SPP has seen a 16% drop in coal-fired generation over the last two years, thanks in no small part to consistently low gas prices.

The SPP Market Monitoring Unit’s quarterly market report for September-November said coal-fired resources accounted for 52.1% of generation in the fall of 2015, compared to 62.7% in 2013, the last few months of SPP’s energy imbalance services market.

The Monitor noted the decline in coal generation has been offset by increases in wind (up 3.7%), nuclear (up 3.4%) and combined cycle generation (up 3.3%). Hydro generation increased 2.1% over the two-year period, primarily because of the addition of the Western Area Power Administration-Upper Great Plains.

According to the report, Panhandle Hub gas costs averaged $2/MMBtu in November. Average gas prices for the fall were $2.25/MMBtu, compared to $3.76/MMBtu in 2014.

Average LMPs for both the real-time balancing market and the day-ahead market also saw significant declines. Real-time LMPs averaged $20.73/MWh (-$8.84 from fall 2014) and day-ahead LMPs averaged $19.98/MWh (-$8.19).

Lower prices were “prevalent in the north due to less expensive generation” and in the west-central due to the area’s “abundant low-cost wind,” the report said.

The MMU said SPP is experiencing divergence between day-ahead and real-time prices, partially because of “significant price volatility” in the real-time market.

— Tom Kleckner