Spot power prices in the US West and ERCOT saw triple- and double-digit rises June 11, respectively, as an incoming heat wave is expected to provide significant boost to weather-driven demand.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
In the Southwest, Palo Verde and Mead 230 on-peak both traded above $150/MWh on the Intercontinental Exchange, rising more than 400% from previous settlements of $30/MWh and $34/MWh, respectively. The contacts reached highest levels since February, when much of the country saw abnormally cold temperatures.
Phoenix high temperatures were forecast at 111 degrees Fahrenheit on June 13 and 114 F on June 14, compared with the seasonal average of 103 F, according to CustomWeather.
Parts of central Arizona, southern Nevada and Southern California were under Excessive Heat Warnings, while New Mexico was under heat advisory through June 13, according to the US National Weather Service.
Cal-ISO, Northwest prices follow suit
In the California Independent System Operator, prices also spiked, with SP15 day-ahead on-peak pricing just slightly below $100/MWh, up from $27/MWh. In comparison, the contract averaged $25.3/MWh in May and $22/MWh in June 2020.
In the Northwest, Mid-Columbia traded around $75/MWh, jumping double digits from its previous price of about $26.50/MWh.
California ISO peakload demand was expected to increase over the next couple of days, tracking with rising temperatures. Demand was forecast to reach 30.2 GW on June 13 and 34.6 GW on June 14. Forecast for June 14 would be the highest since October 2020.
So far in June, peakload rose 9% month on month to average 30.42 GW, but remained about 5% below June 2020 average of 31.97 GW, according to the grid operator data.
In forwards, SP15 July and August on-peak each slid about $5 on the day to trade around $155/MWh and $170/MWh.
Mid-C July and August on-peak remained flat on the day at $160/MWh and $183/MWh, respectively.
Power forwards saw significant increases year on year across the board, pricing more than 200% higher from where they traded in June 2020.
In natural gas, spot prices for SoCal city-gate jumped 29% day on day to $4.45/MMBtu for June 12-14 delivery, according to S&P Global Platts pricing data. Month to date, SoCal spot gas prices averaged $3.77/MMBtu, up from May average of $3.33/MMBtu and June 2020 average of $1.89/MMBtu.
Further ahead, in anticipation of triple digits temperatures for Southern California and Southwest in the week of June 14, the ISO issued Heat Bulletin and Restricted Maintenance Operation notices on June 11, effective June 15-18. No outages or other power disruptions were expected, according to the ISO notice.
ERCOT prices follows high temperatures
Power prices in ERCOT also saw rises on ICE, spiking double digits across the board amid forecast high temperatures set to trend in the high 90s F, according to CustomWeather.
North Hub day-ahead on-peak for June 14 delivery climbed about $52.75 on the day to trade around $84/MWh. The real-time contract saw even larger rises, up about $55.50 to price around $86.75/MWh following a Dallas high temperature forecast of 96 F.
North Hub real-time on-peak balance of the week strip for June 15 through June 18 rose $4 to price around $52.75/MWh.
The North Hub day-ahead on-peak contract June month-to-date trended 69.7% higher compared to June of last year, up to average about $39/MWh from an average of $23/MWh. Prices had not reached similar levels since April 8 of this year when low wind generation pushed prices to about $86/MWh.
Custom weekend contracts for June 13 delivery were also significantly impacted, with North Hub real-time 7x16 strip rising about $25 to trade at $90/MWh; Dallas highs temperatures for June 13 were forecast up to 97 F.
ERCOT fundamentals trend bullish
Pacing with temperatures, day-ahead demand for June 14 was forecast to rise 4.7% from June 11 levels to 70.3 GW, the highest levels in the seven-day forecast, according to grid operator data.
Along with temperatures and demand, wind supply in the region also played an important role in helping push spot prices upward. Average wind generation in the region for June 14 was forecast to tumble 71.7% to 4.8 GWh, peak generation was forecast to fall 58.5% to 9.1 GWh, the lowest levels in the five-day forecast.
Looking ahead at the summer forwards strip, the North Hub real-time on-peak July-August package climbed about $4.25 to trade around $86.75/MWh.