Weekly Energy Market Updates by Region - Archive




Issue week: October 15th, 2020  (Wk 42)





WEST Whatever the calendar says, this week’s scorching heat in California has kept both the summer and demand alive there. Piling on, baseload supply has fallen by approximately 1,300 MW since unit 1 of the Diablo Canyon Nuclear Power Plant went offline for refueling last weekend, and the quantity of flexible imports remains down by 700 MW because the DC transmission line connecting the Pacific North-west to Southern California remains completely offline until early November. Conse-quently, CAISO has been forced to dispatch old, inefficient natural gas generators, which have driven spot prices up during the nightly ramp. Both temperatures and load are expected to taper off this weekend and provide some relief to Day Ahead prices.

ERCOT  Real-time prices have climbed out of the cellar this week amid some au-tumn heat just when certain units are down for seasonal maintenance. Term prices have also risen as term gas prices have traded higher over the week by $0.05-$0.10/MMBtu out the curve. In addition, the ORDC adder for the month to date is averaging nearly $4.00/MWh, well above both the $3.00/MWh from last October and the paltry $0.70/MWh from October 2018.

EAST Prices remain mostly stable, although yesterday’s trip at Harrison triggered price spikes across PJM and MISO. In HE12, PJM West Hub hit $337/MWh, but DPL, which reached $510/MWh, was definitely hit hardest. Nonetheless, Real Time prices in PJM and MISO are still averaging in the low $20s/MWh for the week.









Although the world’s love affair with renewable energy has been growing for some time and for obvious reasons, not all of its forms get the same love. For example, hydropower has long been the most plentiful source of renewable electricity but may soon yield that distinction to solar power. In fact, the International Energy Agency just dubbed solar “the new king of electricity” in its latest World Energy Outlook. 

The acclaim is due to the substantial improvement in the ability of solar facilities to compete with and beat old “king” coal in pricing. The real game changer is the rapid decline in solar construction costs relative to those of other resources, as shown in the graph below from the U.S. Energy Information Administration. 

Moreover, solar power is poised to grow only more powerful. Improvements in battery technology continue to help large-scale solar panel installations, and, in the U.S., FERC Order 2222 will only incentivize the proliferation of smaller-scale solar aggregation as well. In turn, because such microgrids can be located closer to areas with less generation, congestion costs should fall. 

Of course, this and other emergent technologies are currently un-able to meet capacity requirements on their own, so their growth runs the risk of increasing capacity costs as the more dispatchable types of resources increasingly go offline. Nonetheless, as the solar revolution makes clear, renewables themselves are becoming more cost-effective and should drive electricity prices down in the long term, but growth in their supporting technologies is key to limiting price volatility. Ever on alert, Calpine Energy Solutions will always be ready to take advantage of the latest innovations to help companies limit their exposure.




Previous Weekly Market Reports: Archive


Disclaimer: This report is for informational purposes only and all actions and judgments taken in response to it are recipient’s sole responsibility. Champion Energy Services does not guaranty its accuracy. This reports is provided ‘as is’. Champion Energy Services makes no expressed or implied representations or warranties of any kind. Except as otherwise indicated in this report, this report shall remain the sole and exclusive property of Champion Energy Services and shall be free from any claim or right, license, title or interest. Champion Energy Services shall not be liable for any direct, indirect, incidental, consequential, special or exemplary damages or lost profit resulting from this report.