Wholesaleelectricity prices in the California power market dropped roughly 30% in 2015 witha 40% decline in natural gas prices, moderating loads and about 950 MW of new peaksummer generating capacity helping to offset record-low hydroelectric production,according to a recent report by the CaliforniaISO's Department of Market Monitoring.
Accordingto the report, "2015 Annual Report on Market Issues and Performance,"prices in the ISO energy markets in 2015 were "highly competitive" andaveraged close to what the market monitor estimates would occur under highly efficientand competitive conditions.
"Asmore renewable generation comes on line, we continue to see growing market effects.Thus, it remains important for the ISO and stakeholders to continue to develop markettools to value flexibility and address oversupply," Keith Collins, managerof monitoring and reporting, said in a news release.
Drivenprimarily by lower natural gas prices, the total estimated wholesale cost of servingload last year was just below $37/MWh, down about 30% on the year.
At thereal-time market, prices in the 15-minute and 5-minute market were fairly stablein 2015, but with an increased frequencyof negative prices compared to 2014. The DMM found that the trend toward increasednegative pricing was particularly notable in the first half of 2015 due to a moderateloads, increased peak solar power output and a planned outage on Path 15, a majortransmission path within California.
The reportfound that average real-time prices tended to be lower than average day-ahead prices,continuing a trend that began in 2013.
"Thistrend is partly attributable to a drop in high real-time price spikes compared toprior years. This trend also reflects additional generation in real time not scheduledin the day-ahead market, particularly from wind and solar units," the reportstates.
An in generation from solarresources drove up the amount of non-hydroelectric renewable generation directlyconnected to the ISO system, which accounted for about 18% of the ISO's total supplyin 2015, up from about 16% in 2014. Energy from wind and solar resources directlyconnected to the ISO grid provided more than 12% of system energy, up from about10% in 2014.
Solarenergy production increased by about 38% on the year and accounted for almost 7%of the total supply, making it the largest source of renewable power, overtakingwind for the first time.
The overalloutput from geothermal generation increased by about 24% in 2015 and provided almost5% of system energy while wind generation decreased slightly and contributed toabout 5% of system energy. Natural gas power plants continued to be the largestsource of energy in 2015.
Hydroelectricgeneration decreased about 16% last year and provided about 5% of the supply, thelowest level since the ISO began operation in 1998.
Almost1,700 MW of new generation connected to the grid in 2015 with about 950 MW of summerpeaking capacity. Of the total new generation, about 450 MW was wind capacity andmore than 1,200 MW was solar. No natural gas-fired power plants were added in 2015but more than 1,000 MW of gas plants were retired.
Demandresponse met about 5% of the ISO's overall system resource adequacy capacity requirements.