Power struggle: challenging grid conditions for SPP

Southwest Power Pool (SPP) is responsible for managing the supply of electricity from almost a thousand generating sources and across more than 72,000 miles of transmission lines throughout the central United States. But as grid conditions become more challenging, can it cope? 

Our Power Trading Analytics service recently published a detailed report on the outlook for generation and the implications for grid reliability for this major Regional Transmission Organisation (RTO). Fill out the form to access the insight, or read on for a quick overview of the key issues involved. 

An increasingly wind-dependent market 

Over the past decade or so, wind has grown faster as a generating source in SPP’s footprint than in the rest of the US. According to the RTO’s own figures, wind accounted for just 8% of the energy produced in SPP in 2012, with 59% coming from coal. By 2023, wind’s share of generation had risen to a whopping 37% putting it ahead of both coal and gas (27% each).  

Wind generation provides cheap, carbon-free energy when available. However, intermittency is a growing problem as it begins to dominate the fuel mix. When wind dies down, gas and coal plants are often called on to rapidly ramp up supply, causing additional wear and tear on equipment. 

More frequent extreme weather events 

SPP’s remit covers the coldest areas of the United States, making it particularly vulnerable to extreme weather. The increasing frequency of severe events such as Winter Storm Uri in 2021 and Winter Storm Elliot in 2022 had significant impacts, stressing the grid more than during summer heatwaves.  

Capacity on outage has typically jumped by 4-8 gigawatts (GW) during winter storms. Multiple types of energy sources can be affected, with wind turbines icing up, ‘freeze-offs’ in gas wellheads and pipelines, and water for hydro generation becoming frozen. 

Surging demand growth 

Supply-side issues aren’t the only problem SPP faces, however; demand is also an issue. For almost two decades, slowing population growth and increased energy efficiency meant US electricity needs remained relatively flat. However, in recent years, new sources of demand have begun to be added to the grid.  

With the rise of artificial intelligence, the SPP region will see 130% growth in data centres by 2027, attracted by low-cost wind generation, reduced cooling requirements, and a low-tax, low-regulation environment. That means SPP’s peak demand could be up to 25% higher by 2030, both in winter and summer. 

Result: energy alerts continue to rise 

Until 2019, grid advisories in SPP were rare. However, since then, over 100 grid alerts have been issued – and without urgent action, these problems are likely to continue. SPP has expressed concerns for the future, citing the above problems, along with the reduced availability of thermal generation as plants are decommissioned. 

New generation being added is insufficient to replace retirements, while rising demand and tighter supply leaves less time for outages to carry out essential maintenance. To address the issue, improvements must be made to the interconnection queue to get new generation online more quickly. 

Don’t forget to fill in the form at the top of the page to download your complimentary copy of the full insight. This covers evolving grid conditions in SPP in more detail, and includes a detailed break-down of upcoming generation retirements and new builds by subregion and the anticipated congestion impacts arising from these changes to the generation fleet.