The Southwest Power Pool could need up to $263 billion in generation investments in order to support load growth through 2050 — but despite the sizeable investment, should still be able to maintain resource adequacy “in a cost-effective and affordable fashion,” The Brattle Group concluded in a report being presented to stakeholders today.
The Future Energy & Resource Needs Study is SPP’s effort to assess how energy supply costs and resiliency efforts may change over the next quarter century. The grid operator is headquartered in Arkansas and serves 14 states in the Midwest and West.
By 2050, SPP will need 20 GW to 48 GW of new wind generation and 42 GW to 130 GW of new solar generation. As solar generation expands, 22 GW to 59 GW of battery storage “is projected to be cost effective (and often co-located) to maintain resource adequacy,” the report said.
“This is possible without significant rate increases (in inflation-adjusted terms) due to load growth and fuel cost savings, especially if federal tax credits (or similar renewable generation support) remain available,” the report said.
Brattle analysts will present the findings today to a joint meeting of SPP’s Consolidated Planning Process Task Force, Economic Studies Working Group and Transmission Working Group.
The FERNS analysis found a projected $88 billion to $263 billion of generation investments will be required, depending on load growth scenarios and the mix of generation and energy storage additions. Fossil fuel-based generation will need to be retained or replaced in order to affordably maintain reliability, the report said.
SPP generated 47% of its electricity from carbon-free resources in 2024, according to Brattle, and could hit 70% to 90% renewables by 2050, the firm said. There will still be a place for fossil fuel generation, however.
“Conventional generation is expected to continue to serve a large share of SPP’s resource adequacy needs, representing 40–60% of the region’s accredited capacity,” Brattle concluded in a presentation of its findings. “This is a function of technology costs, natural gas prices, and the availability of tax credits (or similar policies).”
Brattle’s analysis also found that SPP’s resource adequacy challenges will evolve over time, to become more frequent during winter months and in early evening hours after sunset.
“This implies that winter planning reserve margins will need to be significantly higher than summer reserve margins, due to low solar capacity values and high temperature-correlated fossil outages in the winter,” the FERNS report concluded.
