Spot electricity prices fall slightly
Rising gas consumption in a context of rising coal prices
As spring approaches, PJM Interconnection’s wholesale electricity prices are down slightly from March, but remain much higher than a year ago, while the fuel mix for generation of electricity switched from coal to natural gas during the month.
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“Temperatures on the PJM footprint were 3 degrees Fahrenheit above normal in March, a similar range to March 2021, and this kept PJM’s overall electricity demand stable year-over-year. “said S&P Global Commodity Insights in a recent research note.
According to data from CustomWeather, the average high temperature for March on the PJM footprint was 54.8 degrees F, compared to an average of 43.8 degrees F in February.
The average low temperature in March was 37 degrees F, compared to an average of 26.9 degrees F in February. Due to warmer temperatures, the average heating degree days fell from 29.1 in February to 18.7 in March.
PJM’s peak load averaged 94,633 MW in March, down 11% from February’s average peak load of 105,945 MW. In March 2021, peak load averaged 91,609 MW, according to ISO data.
Electricity prices from PJM East Hub saw the largest monthly decline and the smallest year-over-year change of the major rate centers. Peak power prices for East Hub averaged $43.34/MWh in March, down about 19% on the month and about 20% higher than there are. a year.
PJM West hub peak-hour power prices averaged $48.29/MWh in March, about 8% lower on the month and 85% higher than the March 2021 average of 26 $.09/MWh.
Peak day electricity prices at the AEP-Dayton Hub averaged $46.98/MWh in March, down 2.27% on the month and down about 83% over the year. Real-time peak hour electricity prices at the hub rose just under 2% on the month and rose 72% on the year to average $45.90/MWh in March.
Northern Illinois peak-hour power prices averaged $40.69/MWh in March, down 2.39% on the month and about 77% higher on the year .
Spot natural gas price developments were mixed in March, with Platts Texas Eastern prices averaging $4.46/MMBtu, down 22% from February and about 102% higher than the March 2021 average.
Chicago city gate prices rose 2.61% per month in March to average $4.60/MMBtu, about 86% higher than a year ago.
Energy mix for power generation
“Steady month-to-month gas delivery in March just above 35 aGW was accompanied by a sharp decline in coal-fired generation, which fell to below 16 aGW following the significant impact of soaring coal prices in the Illinois Basin and Appalachia,” S&P Global power market analysts said.
Coal power accounted for 18.4% of PJM’s power mix in March, down from 23.8% in February, according to ISO data.
“We expect coal production to continue to decline between April and May as coal prices are driven by a very tight marine market, while current LNG export conditions, already on the verge of maximization, provide a cap on gas prices,” S&P Global said.
Gas-fired power accounted for 38.3% of the generation mix in March compared to 35.1% in February, while nuclear power provided 33.6% of PJM’s generation mix in March, compared to 32.1% in February.
Hydro, wind and non-wind renewables all accounted for larger shares of the energy mix in March, averaging 2.5%, 5.2% and 1.5% respectively.
Forward power, gas price
PJM West Hub power futures prices for April averaged $56.56/MWh in March, up 5.8% on the month and around 100% up on the year. The May contract averaged $59.72/MWh, 11% higher on the month and 105% higher on the year, while the June contract averaged $60.74/MWh, a monthly increase of 12% and 107% more over the year, according to data from Platts M2MS.
AEP-Dayton Hub power futures prices for April averaged $55.64/MWh in March, about 6% higher on the month and 94% higher on the year. The May contract averaged $59.00/MWh, 11% higher on the month and 100% higher on the year. The June contract averaged $60.22/MWh, up 12% for the month and 100.2% for the year.
Forward Platts Transco Zone 6 Gas prices outside New York also strengthened heading into summer in March trading. The April contract averaged $4.12/MMBtu, an 8% monthly increase and an 88% year-over-year increase. Gas futures prices for the month of May averaged $4.14/MMBtu, about 14% higher on the month and 92% higher on the year, while the June contract averaged $4.26/MMBtu, ie 13% more for the month and 92% more for the year.
“With nuclear refueling largely limited to April and again into the fall months, our power price outlook for the rest of the year finds support around $40/MWh, while moving above $50/MWh. in the summer,” S&P Global said.