Western Price Survey
October 16, 2015
Spot and futures prices for both natural gas and electricity "generally reflect market expectations for a relatively well-supplied winter," FERC said in its 2015-2016 Winter Energy Market Assessment, released Oct. 15.
FERC noted, however, that Cal-ISO has steep demand ramps in the winter -- one in the morning and the other in the evening. The evening ramp is pronounced in December, stemming from the increased use of holiday lights. As the holiday lights come on and solar ramps down, the ramping effect is compounded.
"The winter 3-hour ramp requirement climbed to a maximum of 9,131 MW in winter 2014-15, from 6,247 MW in 2011-12, and this winter could be the highest ever on the CAISO system," FERC stated.
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Typically, the grid relies on natural gas power for ramping, but that can trigger problems. In the winter of 2013-2014, for instance, Cal-ISO and Southern California Gas encountered problems serving natural gas demand, in part because SoCal Gas lacked tools to deal with low-pressure situations, FERC said.
A similar situation occurred again this summer. Maintenance on the SoCal Gas system, record natural gas generation dispatch, and lower solar production due to cloud cover meant SoCal Gas could not serve all its natural gas demand.
This week, the hotter-than-normal weather in Southern California triggered a grid warning Oct. 13. This was the result of "about 1,000 MW of unexpected generation outages combined with hotter than forecasted temperatures that drove demand much higher than expected," said Cal-ISO spokesman Steven Greenlee. There was also congestion on Path 15 that limited imports, causing Cal-ISO to ask for ancillary-services bids and to encourage conservation.
Demand peaked on the Cal-ISO grid at 41,610 MW Oct. 13, which should be the week's high. Total renewables production on the Cal-ISO grid reached 8,196 MW Oct. 9.
Western peak power prices fell between $2 and $6/MWh in the Oct. 9 to Oct. 16 trading period. Prices ranged from $20.95/MWh at Mid-Columbia to $36.20/MWh at South of Path 15.
Working natural gas in storage reached 3,733 Bcf as of Oct. 9, according to Energy Information Administration estimates, a net increase of 100 Bcf from the previous week. By Oct. 15, gas prices remained below the $2.52 Henry Hub benchmark at most Western hubs, save for SoCal Border and PG&E CityGate [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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