Entries in wholesale prices (30)


ISO-NE’s wholesale electricity and capacity markets were competitive in 2018

The 2018 Annual Markets Report, issued by the Internal Market Monitor at ISO New England, concluded that New England’s wholesale power markets were competitive in 2018. The report notes that the total cost of wholesale electricity markets was $12.1 billion in 2018, which represents an increase of about 32% over 2017. Of the total, energy costs rose 34% to $6 billion. The energy increase was driven by higher natural gas prices, particularly during winter, and higher power demand during a hot and humid summer. Capacity costs rose by $1.4 billion to $3.6 billion, reflecting higher clearing prices in the eighth and ninth Forward Capacity Auctions after a spate of generator retirements. Capacity costs will begin to decline after June 2019, reflecting the entry of new resources and a higher capacity surplus. Regional network load costs were $2.3 billion to pay for the use of transmission facilities and other services. The costs for reliability services such as operating reserve, regulation and net commitment period compensation, totaled about $200 million in 2018.


Average annual power price rose in 2018, but was still lower than first full year of markets

New England’s average wholesale electricity price in 2018 rose over the 2017 price, but still ranked as the six-lowest since the current wholesale markets were implemented in 2004. Wholesale prices rose in 2018 because the cost of natural gas, the primary fuel used to produce electricity, was higher. Higher consumer demand for power was also a factor, as well as an extreme cold spell during the first week of January that caused prices to spike. Wholesale prices in 2018 were higher than power prices in 2017, but 2017 had the second-lowest wholesale prices since 2004, the first full year of operation for the current markets. Overall, since 2004, the average annual price of wholesale electricity in New England has fallen 19%. Read more in the press release.


Spring 2018 markets report reviews wholesale market outcomes during March, April, and May 2018 

The Spring 2018 Quarterly Markets Report prepared by the Internal Market Monitor (IMM) of ISO New England reviews wholesale energy market outcomes for the three-month period from March 1 through May 31, 2018.

The Spring 2018 Quarterly Markets Report notes that the total wholesale cost of electricity (including energy, capacity, and ancillary services) during the three-month period was $1.87 billion, up 45% over the market value of $1.29 billion during the spring of 2017. The value of the energy market was $1.06 billion, a 10% increase over spring 2017 costs. The increase was driven by higher natural gas prices, which increased 8% year-over-year. The higher total cost of the wholesale markets was also affected by higher Forward Capacity Market prices, up $479 million to total $767 million for the period.

The average day-ahead and real-time wholesale energy prices were $34.69 per megawatt-hour (MWh) and $33.27/MWh, respectively. The day-ahead average was 13% higher than the previous spring’s $30.78/MWh, while the real-time average price was 4% higher than the spring 2017 real-time average of $31.92. The year-over-year increase was driven by natural gas prices that were 8% higher, averaging $3.84 per million British thermal units (MMBtu) compared to the $3.55/MMBtu average price during the previous spring. The capacity price for the period from June 1, 2017, through the spring quarter ending on May 31, 2018, rose due to a system-wide capacity deficiency after a wave of retirements.


Winter 2018 markets report reviews wholesale market outcomes during December 2017 and January and February 2018

The Winter 2018 Quarterly Markets Report prepared by the Internal Market Monitor (IMM) of ISO New England reviews wholesale energy market outcomes for the three-month period from December 1, 2017, through February 28, 2018.

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Winter 2017/2018 recap: Historic cold snap reinforces findings in Operational Fuel-Security Analysis

Weather always plays a crucial role in how ISO New England operates the region's power grid, and that was certainly the case as New England faced a historic two-week cold snap in late December and early January that sent temperatures plunging and nearly pushed the bulk power system to the brink.

"The cold temperatures, together with winter storms and other complicating factors, led to some of the most challenging conditions our system operators have ever had to navigate," said Peter Brandien, ISO New England's vice president for system operations.

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Monthly wholesale electricity prices and demand in New England, February 2018

February natural gas and wholesale power prices subsided from January’s highs

Milder weather during February tempered the demand for both natural gas and power and allowed the average monthly price for each to shrink significantly from the highs recorded during January. The average monthly wholesale power price shrank more than 63% in both the day-ahead and real-time energy markets, to $39.58 per megawatt-hour (MWh)* and $36.91/MWh, respectively. While those prices marked significant declines from January’s prices, they were still up, by about 32%, from the average monthly prices recorded in February 2017.

February also marked a return to a more typical resource mix. During the extreme cold weather in early January, the spike in natural gas demand and resulting rise in prices caused coal- and oil-fired generators to be less costly to run than natural-gas-fired generators. As a result, coal- and oil-fired generators were dispatched more often in January, and generated about 15% of the energy produced by New England power plants. By contrast, in February, coal- and oil-fired power plants produced under 2% of the region’s generation. That’s closer to the usual fuel mix—in 2017, they generated just 2.3% of the energy produced in New England.

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