SPP Market Monitor’s Annual State of the Market Report shows competitive markets, recommends steps for enhanced flexibility and efficiency
LITTLE ROCK, Ark., May 11, 2018 (GLOBE NEWSWIRE) — The Southwest Power Pool (SPP) Marketing Monitoring Unit (MMU) has released its 2017 Annual State of the Market Report. The report presents an overview of market design and market outcomes, assesses market performance and provides recommendations for improvement.
/EIN News/ — “SPP’s markets are very competitive,” said executive director of the SPP market monitoring unit Keith Collins. “The report highlights opportunities to increase efficiencies and enhance flexibility of the system.”
Highlights from the report include:
Market results were workably competitive, with infrequent mitigation of offers and high resource participation levels.
Total wholesale market costs — including energy, operating reserve and uplift payments — averaged around $24/MWh in 2017, which was about 7 percent higher than in 2016. This was primarily caused by increases in energy costs.
The incidence of negative prices doubled in 2017 to about 7 percent of all real-time intervals, up from about 3.5 percent of intervals in 2016.
Wind generation peaked at 15.7 GW and peak wind penetration was almost 57 percent of load in December. Wind capacity increased to almost 17.6 GW in 2017, up about 9 percent from 2016.
SPP continues to have significant excess capacity at peak loads. The MMU estimates that capacity at peak is 30 percent higher than the peak demand level in 2017.
Combined operating reserve costs totaled $80 million last year, an increase of 28 percent over 2016. This was driven by a combination of factors including higher spinning reserve requirements and prices.
Market prices themselves do not signal new investment in generation. Furthermore, MMU analysis shows that market revenues do not support going forward costs for coal resources.