One thing is for sure, it’s going to be a hot one this summer. Our expert power market analysts break down the summer forecasts for ERCOT, PJM and CAISO SP-15 in our recent Summer Outlook Series. Get a first look at the weather forecast and analog years, the load growth or demand destruction, how new builds and policy changes will impact the market, transmission outages and price forecasts.
Our team also takes a closer look at some congestion risks and challenges facing each ISO. Whether you are preparing to site a new project, manage your assets or trade, understanding how to navigate and mitigate these risks is necessary to make better decisions and enhance profitability. We give a quick take below but be sure to check out the full outlook for each ISO and let us know if you need additional support preparing for the summer.
ERCOT Quick Take
Challenges for Summer 2022:
- Drought conditions could lead to record high temperatures throughout the summer.
- ERCOT Load Growth nears 10% since 2020 with no new thermal baseload generation.
- Older marginal thermal units ran more hours earlier in the year and may be at increased risk for unanticipated summer outages.
- ERCOT sees more significant ramp hour volatility later in the evenings coincident with solar ramp down with not enough battery capacity to arrest the decline.
Operational Tools to Mitigate These Challenges:
- Demand Response: 4CP programs and Load-Side Reductions will play a critical role in the risk outcomes this summer.
- Increased Solar Capacity will fundamentally affect base-load summer supply.
- ORDC curves have a lower maximum, but wider effect at higher Operating Reserve levels.
PJM Quick Take
- Risks for PJM include the large number of retirements impacting the stack heading into summer and increased forced outages with excessive ambient temperatures (approximately 43 gigawatts of natural gas generation built between 1999-2007).
- Externally for PJM the risk comes from its neighbor MISO, which will be depending on exports throughout the summer.
- MISO projected the need for increased, non-firm imports and potentially emergency resources to meet the 2022 summer peak demand with warmer-than-normal temperatures forecasted throughout the MISO footprint. The summer peak forecast is 125.2 gigawatts with 114.9 gigawatts of projected generation within MISO after you consider outages and derates (NERC Assessment Highlights).
- September 21, 2017, shortage pricing 22 intervals, RTO synchronized reserves & Primary Reserves *shortage of second step of ORDC, partly due to MISO emergency conditions & the need for exports.
CAISO SP-15 Quick Take
Challenges for Summer 2022:
- A 2018 type summer temperatures pattern could cause summer capacity issues.
- Severe to Exceptional Drought conditions could lead to record elevated temperatures throughout the summer.
- Net loss of 310 MW of thermal units.
- Supply Chain Disruptions are causing new units to not enter the grid on time. Further delays into the summer would be a problem.
- Wildfires (especially in the northwest) could cut off local or regional imports of renewable power to the load centers.
- High Gas Prices are likely to continue through the summer.
Mitigating Factors To These Challenges:
- Most Analog years show near to below average temperatures especially 2011.
- COVID-19 has caused demand destruction and SP-15 load still has not recovered to pre COVID levels
- Net new megawatts vs. retirements over last year is 205 megawatts.
- Late season runoff and heavy mountain snow in British Columbia and western Montana should provide high summer Hydro-Generation and strong imports from the northwest.
