The Rocky Mountain Institute’s (RMI) Business Renewables Center, a nonprofit helping corporations buy renewable energy, has released a report highlighting the rise of wind energy for corporate purchasers in the Southwest Power Pool (SPP).
According to Anthony Teixeira, senior associate at RMI and author of the report, due to “low costs and improving technology,” wind energy has seen “dramatic” growth in the past decade throughout Texas and the Midwest.
“As grid operators have increased transmission investment and improved market structures,” he explains, “they are supercharging the market for wind power – to the benefit of corporate buyers who choose to transact in areas like SPP.”
The report, entitled “Transmission Investments Affect the Value of Your Wind PPA,” covers trends in corporate wind power purchase agreements (PPAs) for Central Plains states and highlights opportunities in the SPP.
According to the report, the Great Plains states have “long been a leader” for wind power – e.g., in 2014, 41% of the U.S.’ total wind generation came from this region. In turn, says RMI, “corporate PPAs have followed suit.”
“Two-thirds of corporate wind PPA volume has been in the plains, with Texas accounting for the vast majority of transactions through 2014,” the report states. “However, states further north – most significantly Oklahoma and Kansas – experienced increasing PPA activity in 2015 and 2016.”
In addition, the number of wind PPAs signed in SPP in 2015 alone was more than double the number of wind PPAs signed from 2008-2014. And despite a drop in numbers last year, the wind PPA volume was, nonetheless, higher than that of 2008-2014, as well.
“Transmission infrastructure improvements, falling capital costs and electricity market restructuring implemented by the SPP … resulted in a more favorable environment for both wind development and corporate PPAs,” the report says.
From 2012 through 2014, SPP spent $819 million on transmission projects, according to the report.
Noting the importance of these statistics, the report concludes, “Corporations considering PPAs in the Southwest Power Pool will be impacted by changes in congestion and curtailment patterns. Careful analysis of the risks will be critical, as historical analysis alone may not capture the effects of emerging trends.”
Read the full RMI report here.