US POWER TRACKER: ISO New England forward power prices down 66% in August

ISO New England forward power prices were down between 63% and 66% on year in August and forward natural gas prices were down by 70% to 81% on year, while milder August weather compared to July decreased ISO-NE power demand, which lowered power and gas prices on month.

Mass Hub on-peak forward power prices for September averaged $33.51/MWh in August trading, a 66% on-year decrease and down about 7% on month, according to Platts M2MS data. Forward power for October averaged $33.54/MWh, down about 64% on year and down less than 1% on month, and the November contract averaged $57.24/MWh, down 63% on year and 7% on month.

ISO-NE Internal Hub on-peak power prices are forecast to average $43.80/MWh for the rest of 2023, rising from $30.82/MWh in September to $71.13/MWh in December, according to S&P Global Commodity Insights power market analysts.

Algonquin city-gates forward gas prices for September averaged $1.53/MMBtu in August trading, a dramatic 81% decline on year and down almost 16% on month. The October contract averaged $1.78/MMBtu, down about 79% on year and down around 6% on month, and forward gas for November averaged $4.81/MMBtu, down about 70% from $16.00/MMBtu a year ago and down about 13% on month.

Algonquin gas prices are forecast to average $3.07/MMBtu for the rest of 2023, increasing from $1.45/MMBtu in September to $6.38/MMBtu in December, according to the S&P Global analysts.

Power generation fuel mix, demand changes

Gas-fired power accounted for 55.8% of the ISO-NE fuel mix in August, down from 60% in July and 62.9% in August 2022, according to ISO data. Lower power demand and increased nuclear output could account for the decrease in gas-fired power.

Nuclear power accounted for 24.1% of the power generation fuel mix, up from 21.1% in July and 23.4% in August 2022.

Hydropower, solar and wind made up the remainder of the fuel mix. Wind power rose from 1.2% in July to 2.4% in August.

ISO-NE power demand declined by 13% in August on month, with average peakload dropping from 19,219 MW in July to 16,688 MW in August.

The average temperature across the ISO-NE footprint in August was 71 degrees Fahrenheit, according to CustomWeather data. The historical average temperature in August is 72.3 F.

Offshore wind challenges

An influx of offshore wind power is expected in New England this decade, but supply chain challenges continue posing risks to near-term developments, according to the latest S&P Global North American Electricity Short-term Outlook.

In Mid-August, the US Department of the Interior announced its approval of the Revolution Wind project slated to come online in 2025, but at the end of the month, the developer, Orsted, said Revolution Wind had been affected by the same challenges that caused it to delay its Ocean Wind project in PJM.

"While a delay has not yet been announced, the current timeline is at risk," the research note said.