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| Thursday Aug 29, 2024 | |
| The underwhelming prices in ERCOT have been a frequent topic of conversation so far this summer, as even with new records reached in load and net load the day-ahead and real-time settlements have failed to live up to the hype. We have written about the supply components on the renewable side and how that has played out in price formation in our recent Special Report, “A Different Summer in ERCOT”, while recent market flashes have touched on the recurring underperformance of load relative to day-ahead forecasts this summer. Our latest Battery Report, “Clouds on the Horizon for ERCOT Batteries?” walks through the battery revenues in ERCOT this summer compared to 2023 and how bullish and optimistic expectations from earlier this year in the spring have ... » read more | |
| Wednesday Aug 28, 2024 | |
| In our blog last week, we wrote about the CAISO and ERCOT battery fleets breaking all-time dispatch records this August. This might make you think there were impressive arbitrage opportunities on those days, incentivizing more batteries to take advantage. This was certainly part of the story in Texas when real-time prices exceeded $1000/MWh. However, the real-time arbitrage opportunities for CAISO batteries weren’t exceptional on August 14th when the record was broken, although they were higher than other opportunities this August. In our latest battery report, titled ‘CAISO Fleet Growing Pains’, we discuss the conditions of the day and of August so far. Keep reading for a preview of the report or click the link above for access to the full writing. Figure 1 | Price ... » read more | |
| Tuesday Aug 27, 2024 | |
| Solar energy capacity in the Midcontinent Independent System Operator (MISO) region has seen explosive growth in 2024, nearly doubling its output to 6 GW early in Spring this year, increasing further over the summer. This rapid expansion is significantly influencing intra-day balancing and price formation, similar to trends previously observed in the Lone Star State. Despite solar being a smaller portion of MISO's energy mix compared to other regions like ERCOT and CAISO, its impact on the grid is becoming increasingly pronounced. Figure 1 | MISO 12x24 Profile Our Renewable Monthly Reports (sample) detail the changes to solar, wind, and battery operations and performance not just in MISO, but markets across the country. Sign up for our Platinum Plus eCommerce package to receive access to ... » read more | |
| Monday Aug 26, 2024 | |
| This weekend brought CAISO’s power prices lower than any day since June 16th (Father’s Day) with flat power settles going as low as $14.24 in SP15. While summer certainly isn’t over, fall is creeping up on us. The story is familiar from spring when SP15 hit deeply negative prices. Again this weekend, SP15 prices went negative as long as the sun was out, and evening ramp pricing stayed low as hydro, batteries, wind, and transmission had plenty of cheap MWs to provide before thermal generators needed to be turned to. This weekend gives us a reminder of the bearish territory CAISO power markets sit in as soon as the heat fades away. Figure 1 | CAISO Hourly Power LMP The above chart shows the hourly power pricing in both CAISO regions. Note the extended block of hours when ... » read more | |
| Friday Aug 23, 2024 | |
| Dam-generated hydro occupies a strange niche. To characterize it briefly, it has the combination of being simultaneously part dispatchable, part baseload, intermittent, the single largest source of generation in the Northwest, and the subject of controversy among people that on both sides are largely motivated to make environmentally conscious decisions. Broadly speaking, fuel resources may be grouped into two basic categories to describe the roles they fill in the ecology of the energy sector – dispatchable and non-dispatchable. In the dispatchable camp, we have coal and natural gas, which can essentially be turned on and off whenever needed (barring some constraints like minimum up time, minimum down time, etc.). In the non-dispatchable camp, we have resources like wind, solar ... » read more | |
| Thursday Aug 22, 2024 | |
| For all the talk during the spring and leading up to the summer about ERCOT’s vaunted load growth and fears about the potential for serious market tightness, what has actually played out over the past several months has been mostly benign. Even over the past few days as ERCOT has flirted with new record highs in net load, the price impact was underwhelming: daily average real-time prices peaked at a little over $200, the highest so far this summer by a significant margin. This is shown clearly on the figure below, which compares daily average North Hub real-time prices for the summer months (June to September) in 2023 (top pane) and 2024 (bottom pane), with the monthly average price marked by a reference line. In June 2024, the average price was ... » read more | |
| Wednesday Aug 21, 2024 | |
| We were starting to sound like a broken record this spring writing about the CAISO battery fleet breaking records for dispatch. At the start of 2024, the fleet had discharged less than 5.5 GW at one time. In Q2 of 2024, the fleet really started to ramp up as midday prices were extremely low and arbitrage opportunities were high. The record for dispatch was broken eight times in three months. July was a bit of a dry spell for record-breaking. We’ve written recently about some of the reasons why it hasn’t been the greatest environment for the CAISO fleet (check out the article ‘The Timing of It All’). However, last week broke the spell and the record for the CAISO fleet’s dispatch now stands at 8.3 GW, reflecting not only the conditions of that day, but also ... » read more | |
| Tuesday Aug 20, 2024 | |
| As summer draws to a close, the energy industry is shifting focus from the high-demand summer season to the upcoming shoulder season, particularly in anticipation of nuclear outages. These outages, necessary for routine maintenance and refueling of nuclear plants, occur every 18 to 24 months and are typically scheduled during periods of lower demand, such as fall and spring (the shoulder months). This shift requires other energy sources, primarily natural gas, to compensate for the temporary loss of nuclear power, making it crucial to understand the implications for power burns this fall. To forecast what lies ahead for fall 2024, historical data on nuclear outages is essential. Given the 18 and 24-month cycles, a look back at the outages from six years ago, particularly fall 2018 ... » read more | |
| Monday Aug 19, 2024 | |
| This August has brough a stretch of cool weather to the West, a welcome break from a record-breaking July. The below figure shows how recent temperatures in the Pacific region compare with the historical norm. Due to a shifting baseline, we use the five-year daily average to set normal values. The rightmost cells represent the most recent forecast values. We sit now in the middle of a sustained run of lower-than-average temperatures, the longest continuous stretch since the end of May. When we reflect on how this summer has played out it is obvious that the unprecedented heat has not been matched by wholesale electricity markets which have held below past years, even in some of the hottest stretches. So, if extreme heat has not produced extreme prices, what has been the result of cool ... » read more | |
| Friday Aug 16, 2024 | |
| One metric that we wind up looking at a lot in our work is capture ratio—that is, the generation-weighted value of a power-producing resource over some time period, relative to the simple average power price over that same time period. If a generator is routinely outputting energy when the price is higher than average, its capture ratio will be greater than 100%; if its generation is skewed more towards intervals with lower-than-average prices, its capture ratio will be less than 100%. A really common application of capture ratio is to contextualize the dollars-per-megawatt-hour value of a solar or wind resource. In prior writing, we’ve gone in-depth on solar and wind capture ratios and the impact that increasing RE buildout has on those resources’ value. But in this ... » read more | |