Monthly wholesale electricity prices and demand in New England, January 2024

Wholesale power prices averaged $63.67 per megawatt-hour (MWh) in the Real-Time Energy Market in January 2024, up 26% compared to the previous year.1 Day-Ahead Energy Market averages were $70.47/MWh, a 43% increase from January 2023.  

By the numbers

January 2024 and Percent Change from January 2023 and December 2023January 2024January 2023December 2023
Average Real-Time Electricity Price ($/megawatt-hour)$63.6726.1%71.4%
Average Natural Gas Price ($/MMBtu)$7.6862.7%138.5%
Peak Demand18,431 MW6.5%4.1%
Total Electricity Use10,883 GWh6.4%8.6%
Weather-Normalized Use211,195 GWh1.7%5.9%

Drivers of wholesale electricity prices

In general, the two main drivers of wholesale electricity prices in New England are the cost of fuel used to produce electricity and consumer demand.

Power plant fuel

Fuel is typically one of the major input costs in producing electricity. Natural gas is the predominant fuel in New England, used to generate 55% of the power produced in 2023 by New England’s power plants, and natural gas-fired power plants usually set the price of wholesale electricity in the region. As a result, average wholesale electricity prices are closely linked to natural gas prices.

The average natural gas price during January was $7.68 per million British thermal units (MMBtu).3 The price was up 63% from the January 2023 average Massachusetts natural gas index price of $4.72/MMBtu. The Mass. index price is a volume-weighted average of trades at four natural gas delivery points in Massachusetts, including two Algonquin points, the Tennessee Gas Pipeline, and the Dracut Interconnect.

Wholesale electricity and natural gas prices

Electricity demand

Demand is driven primarily by weather, as well as economic factors. Energy usage during January increased 6.4%, to 10,883 GWh from the 10,233 GWh used in January 2023. The average temperature during January was 31˚ Fahrenheit (F) in New England, down 5˚ from the previous January. The average dewpoint, a measure of humidity, was 22˚F in January, down 6˚ from the previous January. There were no cooling degree days (CDD) during January, which is typical for New England.4 There were 1,056 heating degree days (HDD) during January, while the normal number of HDD in January is 1,172 in New England. In January 2023, there were 904 HDD.

Consumer demand for electricity for the month peaked on January 17 during the hour from 5 to 6 p.m., when the temperature in New England was 22°F and the dewpoint was 6°. Demand reached 18,431 MW. The January 2024 peak was 6.5% higher than the January 2023 peak of 17,304 MW, set during the hour from 5 to 6 p.m. on January 16, when the temperature was 33°F and the dewpoint was 23°.

Peak demand is driven by weather, which drives the use of heating and air conditioning equipment. The all-time high winter peak was 22,818 MW, recorded during a cold snap in January 2004 when the temperature was -1°F and the dewpoint was -20°. The all-time peak demand in New England was 28,130 MW, recorded during an August 2006 heat wave, when the temperature was 94°F and the dewpoint was 74°. Air conditioning use is far more widespread than electric heating in New England, so weather tends to have a relatively greater impact on the summer peak than the winter peak.

Monthly peak demand and total and weather-normalized energy use

Fuel mix and emissions

The mix of resources used in any given time period depends on price and availability, as well as supplemental resource commitments needed to ensure system stability. Natural gas-fired and nuclear generation produced about 79% of the 9,091 GWh of electric energy generated within New England during January, at about 55% and 24%, respectively. Renewable resources generated about 10% of the energy produced within New England, including 5.2% from wood, refuse, and landfill gas; 3.6% from wind; and 1.3% from solar resources. Oil-fired resources generated 0.6%, and coal resources generated 0.3%. Hydroelectric resources generated 10%. The region also received net imports of about 1,958 GWh of electricity from neighboring regions.

January generation in New England, by fuel source

The mix of resources used to produce the region’s electricity is a key driver of carbon dioxide (CO2) emissions. The ISO estimates these emissions through an analysis that blends data on electricity generation by fuel type with an emissions factor for each fuel that is based on data from the Environmental Protection Agency.5

January estimated CO2 emissions in New England, by fuel source (metric tons)

New England power plants produced an estimated 2.7 million metric tons of CO2 in January 2024, a 19% increase from the previous January.   

Estimated CO2 emissions from natural gas-fired plants—typically the region’s largest source of power system emissions, due to the significant amount of electricity these resources produce—rose 23% year over year, from 1.6 million metric tons to more than 1.9 million metric tons. These resources accounted for 73% of the power system’s estimated emissions.

Together, oil- and coal-fired resources produced an estimated 70,448 metric tons of CO2 in January 2024 (about 2.6% of the total), up from an estimated 28,514 metric tons in January 2023. Because the region’s wholesale electricity markets select the lowest-priced resources needed to meet demand, oil- and coal-fired resources tend to run more frequently when natural gas prices rise, as they did in January 2024.

CO2 emissions from other resources—mostly refuse and wood—were estimated at 658,358 metric tons, up 3% from January 2023. These resources accounted for about 24% of the power system’s estimated CO2 emissions for the month.

1One megawatt (MW) of electricity can serve about 750 to 1,000 average homes in New England. A megawatt-hour (MWh) of electricity can serve about 1,000 homes for one hour. One gigawatt-hour (GWh) can serve about 1 million homes for one hour.

2Weather-normalized demand indicates how much electricity would have been consumed if the weather had been the same as the average weather over the last 20 years.

3A British thermal unit (Btu) is used to describe the heat value of fuels, providing a uniform standard for comparing different fuels. One million British thermal units are shown as MMBtu.

4A 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.

5The factors used to calculate estimated CO2 emissions were updated in January 2023. ISO New England analysts regularly review and refine the methodology used to develop these emissions factors, in order to reflect the characteristics of New England’s generating fleet and improve the accuracy of the estimates.

Historical weather data provided by DTN, LLC.; Underlying natural gas data furnished by ICE.

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