- Infrastructure upgrades and market enhancements are enticing corporate energy buyers to the Southwest Power Pool market, according to new research from Rocky Mountain Institute. The group says two-thirds of corporate wind purchases are occurring in a Great Plains state.
- Through 2014, Texas was the leader in corporate renewables deal, but RMI says both Oklahoma and Kansas have been making strides to create a better environment for corporate PPAs.
- Wind generation installed in SPP's footprint grew by 30% last year, rising from 12 GW to more than 16 GW, and there are concerns about finding additional demand to consume the carbon-free energy.
It's not just an abundance of cheap wind energy driving the SPP market, according to Rocky Mountain Institute. The grid operator has also made changes to its market that are attracting corporate buyers looking for clean power.
While Texas is the site for the greatest number of corporate PPAs, states to its north are also seeing increased activity.
"The volume of wind PPAs signed in SPP in 2015 alone was more than double the volume over the preceding 7 year period from 2008-2014," RMI said in their brief. "And despite dropping last year, SPP wind PPA volume was still greater in 2016 than the 2008-2014 total."
RMI said transmission upgrades, falling capital costs, and market developments have all helped the grid operator attract wind development and corporate PPA activity.
For a brief time in March, SPP served 54.22% of load with wind energy. And the expansion of wind energy has been rapid: as recently as the early 2000s, SPP's generating fleet included less than 400 MW of wind. But the system has approved the construction of more than $10 billion in high-voltage transmission infrastructure over the last decade, helping bring wind power from projects in the Midwest.
The rapid rise of renewable energy, however, has caused difficulties for some organized markets. NRG, which owns a dozen coal, gas and nuclear plants in Texas, said earlier this year that generation revenues for the region dropped more than $90 million last year, primarily because of lower power prices in the state.