CAISO: Wholesale power prices dropped 9% in 2016 to $34/MWh average
Along with low gas prices, healthy hydro reserves and a larger base of variable solar generation are pushing down CAISO power market prices. Last month, the grid operator reported that average March real-time energy prices dipped below zero twice daily:
The ongoing bout of negative pricing events this spring is partially due to seasonal influences, like low demand and higher hydro generation, California stakeholders told Utility Dive, but the market monitor report shows the underlying conditions of low gas prices and increased renewables pushed down market prices throughout 2016 as well.
Renewable generation, excluding hydropower, accounted for 20% of total CAISO power supply in 2016, the report notes.
“Renewable generation increased significantly in 2016 and is expected to continue to increase in the future. This will continue to drive the need for market and operational mechanisms to increase flexibility of resource schedules and ramping capability,” said Eric Hildebrandt, Director of Market Monitoring, in a statement.
Expansion of the Western Energy Imbalance Market, particularly adding Nevada utility NV Energy, helped boost the efficiency of dispatching generation and manage the intermittency of wind and solar on the grid, the market monitor noted.