Cold Weather, Historic Nodal Power Market Events February 2021

Market prices in ERCOT have hit the market cap and prices in SPP have skyrocketed to the tens of thousands of dollars per megawatt-hour.  Winter weather advisories are in effect for nearly half of the United States.  With cold weather lasting through the middle of the week, it looks to be an extremely harrowing week in North American power markets.  Yes Energy customers can see this all happening live in QuickSignals with real-time monitoring and alerts. In this blog, we’ll cover what’s happening in ERCOT and SPP today. 

ERCOT is looking particularly impressive from a market perspective today.  At 1:25 AM, CPT ERCOT issued an Energy Emergency Alert (EEA) level 3 communication after their reserves dropped below 1,000 MWs with little chance of recovering within half an hour. 

EEA level 3 is the highest emergency level in ERCOT.  The alert is issued when the Physical Responsive Capability (PRC) drops below 1,000 MWs and is not expected to recover in half an hour OR system frequency drops below 59.91.  The frequency fell to 59.31 at 1:55 AM this morning, so in addition to the PRC dropping below 1,000 MWs, ERCOT breached the frequency limit as well.  

An EEA level 3 calls for rolling blackouts.  Generating units of all fuel types have tripped offline due to the weather, and 30,000 MWs of generation were forced off the system.  ERCOT prices have hovered around $9,000, roughly the theoretical limit.  In the analysis below, you can see the relationship between price, load, and PRC across this February and February of years prior.

But wait, there’s more... here comes SPP. At 10:08 AM CST this morning SPP also declared an EEA level 3. Load in the ISO has exceeded the available generation. Following the EEA level 3 declaration SPP began utilizing reserve energy. These reserves were then exhausted and member utilities have been directed to employ rolling blackouts.

At 12:07 PM CST SPP’s Area Control Error (ACE) dropped to -1267.61.  Shortly after that, SPP pricing reached $50,000/ MW*, hitting the Violation Relaxation Limits (VRL) curve for system-wide energy imbalance.  SPP utilizes the typical offer curve, the scarcity demand curve, and lastly, the VRL curve.  SPP runs the curves in succession, and when the ISO is unable to balance the system by employing one curve, they apply the scarcity curve and then the VRL curve.  The next stop on the VRL curve is $100,000 / MW.   In the analysis below, you can see the relationship between price, load, and offline capacity across this February and February of years prior.

*SPP has confirmed they will be re-pricing some of the intervals

Yes Energy has all the data you need to perform your analyses on the security and impact of these events, and the relationship between price and load.  Click here for more information about how our product suite can help during events like these!

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