Commodity market report
WECC power markets short-term outlook January 2016
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Report summary
Power demand in the current outlook remains steady; however, downside forces are accumulating. Declines in power prices are partially being offset by increasing implied market heat rates. However, recent and forthcoming capacity additions in ERCOT continue to compress prices. In other markets, nuclear retirements will have a significant impact on Northeast operations. In the WECC, the 2016 Pacific Northwest hydro run is expected to be about 6 percent lower than previously forecasted.
What's included
This report contains
Table of contents
- Executive summary
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Fundamentals
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Natural gas prices slightly stronger for balance of the winter season
- Coal supply will reinforce any weather driven downturn in the outlook
- Oil surplus to help tighten gas markets
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Natural gas prices slightly stronger for balance of the winter season
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Generation balances and prices
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Eastern power prices continue to remain under pressure from both supply and demand risks
- Power demand remains a downside risk as industrial production lags
- Renewable additions highlight changes in capacity mix
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Few positives, although regional implied market heat rates suggest some support for gas-fired generators
- Nuclear uncertainty highlights the Northeast
- WECC demonstrates correlation of power and natural gas markets
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Eastern power prices continue to remain under pressure from both supply and demand risks
- Scenario Overview
Tables and charts
This report includes 5 images and tables including:
Images
- Figure 1: Changes in Eastern power market fundamentals (Relative to December 2015 LTO)
- Generation balances and prices: Image 3
- Figure 4: Relative changes in WECC markets’ power price metrics
- Generation balances and prices: Image 2
Tables
- Figure 5: North American power generation balances and fuel prices
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