WECC Power & Renewables markets long-term outlook H1 2015
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Table of contents
- Executive summary
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Policy and regulation
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Emission reduction policies shadow energy markets
- Key takeaways:
- Concerns with CPP that make it unlikely to be finalized in it's current form
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Emission reduction policies shadow energy markets
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Demand
- Key takeaways
- Energy efficiency
- Demand response
- FERC 745
- Prospects of Demand Response likely uneven across markets
- Distributed generation
- Electric vehicle build-out presents a long term uncertainty to the forecast
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Costs
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Natural Gas Markets
- Key takeaways:
- Supply
- Demand
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Prices
- Henry Hub price outlook
- Basis outlook
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Coal Markets
- Key takeaways:
- Market fundamentals – policy and economics continue to erode coal’s position
- Longer-term power sector fundamentals offer little support
- Prices ultimately struggle to find traction
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Carbon Pricing
- Key takeaways:
- United States federal Regime
- California (and Quebec) cap and trade
- RGGI
-
Natural Gas Markets
-
Supply
- Key takeaways:
- Coal to gas conversions continue to accelerate our retirement projections
- Changes in federal policies could drive incremental retirements
- Federal policy reversal combined with local reliability rules could lessen the final tally of retirements
- Current status of the PTC
- Expansion of distributed solar generation to see support as soft costs come down
- Natural Gas – the foundation for new power generation supply
- Key takeaways:
- Emissions
- Supply-demand balances
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Trade
- Transmission
- Competitive transmission projects still see obstacles to project success
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Prices
- Key takeaways:
-
Energy Prices
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ERCOT: Market attempts to correct for true amount of wind penetration on prices
- Impact of Operational Reserve Demand Curves in summer of 2014
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PJM: Epicenter of gas price volatility
- Winter/summer pricing dynamics driven by dual natural gas pipeline capacity limits
- Summer upside still exists for pricing
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MISO Central/North:
- PTC-concentrated wind build depresses Iowa prices while Indiana and Michigan are pulled higher by PJM market interaction
- Northeast - winter basis pressure is alleviated over the forecast
- Southeast – natural gas, demand growth and carbon policy set the direction for market pricing
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WECC
- Near to mid term volatility increasing in California
- As the high cost regional market, California drives prices across the WECC
- Coal retirements boost local natural gas generation in Desert Southwest
- Pacific Northwest pricing relationships to change on transmission build out
- Colorado: an eddy against the stream
- Alberta: an island on to itself
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ERCOT: Market attempts to correct for true amount of wind penetration on prices
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Capacity Prices
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Key takeaways:
- Illinois in focus
- 2016: Illinois in focus again
- 2017 +
- Risks
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PJM Reliability Pricing Model (RPM)
- 2018/2019 Auction Results
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Auction price
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RTO
- Demand Response
- Imports
- Impact of lower capital cost assumptions / CONE / Net CONE
- LDA pricing
- Long Term Capacity prices
- Figure 25: PJM Supply Demand Balances: H1 2015 vs H2 2014
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ISO New England Forward Capacity Market (FCM)
- Dynamic De-list price
- New capacity market boundaries
- Lower Net Cone
- Incorporating DG forecasts within FCM
- ISO New England supply demand balances
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RTO
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NYISO ICAP market Outlook
- Other Markets
- Capacity Markets to Grow?
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RPS Compliance and REC prices
- Key takeaways:
- NEPOOL-GIS
- PJM-GATS
- WREGIS
- NYSERDA
- NARR
- ERCOT
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New Entrant Economics
- Net revenue analysis for North American power markets will be disrupted by new wind and solar capacity being integrated over the forecast horizon
- California has initiated the path to viability in alternative resources
- Figure 30: California resource economics for new generating capacity
- ERCOT looks to extend the solar footprint in a sea of wind generation
- Despite a lack of current RPS goals, the Southeast may be in the best position to pick up the solar mantle
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Key takeaways:
Tables and charts
This report includes the following images and tables:
- Figure 17: US Emissions History and Forecast
- Figure 18: Change in Emissions
- Figure 19: Regional supply and demand balances
- Table 1: Environmental Policy Assumptions
- Figure 2 GDP growth and electric demand growth linkage
- Figure 3: State retail sales percentage above/below pre-recession levels
- Figure 4: Domestic Energy and its impacts : Resurgence of Industrial Demand
- Figure 5: Current demand response saturation by market as percent of peak
- Figure 9: US coal demand by sector
- Figure 12: Comparison of Wood Mackenzie assumed coal retirements over previous forecasts
- Figure 13: Installed wind capability
- Figure 14: Large Scale Solar
- 22 more item(s)...
What's included
This report contains:
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