In a recent post, we examined how energy investors and traders can use Enverus Trading & Risk’s PRT, the market’s most accurate forecast tool, to identify future money-making opportunities with pinpoint accuracy. In the wake of a PJM load error this month that caused a huge real-time price spike, let’s look at how PRT helps you avoid losing money.
On Oct. 1, real-time prices rose above $600 after the ISO Day-Ahead forecast missed the load forecast by more than 10,000 MW. High temperatures throughout the PJM region were 10-15 degrees above average, including:
- Chicago: 86 degrees—18 degrees above average
- Philadelphia: 84 degrees—12 degrees above average
- Washington D.C.: 87 degrees—13 degrees above average
As a result, peak load soared 141% above average. The hour-by-hour breakdown below shows a couple of time blocks in particular when these errors caused the real-time market prices to hit nearly $400:
- Hour 16:00: the average ISO error was -10,106 MW
- Hours 14:00-19:00: the average ISO error was -8,200 MW
PJM utilities that were exposed to the load error, and had to buy power to make up for this error, would have been exposed to losses of nearly $20 million!
However, a utility that had the Enverus Trading & Risk PRT forecast would have saved $14 million.
The largest PRT error was -4,600 MW at hour 15:00. The average PRT error for hours 14:00-19:00 was only -1,360 MW.
Warren Buffett has famously said there are two simple rules of investing: “Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1.” The Enverus Trading & Risk PRT solution can play an invaluable role in both identifying bullish opportunities for you to capitalize on, and just as importantly, provide you with the real-time data you need to avoid losing money.
Follow this link to learn more about how our PRT suite provides you with the industry’s most accurate and current online forecasting services for electric load and price, gas demand, and solar and wind power.
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