Weekly Energy Market Updates by Region - Archive




Issue week: January 7th, 2021  (Wk 1)





WEST In the index market, strong rains pushed hydro generation in the Pacific North-west above average over December and suppressed Day Ahead prices in Mid-C. In contrast, very high price signals in the Desert Southwest have elevated term prices.

ERCOT  With relatively mild weather, pretty robust wind generation, and peak loads of only 45,000 MW in the first week of 2021, real-time prices are averaging a soft $16/MWh to start the year. Real-time congestion has also been minimal in all load zones except the South, where basis is averaging around $1/MWh for the week. Real-time prices should rise next week as wind generation is expected to fall while peak loads are expected to rise around 55,000 MW amid colder weather and wintry precipitation looming in the forecast for North and West Texas, although the ade-quate reserves should keep any increase in check. On the other hand, term prices have been rather strong to start the year. Boosted by prices for the corresponding NG strip, the CY21 strip is up by approximately $1/MWh for the week. CY strips be-yond 2021 are also higher, albeit only by $0.25-$0.50/MWh. Nonetheless, despite this bounce, the CY strips are still near their lows for the last three years.

EAST This week, most prices have settled in the $20s/MWh to low $30s/MWh, down from the highs of mid-December. In PJM’s West Hub, Day Ahead prices are averag-ing $23/MWh while Real Time is averaging $25/MWh. Prices are slightly higher over in ISO-NE’s Mass Hub, where Day Ahead is averaging $30/MWh and Real Time is averaging $33/MWh.







In November 2008, then President Elect Obama’s incoming chief of staff, Rahm Emanuel, said in an interview, “Never let a crisis go to waste. They are opportunities to do big things.” He was alluding to the incoming Democratic administration’s policy for economic recovery from the 2008-09 recession, but, ever since Winston Churchill first made a similar comment in the mid-1940s at the height of World War II, politicians across the ideo-logical spectrum have embraced the same sentiment for di-verse purposes. President Elect Joe Biden is certainly taking it to heart with his proposal to spend $2 trillion over the next four years to advance his energy policy agenda, which comprise two main themes: de-carbonization and re-regulation.

Biden’s plan is chock full of proposals to reduce carbon emissions in the power and transportation sectors significantly. He is aiming for net zero CO2 emissions from electric generators by 2035 through a dramatic expansion of wind and solar generation and major investments in battery storage and new trans-mission lines. To curb emissions in the transportation industry, he has endorsed not only widespread electrification of the na-tion’s vehicle fleet but also a massive proliferation of public charging stations to support it. Biden’s carbon-free ambitions also extend to manufacturing. He has expressed a desire to overhaul emissions-heavy industries—such as steel, concrete, and chemicals—and boost funding for research on low-carbon manufacturing.

When it comes to regulation, Biden has made no secret of his desire to rein in the oil and gas sector with a moratorium on new drilling on federal lands, stricter standards for permitting new wells, and tighter restrictions on methane emissions. Energy efficiency is another key objective of his: net zero emissions for all new buildings by 2030 and a massive efficiency retrofit for public buildings and households within five years. Reviving key international energy initiatives and reorganizing the U.S. government’s environmental entities round out Biden’s energy policy agenda.

To be sure, these are bold aspirations intended to improve the profile of the U.S. economy as a leader in environmental stewardship, and Biden will be able to realize some of them through executive orders. However, others will require legislation, and, although Democrats will control the executive branch, they will have their thinnest margin of control in the House since 1943 at 222-212 and will need Vice President Kamala Harris to break any ties in the new 50-50 Senate.




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