Deep Dive: Who’s Afraid of SPP?

In February, the Southwest Power Pool proposed a new capacity accreditation rubric to improve its reliability. Like other RTOs, SPP sent this new rubric to the Federal Energy Regulatory Commission in response to Winter Storm Uri 2021, which blacked out Texas. SPP wanted their capacity accreditation—the way the grid operator measures and values a given resource’s ability to meet demand at any given time—to more closely reflect reality and to both reward the reliable power plants for their performance in times of great need and punish those that don’t show up.

But this week, several renewable energy trade groups and environmental organizations filed complaints with FERC about SPP’s proposal—we mentioned this in Wednesday’s “What’s Keeping the Lights On?”. Today, we’re going to dive into what SPP’s proposing, what these group are critiquing, and weigh the merits of each. This spat between these groups and SPP reveals not just how our complex power markets work, but the internecine politics and political assumptions that inflect their operations.

So, let’s start with SPP’s capacity accreditation proposal. SPP wants to adopt two different accreditation methodologies. The is first called “effective load carrying capability” (ELCC), and is meant for renewable energy and storage resources. The second, called performance-based accreditation (PBA), is meant for thermal generators and other conventional resources, like hydropower.

In other words, SPP feels that it needs to adopt two different ways to measure what different kinds of power generators bring to the grid. SPP explains that this rationale stems from a common experience in American power markets: load growth and the influx of renewable energy resources onto the grid. “As SPP has learned,” it reads in the grid operator’s FERC filing, “its existing accreditation methods for both variable energy resources and conventional resources do not fully and accurately reflect the actual performance of such resources and their true contribution to reliability and resource adequacy.”

This makes sense on the face of it. Wind, solar, and batteries are fundamentally different from thermal and other sources because renewables and storage are not dispatchable (you can’t turn them on when you need them) and intermittent (you are not certain when they will produce power or how much). So, renewables are judged via ELCC, a probabilistic model that measures their ability to produce power when the grid is mostly like to see shortfalls in electricity production. And traditional power resources are judged via PBA which uses “an analysis that considers demand equivalent forced outage rates (“EFORd”) during times resources are needed in the relevant season.”

What could be wrong with SPP’s approach?

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