NYISO Capacity Prices Volatile Heading into Winter 2023-24 | Capacity Watch Blog

October 9, 2023 | capacity-watch, nyiso

As the days grow shorter and temperatures drop, the New York State energy market gears up for another winter season. The New York Independent System Operator (NYISO) manages the state’s energy needs, ensuring a reliable power supply during the colder months. This blog post will delve into the critical details of the NYISO Installed Capacity Market for the Winter 2023/24 season, shedding light on auction schedules, clearing price volatility, and notable changes compared to the previous winter.

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Auction Schedule
The NYISO Winter Capability Period for 2023/24 is set to commence on November 1st, and a series of crucial auction events precede it:

  1. September 28, 2023: The Capability Period (6-month strip) Auction opened.
  2. September 29, 2023: The Capability Period Auction closed.
  3. October 3, 2023: Winter strip auction results posted.
  4. October 10-13, 2023: The First Monthly Auction for Winter 2023/24.
  5. October 23, 2023: Default Reference Prices will be posted.
  6. October 25-26, 2023: November Spot Auction will be conducted.
  7. October 30, 2023: November Spot Auction results will be posted.

These dates mark critical milestones in the preparation for the upcoming winter season.

Clearing Price Volatility
The NYISO Installed Capacity Market clearing price determines the compensation for Power Generation Owners. The Winter 2023/24 price forecast reveals significant changes compared to Winter 2022/23, with volatility in clearing prices predicted across all zones.

  • Zone J (NYC): Changes in the UCAP requirement and potential retirements resulting from NYC’s DEC peaker NOx rule may impact clearing prices.
  • NYCA: The New York Control Area (NYCA) will be impacted by potential retirements and a fluctuation in the level of imports expected from PJM.
  • G-J Locality and Zone K: These zones are also impacted by changes in both retirements and fluctuations in imports from PJM.

Contributing Factors to Volatility
The main factors contributing to the volatility in clearing prices are:

  1. Expected retirements of power generation units
  2. New Renewable Capacity additions
  3. Uncertainties in Imports

The NYISO Installed Capacity Market for Winter 2023/24 promises to be dynamic and shaped by various factors, including retirements, updated reliability requirements, and import changes. As New York prepares for another winter, stakeholders in the energy market must closely monitor these developments to help inform their Capacity auction bid strategies throughout the winter period.

More Information
ESAI’s updated Capacity forecast will be discussed in the latest issue of Capacity Watch. For more information about our Capacity Forecasts, see our Capacity Market Coverage. To request trial access to ESAI’s Benchmark Energy Service fill out this free trial form.

NYISO Winter Capacity

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Capacity WatchTM – Provides quarterly analysis of capacity markets and policy issues that impact capacity price outcomes over a 10-year forecast horizon. Also provided is an evaluation of the outlook for the construction of each generation project in PJM, New York, and New England. Every project is assigned a “probability of completion” factor in percentage terms which is then applied to develop a forward assessment of likely capacity additions within a particular pool. The impacts of new generation and retirements on reserve margin surpluses and forward capacity market values is updated and presented in each issue. ESAI’s project database (Generation Asset MonitorTM) is updated and presented with each issue.