Summer 2020: Warmer weather, lower prices

New England saw historically low wholesale electricity prices during the summer months (June, July, and August) as the region experienced warmer weather and grappled with the COVID-19 pandemic. 

Historically low prices

Real-time wholesale electricity prices averaged $22.52 per megawatt-hour (MWh) during Summer 2020, the lowest summer average since the introduction of the region’s current market design in 2003. The low prices represented a 10 percent decline over the previous summer. The previous low water mark for summer power averages was $24.78/MWh, set in 2017.

Natural-gas-fired power plants generated 61% of the power produced in New England during Summer 2020, and as a result, average wholesale electricity prices were closely linked to natural gas prices. During the summer of 2020, natural gas prices averaged $1.54 per million British thermal unit (MMBtu), the lowest since the ISO began tracking the figures in 2003.

Consumer demand up slightly

Consumer demand for electricity was up slightly in Summer 2020, when compared to previous year. Demand during summer was 33,550 gigawatt-hours, a 1.5 percent increase over Summer 2019, which itself was the lowest summer since at least 2003.

Weather is the single largest predictor of consumer demand, and the year-over-year increase in summer demand correlated with warmer temperatures in New England. There were 370 cooling degree days* in New England this summer, a 23 percent increase over the previous year.

Pandemic changes demand

The region’s response to the COVID-19 pandemic remained evident in consumer demand for electricity throughout Summer 2020. Beginning in mid-March, ISO Forecasters noticed changes in consumer demand related to the pandemic, namely lower overall electricity use and a different use pattern. These trends changed during the summer, particularly when the region experienced hot, humid weather. Under these conditions, New Englanders used more electricity than what would have been expected absent the pandemic, likely due to increased home air conditioning, coupled with offices and other commercial properties re-opening, albeit with smaller numbers of employees.

The ISO continues to publish a weekly update on the pandemic’s impact on demand in the region.

Behind-the-meter solar impacts

The region continued to see the impact of behind-the-meter solar photovoltaics (PV) throughout Summer 2020. Just a few weeks before the official start of summer, New England saw behind-the-meter PV production peak at over 3,300 megawatts on May 13, breaking the previous record, set just two weeks earlier on May 2.

Continuing a trend seen in recent years, sunny summer weekends with milder temperatures resulted in mid-day consumer demand that was sometimes lower than overnight demand. After first occurring in 2018, and again three times in 2019, the region has thus far seen 13 such days this year. While this doesn’t change the fundamental operation of the power system, it does illustrate the scale of the ever-growing number of behind-the-meter PV systems.

* A degree day is a measure of heating or cooling. A zero degree day occurs when no heating or cooling is required; as temperatures drop, more heating days are recorded; when temperatures rise, more cooling days are recorded. The base point for measuring degree days is 65 degrees. Each degree of a day’s mean temperature that is above 65 degrees is counted as one cooling degree day, while each degree of a day’s mean temperature that is below 65 degrees is counted as one heating degree day. A day’s mean temperature of 90 degrees equals 25 cooling degree days, while a day’s mean temperature of 45 degrees equals 20 heating degree days.

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