Extreme temperatures boost power demand near Great Lakes, Deep South

The National Weather Service said June 15 there would be continued excessive heat concentrated around the Great Lakes and the Southeast. The extreme weather condition has pushed PJM West Hub and Into Southern day-ahead on-peak prices into triple digits, with Into Southern bilateral index assessed at a record $350/MWh for June 15 delivery.

Continued triple-digit temperatures have prompted the Electric Reliability Council of Texas to forecast all-time record peakloads for June 16.

The weather service showed "extreme heat warnings" ranging from West Virginia to Iowa and southern Missouri, and concentrated in central Georgia and parts of Arizona and Southern California.

S&P Global Commodity Insights forecast loads in the Southern Company footprint across Alabama, Mississippi and Georgia to top 46.7 GW on June 15, compared with a monthly average on-peak level of 36.2 GW for June in the previous five years.

S&P Global assessed the Into Southern day-ahead bilateral index at $350/MWh for delivery June 15, the highest level since the company started assessments in 2002. The previous high was $300/MWh set during a cold snap Jan. 5, 2018.

High temperatures in Atlanta were in the mid- to low-90s Fahrenheit through June 17, before cooling to low-90s heading into the weekend. A bid on the Intercontinental Exchange was heard for Southern day-ahead on-peak for June 16 delivery at $175/MWh.

Prices peaking in PJM

The PJM Interconnection forecast its peakload to top 143.2 GW on June 15, compared with the five-year June average of 111.6 GW, and to remain strong at 137.4 GW on June 16. PJM West Hub day-ahead on-peak rose about $27.75/MWh to about $207/MWh for delivery June 16, and PJM's AEP Dayton Hub on-peak rose $33.75 to about $251/MWh.

Although ERCOT was no longer highlighted for "extreme heat warnings," high temperatures remained around 100 degrees F and extremely dry for much of the state, and the grid operator at midday forecast a new peak of 76.4 GW to be hit June 16, up from the previous record of 74.9 GW set June 12.

ERCOT North Hub day-ahead on-peak on June 15 was trading around $84.25/MWh on ICE, about $3.50 above the previous settlement.

Renewables shine in Texas

One factor in the relatively tame pricing in ERCOT may be renewables output.

The ERCOT wind fleet produced an average 23.9 GW on June 14 and 23.6 GW through 3 pm June 15. For June 16-20, the wind fleet was forecast to provide at an average level of almost 14 GW, ranging from a minimum of 4.2 GW to a maximum of 24 GW.

From 8 am to 8 pm, ERCOT's solar fleet provided an average of 5.5 GW on June 14 and an average of 4.8 GW through 3 pm June 15. For the same periods June 16-20, the forecast calls for an average output of 7.8 GW.