Commodity market report
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11 Pages

The Clean Power Plan made "easy": ERCOT Power & Renewables long-term outlook H2 2016 highlights and data


The Clean Power Plan made "easy": ERCOT Power & Renewables long-term outlook H2 2016 highlights and data

Report summary

Original analysis of the Clean Power Plan (CPP) a little over a year ago suggested it could result in fairly high compliance costs in the eastern US relative to a “No Carbon” (No CPP) case.  In our latest forecast, a downward revision to our long-term natural gas prices and load growth translates into lower carbon prices. These effects also help keep power as well as renewable energy credit prices relatively contained. Despite these trends, renewables growth remains largely unchanged as lower market prices are mitigated by higher state mandates and falling cost of renewables.

As markets move towards a new energy paradigm with renewables both on and off grid, battery storage, demand response, electric vehicles -- the challenge of integrating diverse sources and maintaining system reliability are taking centerstage.  Market mechanisms and compensation schemes are also evolving rapidly in concert.

What's included?

This report includes 21 file(s)

  • The Clean Power Plan made "easy": ERCOT Power & Renewables long-term outlook H2 2016 highlights and data PDF - 314.69 KB 11 Pages, 0 Tables, 0 Figures
  • NAPS LTO Battery Cost Forecast ERCOT 1 31 2017.xlsx XLSX - 100.85 KB
  • NAPS LTO Capacity Prices ERCOT 1 31 2017.xlsx XLSX - 270.75 KB
  • NAPS LTO Coal Clean Equipment Data ERCOT 1 31 2017.xlsx XLSX - 181.39 KB
  • NAPS LTO Coal Retirements ERCOT 1 31 2017.xlsx XLSX - 56.63 KB
  • NAPS LTO Delivered Fuel Prices Nominal ERCOT 1 31 2017.xlsx XLSX - 435.43 KB
  • NAPS LTO Delivered Fuel Prices Real ERCOT 1 31 2017.xlsx XLSX - 440.44 KB
  • NAPS LTO Emission Prices Nominal ERCOT 1 31 2017.xlsx XLSX - 119.95 KB
  • NAPS LTO Emission Prices Real ERCOT 1 31 2017.xlsx XLSX - 119.95 KB
  • NAPS LTO Emissions ERCOT 1 31 2017.xlsx XLSX - 148.96 KB
  • NAPS LTO Load Forecast ERCOT 1 31 2017.xlsx XLSX - 2.56 MB
  • NAPS LTO Macroeconomics ERCOT 1 31 2017.xlsx XLSX - 103.43 KB
  • NAPS LTO Prices Sparks IHR Darks Nominal ERCOT 1 31 2017.xlsx XLSX - 3.28 MB
  • NAPS LTO Prices Sparks IHR Darks Real ERCOT 1 31 2017.xlsx XLSX - 5.00 MB
  • NAPS LTO Renewable Energy Credit Prices ERCOT 1 31 2017.xlsx XLSX - 126.31 KB
  • NAPS LTO Solar DG ERCOT 1 31 2017.xlsx XLSX - 75.25 KB
  • NAPS LTO State RPS Targets ERCOT 1 31 2017.xlsx XLSX - 195.66 KB
  • NAPS LTO Supply Demand Energy ERCOT 1 31 2017.xlsx XLSX - 775.63 KB
  • NAPS LTO Transmission Projects in Base Case ERCOT 1 31 2016.xlsx XLSX - 79.55 KB
  • NAPS LTO Report 1 31 2017 Appendix Modeling Enhancements.pdf PDF - 837.64 KB
  • WoodMac NAPR Topology 2016H2.pdf PDF - 486.98 KB

Description

The power sector is rapidly transitioning to a cleaner generation mix supported by technological and regulatory changes. Regional markets and structures are adjusting to these new realities with implications on fuel demand, commodity pricing and asset values.

This Power Markets Long Term Outlook report provides a detailed analysis of supply, demand and price fundamentals, as well as the regulatory and market issues affecting regional power markets.

Use this report to examine key issues driving regulatory and economic trends and identify future growth opportunities in regional power markets.

Wood Mackenzie's detailed analysis and reliable market forecasts give you a strong foundation for your investment decisions and corporate planning. Our experienced power research analysts use high-quality proprietary gas, coal and oil markets research to help you unlock power market fundamentals and identify future growth opportunities.

  • Executive summary
    • Despite stable GDP projections, regional demand trends remain under pressure
    • Energy Efficiency (EE) and Distributed Solar (DG Solar) continue to constrain overall load growth
      • EE
      • Distributed Solar
      • With EVs providing long term upside
    • Despite a near term bump in natural gas prices, the long term outlook reverts back to continuing pressure from low cost supplies
    • As coal demand follows the shift in the natural gas paradigm
    • Although carbon emissions have already been sharply reduced, long term fundamentals find room to keep carbon prices contained
    • Natural gas generation now expected to permanently surpass coal generation as early as 2019
    • Wind and solar continue to absorb market share
    • Despite increasing renewable output and efforts to increase transmission access, lack of transmission expansion still expected to inhibit renewable integration
    • Coal retirements in the near to mid term continue to clarify
    • Nuclear capacity looks to out of market revenues for support
    • Despite lower loads, more new gas capacity is expected to be needed over the forecast horizon
    • Reserve margins remain in flux
    • Regional energy prices absorb the combination of weaker demand, lower natural gas prices, and nominal carbon pricing
    • Capacity markets continue to evolve
      • PJM Reliability Pricing Model
      • MISO Resource Adequacy
      • New York ICAP (Installed Capacity) market
      • ISO New England Forward Capacity Market (FCM)
      • Capacity Markets to grow? : Canadian Capacity Markets
      • Capacity Prices for other Markets - California
      • REC Markets
    • Conclusion
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