Power forward contracts for this summer are trading north of $100/MWh in PJM, NYISO, and ISO-NE. Implied forward spark spreads – an indicator of the profitability of gas-fired power plants – have exploded, greatly exceeding anything that has historically been realized in the power markets.
Coal-fired power plants are subject to a myriad of federal environmental regulations that have led to significant retirement waves when plant owners face capital expenditures for compliance that cannot be supported by market revenues. Many coal plant owners are now facing significant potential compliance costs due to rules regulating disposal of coal combustion residuals (CCRs). CCRs, also known as coal ash, are produced from the process of burning coal and operating flue gas desulfurization equipment at coal-fired facilities.
ESAI Power’s latest issue of EnergyWatch™ discusses regulations affecting coal combustion residuals (CCR) under EPA rules for wastewater discharge and CCR disposal and handling. Several coal-fired plants in PJM have announced retirement plans or are at-risk of retirement due to compliance requirements with these rules. Clients of our Energy Watch service received an accompanying spreadsheet with data about the affected plants. Also included are ESAI’s Power and Natural Gas forward pricing forecasts in PJM, NYISO, ISO-NE.
The upcoming winter’s natural gas and power prices outlook for PJM, NYISO and ISO-New England continue to trend up despite the warmer-than-normal weather forecast. The forwards appear overvalued and ESAI Power holds its bearish stance on natural gas and power prices. The markets bullish outlook is based on a recent uptick in delivered gas and global LNG prices, but ESAI Power’s outlook has key insights driving a stable gas and power forecast.
This blog looks into the impact that offshore wind development in NYISO has on gas-fired generation facilities and their net energy revenues. The recent approval of CLCPA’s minimum statewide offshore wind goal and NYSERDA’s authority to procure offshore renewable energy credits (ORECs) puts renewables at the forefront of NYISOs market development. The Boardwalk Offshore Wind and Beacon Offshore Wind Project that were recently awarded OREC contracts are just the start of the lofty 9 GW offshore wind target.
Our Q2 issue of Energy WatchTM came out this week. In our Q2 Energy WatchTM report ESAI Power provides an update on the Seasonal NOx regulations under the Cross-State Air Pollution Rule and the expected impact on allowance prices, Northeast power plant emissions, and wholesale power prices. For each ISO, ESAI Power provides an overview of projected net energy revenue expectations for key generation technologies.
June has brought about high temperatures and strong electricity demand to the PJM, NYISO, and ISO-NE power markets with elevated prices. Northeast power futures reacted quickly and are trading significantly higher. Despite this rally in prices, ESAI’s gas outlook is stable and believes the futures are overvalued. In this blog, we’ll provide a brief update on each of the ISO’s and an update on the RGGI Quarterly Auction (Auction 52).
ESAI Power’s summer forecast for power prices in PJM is bullish. Both Day-Ahead and Spot markets should see increased volatility due to stronger loads, robust gas prices, and generation retirements. In this blog, we’ll provide a preview into the ESAI Power Energy Watch bullish forecasts and expected generation changes that will impact energy prices in PJM, NYISO and ISO-New England. The upside potential for delivered natural gas and power prices across the Northeast will keep the ISO markets interesting in the upcoming months.
In this report, we cover load developments and their impact on wholesale electricity prices in NYISO, PJM, and ISO-New England. In most areas of New York, 2021 energy demand is projected to be down slightly. PJM’s 2021 Load Report projects energy demand for 2021 to be 1.2 percent lower than in the 2020 Load Report. In New England, higher projected energy efficiency and distributed solar growth are expected to offset increases in demand from electric vehicles and space heating.
Based upon changes in demand, we produce analysis and a price forecast to predict wholesale electricity prices in NYISO, PJM and ISO-New England. This week’s Energy Watch report provides an overview of load developments and a 10-year price forecast for each of the Northeast regions. In most areas of ISONY, 2021 energy demand is projected to be down slightly. Longer-term projections under the preliminary 2021 NYISO Gold Book are lower than the 2020 Gold Book projections.
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ESAI Power is a market research and consulting firm that delivers focused analysis of the wholesale power markets in the Northeast region of the US: PJM, NYISO, and ISO-NE. Since 2001, ESAI has been providing market-focused research product content and custom consulting services for Northeast power market participants including investors (banks, private equity, & hedge funds) & developers, generation owners & operators, utilities & retail electricity suppliers, regulators & RTOs, traders, and end-users & buyers.
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- Proposed EPA Rule Leads to Quadrupling Group 3 Ozone Season CSAPR NOx Prices | Emissions Watch Blog June 7, 2022
- RGGI Auction 56 Update: RGGI Auction Clears At $13.90 | Emissions Watch Blog June 3, 2022
- NYISO Central East Congestion to Moderate this summer | Congestion Watch Blog May 20, 2022
- ESAI Power Sponsors ACORE Renewable Energy Finance Forum | Renewables News May 17, 2022
- PJM BRA 2023/24 Capacity Price Forecast | Capacity Watch Blog May 13, 2022
- Are Power Forwards Overvalued for Summer 2022? | Energy Watch Blog May 11, 2022
- ISO-NE Proposes Ending MOPR in 2025, with a Transition Aimed at Protecting Grid Reliability | Energy News April 4, 2022
- Outage-Related Transmission Constraints to Impact Power Prices in PJM, NYISO & ISO-NE | Congestion Watch Blog March 23, 2022
- Coal Plant Owners Seek to Shut 3.2 GW in PJM in Face of Economic, Regulatory and Market Pressures | Emissions News March 22, 2022
- EPA Wastewater Rules and PJM Coal Retirements | Emissions Watch Blog March 1, 2022
- Regulations Affecting Coal Combustion Residuals (CCRs) Under EPA Rules | Energy Watch Blog February 24, 2022
- Power and Energy Markets Research Analyst February 17, 2022
- ISO-NE FCA16 Auction Parameters and Capacity Price Forecast | Capacity Watch Blog January 14, 2022
- Record LNG Exports Drive Domestic Demand | Natural Gas Watch Blog January 5, 2022
- FERC Orders PJM To Change Reserve Market Rules, Delay Capacity Auctions | Capacity News December 23, 2021