WEST At the end of November, mild temperatures fostered mediocre demand while strong precipitation in the Pacific Northwest increased hydro generation. Together, these factors limited volatility in the spot market; Day Ahead prices averaged around $35/MWh in CAISO and $25/MWh in Mid-C over the last two weeks. In the term market, Calendar Year 2021 dropped over the course of November because of revised long-term forecasts projecting mild temperatures throughout California this winter. Nonetheless, forward prices remain elevated as the market is still pricing in a “fear premium” in preparation for extreme temperatures not only in the winter but also during next summer.
ERCOT Over the last week, real-time 7x24 real-time prices have stayed relatively cheap in the low $20s/MWh. However, whereas congestion in the other zones has been minimal, basis in the West Load Zone remains extremely volatile, averaging $25/MWh over the past week to yield a much higher real-time average of approximately $45/MWh. Forward prices, on the other hand, have been extremely volatile over the past week. Additionally, after a recent consultant report expressed a bearish outlook on prices in light of the many new renewable-energy facilities expected to come online over the next few years, CY21 7x24 forward prices have decreased by roughly $3/MWh (10%) from last week while CY strips further down the curve have fallen by $0.50-$1.00/MWh.
EAST Prices remain low to start December. The largest DART spread this week was in ISO-NE, where RT was about $4/MWh below DA in Mass Hub. The lower RT prices there were the byproduct of weak RT load, strong wind generation, and plentiful imports but nothing out of the ordinary. Both DA and RT have averaged in the low $20s/MWh this week in the other main regional hubs.