May 26, 2022

Monthly wholesale electricity prices and demand in New England, April 2022

Prices up in both day-ahead, real-time markets in April

Wholesale power prices averaged $59.39 per megawatt-hour (MWh)¹ in the Real-Time Energy Market in April 2022, up 129% compared to the previous year. Day-Ahead Energy Market averages rose to $62.37/MWh, an increase of 139% from April 2021.

By the numbers

April 2022 and Percent Change from April 2021 and March 2022	April 2022	April 2021	March 2022
Average Real-Time Electricity Price ($/megawatt-hour)	$59.39	128.5%	-10.4%
Average Natural Gas Price ($/MMBtu)	$6.48	175.7%	-2.8%
Peak Demand	14,402 MW	-1.9%	-14.8%
Total Electricity Use	8,284 GWh	-0.8%	-13.6%
Weather-Normalized Use²	8,345 GWh	-0.5%	-14.5%

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 53% of the power produced in 2021 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 April was $6.48 per million British thermal units (MMBtu)³. The price was up 176% from the April 2021 average Massachusetts natural gas index price of $2.35/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.

April wholesale electricity and natural gas prices

Electricity demand

Demand is driven primarily by weather, as well as economic factors. Energy usage during April decreased 0.8% to 8,284 GWh, from the 8,347 GWh used in April 2021.

The average temperature during April was 48˚ Fahrenheit (F) in New England, down 1˚ from the previous April. The average dewpoint, a measure of humidity, was 32˚F in April, down 2˚ from the previous April. There were 497 heating degree days⁴ (HDD) during April, while the normal number of HDD in April is 524 in New England. In April 2021, there were 467 HDD. There were no cooling degree days in April.

Consumer demand for electricity for the month peaked on April 7 during the hour from 7 to 8 p.m., when the temperature in New England was 46°F and the dewpoint was 40°. Demand reached 14,402 MW. The April 2022 peak was 1.9% lower than the April 2021 peak of 14,684 MW, set during the hour from 12 to 1 p.m. on April 16, when the temperature was 37°F and the dewpoint was 34°.

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.

April 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 70% of the 7,335 GWh of electric energy generated within New England during April, at about 47% and 23%, respectively. Renewable resources generated about 16% of the energy produced within New England, including 5.5% from wood, refuse, and landfill gas; 5.4% from wind; and 4.9% from solar resources. Hydroelectric resources generated 13.6%. Generation from coal- and oil-fired resources was less than 0.1% combined. The region also received net imports of about 1,096 GWh of electricity from neighboring regions.

April generation in New England, by fuel source

The mix of resources used to produce the region’s electricity is a key driver of 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.

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

New England power plants produced an estimated 1.98 million metric tons of CO₂ in April 2022, up 9% from 1.82 million metric tons in April 2021.

Estimated CO₂ emissions from natural gas-fired plants—typically the largest source of emissions, due to the significant amount of power these resources produce—increased 17% year over year, from 1.2 million metric tons to 1.4 million metric tons. Natural gas-fired resources generated a larger share of the region’s electricity in April 2022 compared to the previous year, leading to the increase. Meanwhile, power generation from the region’s nuclear units, which do not produce CO₂ emissions, decreased year over year.

Oil- and coal-fired resources produced an estimated 5,160 metric tons of CO₂ in April 2022—less than half the April 2021 estimate, and only 0.26% of the region’s total estimated emissions.

CO₂ emissions from other resources—mostly refuse and wood—were estimated at 583,003 metric tons in April 2022, down 5% from 614,721 metric tons last year. These resources accounted for about 30% of the region’s estimated CO₂ emissions in April 2022.

_{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.}