We have developed a fundamentals-based Production Cost Model (PCM) for the WECC that provides 20+ years of hourly price forecasts at trading hubs and zones.  The forecast can be used for resource valuation, resource adequacy and policy making decisions and our newly offered WECC Market Report includes a full discussion of market drivers, policy implications, price trends, and input uncertainties.

One of the key drivers of our forecast is a modeling decision around how much capacity is added to the grid over the next 20+ years.  To meet clean energy policy goals the amount of capacity far exceeds anything that has been added to the WECC in recent years by close to 2X.  Making decisions on what is going to happen is difficult and impactful to the model outcomes.  Take for example, if the volume on display in the dataset mentioned above is utilized, the annual round the clock (RTC) power prices are lowered substantially compared to the forward curve, not to mention the solar capture ratio.  This is why we comb through the data and rank each project on their viability of being built (realistic approach) as it gives a more realistic view of the grid's capacity and is a key component to the model inputs that serve as the foundation for the (price) outcomes.

Figure 1 | Historical Capacity Additions by Region in the WECC as of the EIA 860M released in May 2025. 

The figure above presents the historical capacity additions for each major region (Pacific Northwest, Rockies, California ISO, and the Desert Southwest) in the WECC as of the April EIA 860M which was released on May 22^nd 2025.  So far in 2025, the capacity additions have been dominated by storage and solar additions in the PNW, DSW and CAISO where wind capacity additions have led the way in the Rockies.  The total amount of additional capacity year to date (April) is 3,823 MW, which is just shy of the 4,269 MW seen last year over the same period.

Recent political news and policy from the Trump administration will have interesting effects further out on the curve as many current additions in 2025 already have off-take, EPC, and financing lined up. The EIA is calling for 15,700 MW of new capacity in 2025 with nearly 13,000 MW that is either under construction or has construction complete. Monitoring the policy decisions coming out of Washington DC is going to be essential and instrumental in determining the capacity volume that will be hitting the grid starting in 2026 and beyond.  For example, in years past, we have seen policy accelerate construction (tax credit deadlines for example) while global supply slowed things down coming out of the Covid period. Compliance obligations will always bring buyers to the table while it is still up in the air on how the data center demand revolution handles their green initiative goals under the current administration.  In a recent piece of content (Special Report: California ‘Next’), which is part of the either the Insight or Professional packages offered to individuals via our eCommerce platform, we discuss the impact of such load growth tied to California and what it means for capacity growth in the coming years (we offer multiple licenses subscriptions, if interested email us using the link provided).

If you would like to learn more about or have interest in the long-term Energy GPS Product Cost Modeling (PCM) in the West, one can reach out to us via the Contact Us section on our website (under About Us) or email us directly at [email protected].