Data Tool Shows Pandemic’s Impact on Power Prices
A clean energy valuation and risk analytics company said that low demand for energy during the COVID-19 pandemic, along with low prices for natural gas and strong power generation from renewable energy resources, has brought unprecedented low prices for electricity in multiple U.S. markets.
REsurety said its Renewable Energy Market Analytics Platform (REmap) shows that the production-weighted wholesale price of electricity for wind projects fell to all-time lows in recent weeks and months across markets including the Southwest Power Pool (SPP), PJM Interconnection, and the Midcontinent Independent System Operator (MISO). The company said production-weighted prices dropped below $2 per MWh in areas with a high penetration of wind power, such as Oklahoma.
REsurety, which publicly announced the launch of its REmap database on May 28, said the tool integrates weather and power market data on a large scale. The system calculates hourly financial performance for 15,000 operational and greenfield locations. REsurety, founded in 2012, has long used the data to provide the company’s clients with information to make decisions about renewable energy projects.
REsurety CEO Lee Taylor told POWER the company is “expanding the access to our secret sauce.” Taylor said REsurety for years has used its proprietary database and analytics to support the analysis of hedging instruments around renewable power projects. The public release makes that insight available by subscription to support a broader set of use cases, including greenfield prospecting, mergers and acquisitions diligence, and offtake and hedge analysis.
Global Power Demand Declines
The International Energy Agency (IEA) in its recent Global Energy Review 2020 said worldwide demand for energy declined by 3.8% over the first quarter of 2020 due to lockdowns related to the coronavirus pandemic. The agency said demand this year could fall by as much as 6% compared to 2019 levels.
Much of that drop is attributed to the closure of schools, offices, and industrial facilities, as residential demand for power rises with people working from home. Sense, a Cambridge, Massachusetts-based company whose products measure and analyze home electricity use, last week released a report that said average home electrical usage since the COVID-19 pandemic was declared in the U.S. jumped 22% from the similar March-April period in 2019.
The company, whose investors include Schneider Electric and Landis + Gyr, said residential electricity demand typically falls in March and April as warmer spring weather arrives, but the opposite occurred this year with most people under stay-at-home orders. The company noted that electricity costs are likely to rise this summer if most people are still at home, due to the need to use air conditioning for cooling, which drives summer power demand.
Sense analyzed data for 5,000 homes, each with a Sense Home Energy Monitor, across 30 states. Sense noted that mid-day demand for electricity typically falls, because people would normally be at work and school, but the pandemic reversed that, with higher energy usage beginning as early as 5 a.m. and peaking at 4 p.m., then falling into the night.
