Electricity Prices Soar Past $200 per Megawatt-hour as Heat Wave Hits Eastern United States
- Jul 18, 2013 9:40 am GMT
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Or a (really hot) day in the life of the power grid
An update for July 18th, which ranks as the #9 peak demand day in New England history is below…
With a heat wave settling across the northeastern and midwestern United States, electricity systems across some of the nation’s most densely populated areas strained to meet peak demands today, sending power prices spiking.
Wholesale electricity prices briefly touched as high as $230 per megawatt-hour in New England at about 2:30pm this afternoon as temperatures hit 95 in Boston and the humidity pushed the “real feel” index towards 100 degrees. The chart below, from the New England Independent System Operator (ISO-New England) illustrates how power system prices evolve and peak as demand reaches its zenith on a hot summer day.
Wholesale “nodal” prices across the PJM system, which spans from the mid-Atlantic states westward through Ohio, West Virginia and parts of Indiana, Kentucky and Illinois, also ranged from $150 to $200 per megawatt-hour as of 3:35pm (click the image below to enlarge).
PJM Locational Marginal Prices Contour Map for 3:15pm Eastern Time, July 17th 2013
For comparison, peak wholesale prices today in ISO-NE and PJM were about three to five times higher than typical wholesale prices, which frequently range from $35 to $60 per megawatt-hour.
Sweltering temperatures from Washington D.C. to Boston were responsible for the rise in power demand, as air conditioners cranked up to keep residents of the nation’s most densely populated corridor of the country cool. Power demand peaked in New England at 26,500 megawatts today, equivalent to the output of more than 26 large nuclear reactors.
In response to higher-than-normal power demands, system operators in New England fired up the region’s peaking power plants, which in many cases still run on costly fuel oil in this region. Oil-fueled plants provided 7 percent of the region’s power supply as of 3:00pm this afternoon. You can see the mix of fuels in the New England system in the graphic below.
ISO-New England Electricity Generation Fuel Mix for 3:00pm July 17th 2013
For most consumers of electricity, however, flat tariff rates mean most of us don’t see a price signal when the prices of wholesale power spikes. Most of us are charged the same rate per kilowatt-hour of consumption regardless of how expensive (or cheap) power production is at any given time. Except for areas where demand response programs are underway or customers are on real-time pricing tariffs meant to reflect market conditions, that means our AC units keep humming away and other energy uses continue as if it were business as usual, despite the strain put on the power grid and the increasingly costly fuels and power plants operated to meet summer-time peak demands.
Note that ISO-New England analysts project that power demand across the system will peak even higher tomorrow, at 27,900 megawatts, as the current heat wave streches on through at least Friday.
You can check in on the power system and wholesale power prices in New England in real time with the ISO-New England Dashboard here, and view a real-time contour map of locational marginal prices in the PJM region here. Keep an eye on them tomorrow and friday afternoon, and you’ll get another tour through a (really hot!) day in the life of the grid.
Update: July 19th:
Peak system load on Thursday July 18th topped out at 26,881 megawatts at 2:45 pm. While that fell about 1,000 megawatts short of the day’s forecasted peak, that would still put Thursday in the #8 slot for Top 10 Demand Days in ISO-New England, and would bump Wednesday July 17th’s peak of 26,661 megawatts off the Top 10 list and into the #11 slot.
ISO-New England is projecting another record day today, however. The system may peak as high as 27,850 megawatts Friday if the forecast holds. That would be sufficient to place July 19th in the #2 slot for record demand days in New England.
As the system heated up Thursday, five-minute real-time electricity prices also rose as high as $672.41 per megawatt-hour. Prices held steady above $200 per megawatt-hour for most of the daytime hours and spiked higher numerous times over the course of the record demand day. Average hourly prices reached as high as $466.07 as temperatures peaked around 3:00 pm. See graphs below to see how wholesale prices behave on a record demand day…
ISO-New England 5-minute Real-time Wholesale Power Prices for July 18, 2013
ISO-New England Hourly Wholesale Power Prices for July 18, 2013
Update: July 24th:
Rounding out a record-setting week: total ISO-New England system demand reached 27,377 megawatts on Friday July 19th. That ranked in as the fourth highest demand day in New England history. It also bumped Thursday July 18th down to the #9 slot in the Top 10 and moved Wednesday July 17th into 12th place.