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WECC Power & Renewables markets long-term outlook H1 2015

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Report summary

North American power markets are adapting as demand growth struggles against energy efficiency improvements and demand response programs. Economics of wind and solar are improving as within the next decade utility scale solar becomes attractive from a purely economic standpoint in many regions. Coal capacity that has survived MATS and CSPAR are also under threat from low natural gas prices. Further the industry awaits EPA s CPP announcement requiring reductions in carbon in 2020.

What's included

This report contains

  • Document

    WECC Regional Market Overview.pdf

    PDF 1.75 MB

  • Document

    NAPS LTO Capacity Prices WECC 5 31 2015.xls

    XLS 217.00 KB

  • Document

    NAPS LTO Coal Clean Equipment Data WECC 5 31 2015.xls

    XLS 314.00 KB

  • Document

    NAPS LTO Coal Retirements WECC 5 31 2015.xls

    XLS 90.00 KB

  • Document

    NAPS LTO Delivered Fuel Prices Nominal WECC 5 31 2015.xls

    XLS 320.00 KB

  • Document

    NAPS LTO Delivered Fuel Prices Real WECC 5 31 2015.xls

    XLS 319.50 KB

  • Document

    NAPS LTO Emission Prices Nominal WECC 5 31 2015.xls

    XLS 133.50 KB

  • Document

    NAPS LTO Emission Prices Real WECC 5 31 2015.xls

    XLS 133.50 KB

  • Document

    NAPS LTO Load Forecast WECC 5 31 2015.xls

    XLS 6.44 MB

  • Document

    NAPS LTO MacroEconomics Assumptions WECC 5 31 2015.xls

    XLS 1.79 MB

  • Document

    NAPS LTO Prices Sparks IHR Darks Nominal WECC 5 31 2015.xls

    XLS 13.67 MB

  • Document

    NAPS LTO Prices Sparks IHR Darks Real WECC 5 31 2015.xls

    XLS 13.67 MB

  • Document

    NAPS LTO Renewable Energy Credit Prices WECC 5 31 2015.xls

    XLS 4.53 MB

  • Document

    NAPS LTO State RPS Targets WECC 5 31 2015.xls

    XLS 1.48 MB

  • Document

    NAPS LTO Supply Demand Energy WECC 5 31 2015.xls

    XLS 2.73 MB

  • Document

    NAPS LTO Transmission Projects in Base Case WECC 5 31 2015.xls

    XLS 96.50 KB

  • Document

    WECC Power & Renewables markets long-term outlook H1 2015

    PDF 1.83 MB

  • Document

    WECC Power & Renewables markets long-term outlook H1 2015

    ZIP 14.17 MB

  • Document

    Executive summary

    PDF 96.33 KB

  • Document

    Policy and regulation

    PDF 1.02 MB

  • Document

    Demand

    PDF 211.06 KB

  • Document

    Costs

    PDF 189.93 KB

  • Document

    Supply

    PDF 164.22 KB

  • Document

    Emissions

    PDF 102.51 KB

  • Document

    Supply-demand balances

    PDF 91.86 KB

  • Document

    Trade

    PDF 82.37 KB

  • Document

    Prices

    PDF 132.17 KB

  • Document

    Capacity Prices

    PDF 330.54 KB

Table of contents

  • Executive summary
    • 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
      • Key takeaways:
      • Supply
      • Demand
      • Henry Hub price outlook
      • Basis outlook
      • 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
      • Key takeaways:
      • United States federal Regime
      • California (and Quebec) cap and trade
      • RGGI
    • 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
    • Transmission
    • Competitive transmission projects still see obstacles to project success
    • Key takeaways:
      • Impact of Operational Reserve Demand Curves in summer of 2014
      • Winter/summer pricing dynamics driven by dual natural gas pipeline capacity limits
      • Summer upside still exists for pricing
      • 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
      • 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
      • Key takeaways:
      • NEPOOL-GIS
      • PJM-GATS
      • WREGIS
      • NYSERDA
      • NARR
      • ERCOT
      • 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

Tables and charts

This report includes 34 images and tables including:

Images

  • Figure 17: US Emissions History and Forecast
  • Figure 18: Change in Emissions
  • Figure 19: Regional supply and demand balances
  • 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
  • Figure 15: US generation outlook by fuel class
  • Figure 16: Changes in generation by region 2014-2035
  • Figure 1: CPP Compliance Timeline
  • Figure 6: Henry Hub outlook
  • Figure 7: Price outlook and marginal plays
  • Figure 10: FOB coal price forecast (Real 2015 US$)
  • Figure 11: Base Case assumed carbon price
  • Figure 20: Supply Demand Balances: H1 2015 vs H2 2014
  • Figure 21: MISO Capacity Price Outlook
  • Figure 22: Changes in the Variable Resource Requirement (VRR) curve:
  • Figure 28: Supply Demand Balance
  • Figure 29: NYISO Cap Price forecast
  • Capacity Prices: Image 11
  • Figure 31: ERCOT resource economics for new generating capacity
  • Figure 32: SERC Southeast resource economics for new generating capacity
  • Figure 26: ISONE Supply Demand Balances: H1 2015 vs H2 2014
  • Figure 27: ISONE capacity price outlook
  • Figure 23: COMED supply curve:
  • Figure 24: PJM COMED and EMAAC Capacity Prices
  • Capacity Prices: Image 6

Tables

  • Table 1: Environmental Policy Assumptions
  • Table 2: ORDC Impacts in August of 2014
  • Table 3 NYISO ICAP Parameters

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