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10 Pages

Demystifying Power Prices - A Three Part Outlook

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.

What's included?

This report includes 1 file(s)

  • Demystifying Power Prices - A Three Part Outlook PDF - 627.27 KB 10 Pages, 1 Tables, 6 Figures


This Power Markets Insight report highlights the key issues surrounding this topic, and draws out the implications for those involved.

For participants, suppliers and advisors who want to look at the trends, risks and issues within the power industry, this report gives you an expert opinion and analysis to help inform your decision making.

Wood Mackenzie's detailed analysis and reliable market forecasts provide a strong reference, enabling a quick and concise description about the relationship between this event and its implications.

Underpinned by our extensive gas, coal and oil markets research, Wood Mackenzie's detailed analysis and reliable market forecasts provide a reliable foundation for investments and corporate planning. We help you understand key regulatory and economic drivers, and emerging industry tends in the power industry.

  • Summary
  • Three-Part Price Forecast
    • 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
  • Conclusions
    • 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

In this report there are 7 tables or charts, including:

  • Summary
  • Three-Part Price Forecast
    • Figure 1 Three-Part Price Forecast by component
    • 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
    • Figure 7: Three-Part Price Contribution to Average 2015 Spark Spread for Selected Markets
  • Conclusions
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Wood Mackenzie, a Verisk Analytics business, has been a trusted source of commercial intelligence for the world's natural resources sector for more than 40 years, empowering clients to make better strategic decisions with objective analysis and advice.

We work across every sector of oil, gas, power, renewables, chemicals, metals and mining, covering more than 150 countries. Our proprietary data and models are at the core of everything we do, ensuring our independent asset and company valuations are thoroughly robust and that we offer an accurate forward-looking view of economic indicators such as market supply, demand and price trends.

Our 500+ analysts are based in the regions they cover, cultivating an unrivalled depth of understanding to help clients accurately identify new opportunities, define their strategy and improve business performance.

At every stage, our teams readily collaborate and share their insight to provide an integrated perspective across entire industries. It is this unique and rigorous analytical approach that ensures we are recognised as the industry standard by the world’s most innovative organisations.