Integrating Southwest Power Pool Wind to Southeast Electricity ...

magnitude of the costs are dependent on the modeling assumptions. As such, the absolute cost
values presented should be taken as indicative only with the real emphasis being on the change in
costs between scenarios. Table 5-6 shows total production costs for each region; these are costs
of generation only and therefore do not reflect the fact that one region may be importing while
the other may be exporting. The generation costs include the short run fuel, O&M and start costs,
and do not include any representation of capital expenditures.
Table 5-6: Production costs ($M)
2010 $ Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario
1 proxy
Entergy 4,147 4,214 4,162 4,246 4,093
SBA 9,959 10,301 9,563 8,755 9,904
TVA 6,674 7,135 6,431 6,590 6,679
SPP 9,265 8,290 8,350 8,926 8,329
East SERC 12,303 12,273 12,480 12,505 12,391
West SERC 4,269 4,293 4,539 4,414 4,369
Total Costs 46,618 46,506 45,524 45,435 45,765
Total Costs/MWh 34.37 34.28 33.56 33.49 33.74
The same cost results are shown graphically in Figure 5-8. As expected from the generation and
flow results, the changes are relatively small from scenario to scenario. Entergy and the other
SERC regions not assigned wind can be seen to change very little. SPP as expected decreases in
costs when no longer required to carry all the additional reserve for wind. SBA generation costs
decrease for Scenario 3 and 4 versus Scenario 2, as the region imports more due to the modeled
cheaper units in SPP and Entergy. TVA sees a large increase in generation costs in Scenario 2,
while other scenarios are similar in costs. SPP increases its costs in Scenario 4, as its coal is
increased to be moved to the SBA region, which is assumed to have more expensive modeled
units which are turned off when hurdle rates are removed.
5-12