POWER MARKETS
WESTIn the term market, the recent extreme demand for Q3 2021 on-peak supply diminished significantly over the weekend. Because of the lack of demand at the current high prices, the Heat Rate collapsed and drove Q3 2021 on-peak prices down by approximately $10/MWh in Palo Verde and CAISO.
ERCOT Clearing between the high $20s/MWh and the low $30s/MWh across all zones, 7x24 real-time prices have shown some strength so far this week. Because of forecasts of warm weather for the remainder of the week, followed by a cool front later next week, some volatility can be expected in the near term, depending on wind performance. Only 5,000 MW of wind generation is expected today, raising prices at a time when the higher temperatures have pushed peak loads into the low 50,000s MW and more than 25,000 MW of thermal generation is down for maintenance. Wind production is expected to pick up to 14,000 MW on Friday to boost generation reserves. In contrast to the increasing volatility in the real-time market, term prices have retreated this week. Retreating from the upward move in the curve over the last few weeks, CY strips are down by $0.50-$1.00/MWh.
EAST Prices are holding steady across the main hubs. Both Day Ahead and Real Time are printing in the mid-$20s/MWh in most regions but are in the low $20s/MWh in PJM’s NI Hub. DART spreads have also stayed minimal this week.