The Southwest Power Pool issued a resource advisory Aug. 4 due to high load and resource availability uncertainty as wholesale spot prices remain above $100/MWh.
Parts of Texas, Oklahoma, Kansas, Nebraska, Wyoming, South Dakota and Montana are under a heat advisory with heat index values up to 108 expected, according to the US National Weather Service.
The advisory is in effect from noon CT through 10 pm Aug. 4.
Peakload is forecast around 50.2 GW Aug. 4, which is 21% higher than the five-year average, according to SPP data. The all-time peakload record is 53.243 GW reached July 19.
Wind generation is forecast to peak around 16.6 GW Aug. 4. In context, wind-powered generation has averaged about 25% of total market share since July, according to SPP data.
Wind curtailments have averaged 5.8 GW for the first couple days of August, compared to 66.5 MW a year ago, according to S&P Global Commodity Insight's wind generation curtailment index. Wind penetration has averaged 25.6% Aug. 1-2, roughly double the level seen a year ago, according to S&P Global Commodity Insights Renewable Penetration Index.
Market impacts
In the spot market, the SPP South Hub on-peak day-ahead locational marginal price was $115.27/MWh for Aug. 4 delivery, according to SPP data. For comparison, LMPs have averaged about $118.75/MWh so far this month, 152% higher than the August 2021 average.
Looking ahead, SPP South Hub on-peak day-ahead traded around $112.50/MWh for Aug. 5 delivery on the Intercontinental Exchange.
In power forwards, South Hub on-peak August rolled off the curve in the low $120s/MWh, near 157% above where the 2021 contract ended. It saw a package high of about $139/MWh July 18. Down the curve, South Hub September peak is currently in the low $100s/MWh, 141% above where its 2021 counterpart was a year ago, and the October contract is in the upper-$70s/MWh, 112% higher than last year at the same time.
The six-to-10-day outlook indicates a greater probability for above-normal temperatures across the SPP footprint, according to the weather service's Climate Prediction Center.
SPP issues resource advisories when extreme weather, significant outages, wind forecast uncertainty and/or load forecast uncertainty are expected in SPP's reliability coordination service territory, according to the notice. Generation and transmission operators have been provided instructions on applicable procedures, including to report any limitations, fuel shortages or concerns.
Resource advisories do not require the public to conserve energy.