Weekly Energy Market Updates by Region - Archive




Issue week: January 28th, 2021  (Wk 4)





WESTHistorically strong natural gas stockpiles and robust spot hydro generation have blunted the impact of the cold weather from last weekend and the beginning of the week on spot prices. Over the past seven days, Day Ahead prices have averaged $32/MWh in CAISO and $23/MWh in Mid-C. In the term market, forward prices moved higher after CAISO proposed to raise the offer cap from $1,000/MWh to $2,000/MWh beginning this June.

ERCOT  Real-time prices have fallen since last week, averaging in the low $20s/MWh across all load zones as temperatures have risen across Texas this week. Forward prices, on the other hand, have increased. With the con-tinued uptick in forward NG prices and in summer heat rates, forward CY strips are up by $0.75-$1.00/MWh down the curve since last week. Although term prices have escaped their three-year lows of a few weeks ago, these forward CY 7x24 strips remain attractive at prices well below $30/MWh.

EAST Day Ahead and Real Time prices have held steady this week in MISO, NYISO, and PJM, but ISO-NE has shown some volatility after Real Time prices spiked Sunday evening to raise Real Time averages across its various zones. In Mass Hub, Real Time is averaging $48/MWh with a DART spread close to $6/MWh above Day Ahead.









Renewable generation continues to be the “alpha” in ongoing debates over how to modernize the country’s electric grids, but the “omega” of transmission cannot be overlooked. After all, to be constructed in enough volume to make a meaningful impact, renewable-energy facilities have tended to be located far from the regions that need or want them, so the necessity of moving those green electrons from generator to consumer speaks for itself. Newly appointed FERC Chairman Richard Glick certainly recognizes the importance of improving transmission policy to help states achieve their renewable-energy goals.

Of course, any discussion of improvements in the nation’s electricity transmission is bound to address costs. Many utilities have already had to raise their transmission rates over the last few years to provide needed upgrades to their grids, and that need will only increase as the green makeover expands. Indeed, the graph below from the U.S. Energy Information Administration shows that, whereas generation costs are expected to drop for decades to come, transmission costs are expected to continue to grow during that time.

As the new FERC carries out the new administration’s mission to remake the U.S. energy industry, further modernization of its transmission infrastructure may be mandated. Fortunately, Calpine Energy Solutions knows how best to accommodate this increasingly important risk factor in its customers’ energy purchases.




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