How renewable energy, electricity markets and constant change affect our mission to keep the lights on

by Nick Brown (nbrown@spp.org) 255 views 

Electricity is perhaps the most critical component of our nation’s critical infrastructure. Emergency services, healthcare, transportation, industry and nearly all of our creature comforts rely on electricity. Naturally, each of us as consumers want this resource provided as reliably and economically as possible.

As one of seven regional electric grid operators in the U.S., we at Southwest Power Pool (SPP) know that no single energy source — coal, gas, wind, nuclear, hydro, solar, or otherwise — is the silver bullet that meets all of our electrical needs. Our member utilities instead implement a strategy of electric reliability through fuel diversity. Simply put, that means we let each source of electricity play to its strengths, and we deploy them in concert to meet the ever-changing needs of our 14-state region minute-by-minute.

We orchestrate this concert through our Integrated Marketplace, a wholesale electricity market. Think of the New York Stock Exchange, but instead of brokers trading shares of stock we facilitate the purchase and sale of electricity among those that generate, transmit, distribute and use it. Our market runs robust and proven algorithms to identify the most reliable and affordable of our nearly 800 generating sources to meet demand. It runs every minute of every day, committing resources days in advance based on forecasts of how much energy will be needed. It then re-runs models in real-time to address unexpected contingencies like changing weather patterns and generation and transmission line outages.

Wind is currently the least costly fuel source in our region, due in part to production tax credits. Wind is also abundant in our part of the country. The SPP region has been called the “Saudi Arabia of wind.” Our footprint boasts nearly 200 windfarms and more than 10,000 turbines whose total output has neared 16,000 MW. SPP holds the record among our North American peers for serving the highest percentage of our load at a given time with wind power: 64 percent in the early morning hours of April 30, 2018.

You might wonder, given wind’s low cost and abundance, why we haven’t seen even higher levels. Why can’t we meet all of our region’s electrical demands with wind? It’s because even with 10,000 turbines capable of producing 16,000 MW, we’ve seen total wind output for our entire region as low as 147 MW. That’s enough to serve just half of one percent of our demand. Likewise, we’ve had swings in wind output of 3700 MW in one hour, equivalent to about seven large natural gas or coal plants simultaneously ramping up.

Wind isn’t the only variable we have to account for. There’s no such thing as a “typical” day managing the electric grid, especially across a footprint as large and diverse as SPP’s. Temperature has an enormous impact on electricity use, and in our region we’ve seen temperature differentials of nearly 100 degrees in a 24-hour period, when the Dakotas reached 20 degrees below zero while northern Louisiana was in the upper 70s. That’s a lot of volatility to cope with when trying to ensure more than 17 million peoples’ lights stay on, and it underscores the importance of a diverse fuel mix.

Until battery storage is effective and affordable enough to operate at utility-scale, electricity must be generated, distributed and used nearly simultaneously. When the wind stops blowing or the sun goes down, or when unexpectedly rising or dropping temperatures lead to unforeseen electricity use, we can’t just let the power to our region lapse. It’s not enough to have sufficient wind to serve our load at a given moment. We must have other generation ready to replace its loss instantaneously.

In our region, we typically balance wind with quick-start natural gas and coal. Other resources play their parts, too. Nuclear plants, for example, serve as “baseload generation.” They can’t be ramped up or down quickly, but once they’re online they operate affordably and reliably for long periods of time and often serve as the foundation of SPP’s “stack” of generating resources dispatched by our market.

From our headquarters here in Little Rock, SPP plays a critical role in making sure millions of people across 14 states have electricity when they need it. It’s a job in which we take great pride and one that requires constant diligence, flexibility and continuous learning. When we do it well – and as the president and CEO of this organization, I can confidently say we do – we provide more than just power. We provide the peace-of-mind that power will be there when you need it. We provide reliability.

Editor’s note: Nick Brown is president and CEO of Little Rock-based Southwest Power Pool, which manages the electric grid and wholesale energy market for the central United States. The opinions expressed are those of the author.

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