Robust supply, lower US power prices push renewables values into negative territory

US solar, wind capture prices in recent weeks have hovered in the negative territory in multiple US regions, driven by supply and wholesale power market fundamentals, with California Independent System Operator solar and Electric Reliability Council of Texas wind prices seeing the greatest amounts of negative price settlements year to date.

Solar, wind regional pricing

In the CAISO market, solar prices settled below zero at the SP15 and ZP26 Generation Hubs 30 and 26 days year to date, averaging $13.59/MWh and $17.39/MWh, respectively, down 78.5% and 71.7% from the Q1 2023 average, Platts Renewable Capture Price data showed.

Prices were relatively strong during January and February, following winter power markets, and started to decline sharply in March amid mild shoulder season temperatures and abundant renewable supply.

Conversely, NP15 solar, wind and SP15 wind prices remained above zero for the duration of the current year at $43.93/MWh, $53.02/MWh and $42.44/MWh, while also showing significant year-on-year declines at 44.2%, 46.3% and 54%, respectively.

Looking into ERCOT pricing trends, weighted average wind price at the South Zone dropped below zero in the total of 36 times to average just $5.10/MWh, down 38.3% year on year, while prices at the corresponding West and North Zones rose 14.2% and 13.2% to $19/MWh and $19.30/MWh, respectively. Texas solar prices showed relative strength, remaining largely above zero.

In Central US, Southwest Power Pool wind values at the North and South Hubs were seen in the negative territory nine and four days so far in 2024, while still rising 17% year on year to price at an average of $24.40/MWh.

Strong renewable supply

Supporting the downtrend in CAISO, year-to-date solar output averaged 92.58 GWh, or 17.6% of the fuel mix, jumping 60% from the year-ago levels. Tracking increased supply, curtailed solar in CAISO averaged 1.34 GW so far this year, rising 8% from 2023, while March solar curtailment climbed to 2.62 GW, up 13%, according to Platts Renewable Curtailment data. Wind output across the ISO footprint, however, decreased slightly, down 5% to 55 GW.

In ERCOT and SPP, wind supply dwindled in 2024, down 32% and 4%, respectively, remaining robust at 324.07 GWh and 314.75 GWh, while solar in Texas rallied 53% year-on-year to average 85.44 GWh, US Energy Information Administration and grid operators' data showed.

Power markets rangebound across regions

Varied year-on-year fluctuations in renewable pricing could be explained by trends in the wholesale power markets, as CAISO day-ahead baseload power prices across all three hubs averaged 56.6% lower year to date, compared to Q1 2023, at $41/MWh, prompting sharps declines in value of renewables. ERCOT and SPP power prices, on the other hand, rose 26% and 15% over the same timeframe to average $34/MWh and $31.63/MWh, respectively, system operators' data showed.

Platts is part of S&P Global Commodity Insights.