Weekly Energy Market Updates by Region - Archive




Issue week: June 3rd, 2021  (Wk 22)





WEST  Over the course of May, below-average hydro generation and above-average demand drove historically high Day Ahead prices in NP15 and Mid-C. This week, the forward market has been strong because of very strong Day Ahead prices plus forecasts of above-normal temperatures. The strength of Bal-2021 prices has rubbed off on term prices out the curve for 2022 and beyond across all West Coast hubs.

ERCOT  The average for 7x24 real-time prices has stayed under $20/MWh this week. Despite average temperatures in the mid-90s across the state and a projected peak load well over 70 GW, the actual peak load for the week was just under 68 GW. Consequently, summer 2020 on-peak prices dropped from approximately $127/MWh to $115/MWh. The prompt 12-month 7x24 forward curve also sank by $1.50/MWh from last week, but the outer years down the curve have remained relatively flat.

EAST Prices have tapered off a bit from last week’s slight increase. In other news, PJM, in its 2022/23 capacity auction, was able to procure resources at $50/MW-day, which reflects a tremendous 64% decrease from the 2021/22 auction. PJM attributes the lower auction price to a lower load forecast and reserve requirement, which reduce not only the amount of capacity needed but also estimated costs for building new generators and, ultimately, prices from participating resources.








Summer being right around the corner, now is an ideal time for businesses in the Midwest and Northeast to avail themselves of Calpine Energy Solutions’ Capacity Obligation Re-duction Effort (CORE) program. A completely voluntary program that runs every June 1 through September 30 (July 1 through August 31 in NYISO), CORE can help companies save money on their capacity costs in MISO, PJM, NYISO, and ISO-NE for next year.

A consumer’s capacity charges in those regions are a function of not only local capacity auction clearing prices but also the consumer’s peak load contribution (PLC), effectively its share of the total system load during the peak-load hour of the peak-load day of the preceding year. (PJM actually considers the peak-load hour of each of the five highest peak-load days of the previous year.) Therefore, if a company can lower its PLC, the resulting reduction in capacity costs will be reflected in its electricity invoices for the next planning year.

Calpine Energy Solutions’ CORE team helps customers maximize their opportunities for such savings by using its sophisticated forecasting system to notify them of potential peak-load days, sometimes several days in advance. Each notification suggests a specif-ic date and hours for power curtailment, tailored to each customer’s unique circumstanc-es. With the CORE team’s expert insight, a customer can then curtail its energy use how-ever it sees fit, whether by turning some lights off, raising the thermostat setting, or shift-ing production outside peak hours. Then, after the ISOs publish their system peaks, Cal-pine Energy Solutions, for those customers that would like it, will issue a “SCORE Card” like the following, which provides an estimate of the annual capacity savings achieved:





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