variable generation, SPP has established essential reliability services including capacity management, thermal management, voltage stability, transient stability, frequency response and ramping. Key considerations necessary for these large wind exports will be the operational aspect to maintain reliability, cost recovery of the transmission expansion, and review of market design.
Bruce Rew
Vice President, Operations
Southwest Power Pool