Western Price Survey
April 14, 2017
An abundance of solar generation in early March, when demand is traditionally lower, moved wholesale day-ahead and real-time CAISO power prices into negative territory, according to a new analysis from the U.S. Energy Information Administration.
“In March, during the hours of 8:00 a.m. to 2:00 p.m., system average hourly prices were frequently at or below $0” per MWh, EIA said in an April 7 report. “In contrast, average hourly prices in March 2013-15 during this time of day ranged from $14/MWh to $45/MWh.”
Those prices may also reflect the amount of hydro generation on the grid and suggest “a need for dispatchable generation sources to help cover ramping periods,” the EIA analysis said.
“The generation and pricing patterns that occurred in March and that may continue through the spring highlight some of the issues California grid operators will face in integrating large amounts of solar into their power markets,” the analysis added.
Utility-scale solar-photovoltaic generation contributed roughly 40 percent of the net grid power generated for the CAISO grid between 11 a.m. and 2 p.m. on March 11. This is a time of year when demand is at its annual minimum.
This week, Western power prices rose in abbreviated trading. Markets were closed April 14 in observance of Good Friday.
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Daytime power values gained between $1.10 and $5.85 in Friday-to-Thursday trading. Prices ranged from $21.85/MWh at Mid-Columbia to $34.75/MWh at Palo Verde by April 13.
Off-peak prices also increased, with hubs gaining between $3 and as much as $12.90 in trading. California-Oregon Border saw the greatest gains, up $12.90 to $19/MWh.
Meanwhile, working natural gas in storage was 2,061 Bcf as of April 7, EIA reported. This is a net gain of 10 Bcf versus the previous week.
Henry Hub gas spot values lost 23 cents between April 6 and April 13, ending at $3/MMBtu.
Western natural gas prices generally followed suit, moving between a penny and 10 cents lower in trading. Alberta natural gas proved the exception, adding 8 cents to $2.04/MMBtu.
The EIA’s recently released April Short-Term Energy Outlook forecasts Henry Hub natural gas spot prices to average $3.04/MMBtu for the second quarter of 2017; EIS expects the 2017 average Henry Hub price to be $3.10/MMBtu [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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