Demystifying Power Prices - A Three Part Outlook

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23 January 2013

Demystifying Power Prices - A Three Part Outlook

Report summary

This insight focuses on regional power price drivers and outlook, highlighting the increasing relevance of a three-part power price forecast, recently introduced by Wood Mackenzie in contrast to a traditional two-part forecast.

Table of contents

  • Summary
    • Energy Price Outlook and Implied Heat Rates
      • Eastern Interconnect and ERCOT
      • Western Interconnect
      • Scarcity "Risk"
      • Capacity Markets
        • New England Forward Capacity Market (FCM)
        • MISO Resource Adequacy Requirement (RAR)
        • PJM Reliability Pricing Model (RPM)
        • NYISO Installed Capacity Requirement (ICR)
    • The Economics of Gas
    • Overall pricing levels expected to vary significantly across markets
    • Power price drivers continue to vary across markets
    • Continued evolution of power markets complicates price forecasting

Tables and charts

This report includes 7 images and tables including:

  • Figure 1 Three-Part Price Forecast by component
  • Figure 7: Three-Part Price Contribution to Average 2015 Spark Spread for Selected Markets
  • Figure 2: Power Prices and Heat Rates - East and ERCOT
  • Figure 3 Power Prices and Heat Rates - WECC
  • Demystifying Power Prices - A Three Part Outlook: Table 1
  • Figure 5 Capacity Price Forecast for Select Zones
  • Figure 6: Overall pricing levels as a percentage of cost of building new gas plants

What's included

This report contains:

  • Document

    Demystifying Power Prices - A Three Part Outlook

    PDF 627.27 KB

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