Summer 2021: Grid operates reliably through heat waves, storms, as natural gas prices surge
Through heat waves, tropical storms, and the COVID-19 pandemic’s second summer, New England’s power grid operated reliably in June, July, and August 2021. Wholesale electricity prices rose as the average price of natural gas more than doubled from the same period last year.
Heat waves push demand
Demand for electricity in summer 2021 was more than 36,000 gigawatt-hours, up 3.4% from last year.
Heat waves hit the region in June and August, including a stretch in late June that brought a 70-year record high temperature of 100 degrees to Boston. Hot weather during the month meant much higher than average demand, and the heat wave pushed peak electricity use above 24,500 megawatts (MW) for three straight days. The month’s peak—and the peak for the whole summer—was 25,801 MW on June 29. The August peak was 25,179 MW.
July, though, was cool and rainy, and the peak was 23,069 MW.
The pandemic has also changed patterns in electricity use in New England. Last summer, the ISO began observing demand levels estimated to be higher than they would have been in the absence of the pandemic. That trend of slightly higher-than-expected demand—likely due to increased air conditioning use with many offices open but many employees still working from home—continued this summer.
The ISO continues to publish a weekly update on the pandemic’s impact on demand in the region.
Grid remains reliable through severe weather
In August, a storm named Henri threatened to become the first hurricane to sweep ashore in New England in 30 years. ISO New England activated its emergency preparedness plans and enhanced staffing as the storm approached.
Henri weakened to a tropical storm before it made landfall with winds of 60 miles per hour near Westerly, Rhode Island on the afternoon of August 22. More than 100,000 power outages were reported across New England, the majority of them in Rhode Island. Two transmission lines impacted during the storm were restored on the same day.
Thanks to strong communication and collaboration among ISO New England and stakeholders—including the region’s transmission operators, generators, and demand-side resources—the region’s bulk power system operated reliably throughout the storm.
Prices up, compared to record lows
Real-time wholesale electricity prices averaged $40.22 per megawatt-hour in summer 2021, up 79% from 2020’s record low average of $22.50 for the months of June through August.
The average natural gas price for summer 2021 was $3.32 per million British thermal units (MMBtu). It was an increase of 116% from summer 2020, when the average price was $1.54—the lowest average summer price since the ISO began tracking the data in 2003. Demand for natural gas dropped during a mild winter in 2020 and through the early months of the pandemic, driving down prices.
The year-over-year increase in the price of natural gas in summer 2021 made electricity generation more expensive, driving the price increases in the wholesale electricity markets. Natural gas prices are up across the country this year, due in part to lower reserves and rising demand as the United States continues its recovery from COVID-19.
The average real-time wholesale electricity price in summer 2021 was higher than any summer of the previous five years. But the comparison covers a stretch that included two of the lowest average summer prices, in 2017 and 2020, since introduction of the current markets in 2003. Three of the five summers from 2016 through 2020 saw average wholesale electricity prices below $30 per megawatt hour.
Average summer real-time wholesale electricity prices, 2016-2021 ($/MWh)