Market Intel
SPP
SPP
Market Overview
Southwest Power Pool (SPP) is a Regional Transmission Organization (RTO) responsible for ensuring reliable power supplies, adequate transmission infrastructure, and competitive wholesale electricity prices for 14 U.S. states, serving ~18M people.
SPP is in the early stages of integrating energy storage, but with rapid load growth and high renewable generation penetration, we will continue to see the market evolve.

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6GW
Load growth expected by 2029 -
34%
Wind generation capacity accounts for 34% of installed nameplate capacity -
56GW
2023 peak demand was 56GW
SPP’s interconnection queue is heavily renewable-focused, with 126 GW of renewable projects in development (93% of the total queue). This dynamic increases opportunities for energy storage to address renewable intermittency and grid reliability issues.
Market Structure
SPP is one of the most interconnected markets, with connection to MISO, ERCOT, and WEC.
It also manages Western Energy Imbalance Service (WEIS), where they dispatch energy from participating resources throughout the region every five minutes, enhancing both the reliability and affordability of electricity delivery from utilities to their customers. However, the 12 members of WEIS will be incorporated into SPP in 2026, WEIS will be phased out thereafter.
SPP is also in the process of developing Markets+, to offer enhanced regional energy trading opportunities in the Western Interconnection.
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Maintains reliability and manages the market to balance energy demand with supply.
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The intermediary between energy storage operators and the SPP Integrated Marketplace. Scheduling Coordinators submit day-ahead and real-time bids for energy, ancillary services, and capacity on behalf of storage operators while managing market settlements and compliance with SPP protocols.
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A platform tailored for energy storage. Optimizers analyze real-time market conditions, dispatch schedules, and grid requirements to maximize revenues through precise bidding strategies and state-of-charge (SOC) management, ensuring efficient integration with SPP’s market.
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Utilities and other organizations that procure energy to serve retail customers. They coordinate with storage operators to meet local demand, often leveraging storage for peak load management and reliability.
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Local, publicly owned utilities operating within SPP’s footprint. These utilities may integrate storage as part of their broader energy strategy, supporting grid reliability and renewable energy adoption for their communities.
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Companies developing and operating energy storage projects. IPPs navigate the SPP market to bid their storage assets for energy arbitrage, regulation, and reserve services.
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These participants aggregate and represent demand response or storage resources for market participation. CSPs may partner with storage operators to offer flexible load reduction or ancillary services.
Interestingly, as of 2023, IOUs accounted for 11% of the market but own 48% of generation capacity. IPPs, on the other hand, account for 58% of market participants but only account for ~19% of nameplate capacity.
Storage assets must register as a Market Storage Resource (MSR), which is modeled as a generator and may provide all market products.
MSR must provide 0.1 MW for at least one hour to be eligible for any product in SPP Integrated Marketplace and must also provide derated one-hour capacity value
Market Products
SPP operates several markets and strives to find the lowest cost way to meet energy demand.
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Energy
Bidding into energy products can see high returns from energy arbitrage, and provides flexibility to lock in returns through the Day-Ahead Energy Market, or capture sudden price spikes in the Real-Time Energy Market.
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Ancillary Services (AS)
This almost acts as offering insurance to the grid. You will get a payment for holding capacity, or offering to scale down generation, in moments where there is a mismatch between supply and demand. Bidding into AS can yield consistent returns, and can deliver outsized revenue during scarcity events.
SPP does not have a capacity market, however, LSEs must procure capacity to meet SPP’s Planning Reserve Margin (PRM) obligations. Energy storage can be a smart way to meet these obligations – whether utilities own the assets directly or contract out for the capacity. Minimum capacity was recently increased for summer and winter seasons:
- Summer: 16% PRM (2026)
- Winter: 36% PRM (2026/2027)
Battery energy storage systems (BESS) seem poised to benefit as they can provide the required reliability and allow utilities to reach the desired PRM.
— ICF, February 2024
Stoarge Opportunities
ESRs can tap into a variety of revenue opportunities in SPP by leveraging their flexibility, fast response times, and ability to optimize operations across market products. Furthermore, with the generation mix changing and market rules evolving, this opportunity only stands to grow.
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Increasing volatility & opportunities for energy arbitrage
Increasing volatility & opportunities for energy arbitrage
The shift to renewable generation has introduced significant price volatility in SPP. In 2023, wind generation accounted for 37% of total electricity production, often driving prices into negative territory during high wind output. This creates regular arbitrage opportunities for storage resources. This only stands to increase in coming years as- Aging fleet continues to retire (86% of coal plants and 42% of gas plants are over 30 years old)
- 135GW of the interconnection queue is renewable generation assets.
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Resources Adequacy Issues
SPP faces mounting resource adequacy (RA) challenges due to the increase in intermittent resources, and increasingly harsh winter weather. With increasing RA requirements, batteries will be needed – and get paid to – ensure reliability.
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Congestion Management
Transmission congestion is a growing issue in SPP, particularly near rapidly expanding clusters of data centers. This congestion drives higher day-ahead (DA) and real-time (RT) market prices in these zones. ESRs strategically placed near high congestion areas stand to capture high Locational Marginal Prices (LMPs).
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Complement renewable generation
SPP’s interconnection process is long – and renewable generation assets account for 126GW of the 135GW queue as of 2023. Batteries co-located with renewable projects can improve project economics by reducing exposure to curtailment risks, and shifting energy dispatch into higher priced hours.
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Make-Whole Payments
SPP offers additional payments that supplements a resource’s revenue if prices fall below its cleared offer. This can de-risk participation.
Maximizing these opportunities – and therefore project outcomes – requires strategic planning and proactive day-to-day optimization. Energy storage operations benefit significantly from automated trading platforms and optimization software that reduce manual decision making and maximize asset participation across market products.
State-Level Indicators
In addition to federal regulations and regional market rules, state-level policies play an important role in shaping the deployment and operation of energy storage in SPP.
Many states are still developing their perspective on how energy storage will be critical to ensuring RA and grid reliability. It is likely this will result in new incentives down the line.
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Currently has tax credits and incentives for renewable generation and energy storage projects, and has begun discussions on energy storage as a tool for grid reliability and resilience.
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Offers grants and incentives for energy storage through the Colorado Clean Energy Fund.
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Energy Storage Tax Credit Program provides rebates for energy storage technologies.
Operating live assets
Day-in-the-life of an operator
Recent Regulatory Changes
SPP and stakeholders have submitted a new Effective Load Carrying Capability (ELCC) accreditation methodology for wind, solar, and energy storage resources:
- Based on the amount of incremental load a resource can reliably serve
- ELCC reform may impact market eligibility or accreditation for smaller vs. larger battery systems.
Winter PRM Proposal: SPP is revising its winter reliability framework for FERC approval, enhancing battery opportunities for reliability services.
SPP continues to refine its market rules, including mechanisms like make-whole payments, which compensate resources if market prices fall below their cleared offers
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