Electricity Price Forecast Trends: Lots of Renewables as Clean Energy Policies Drive Resource Development
- August 25, 2020
- Carol Winkel
At the Council’s August power committee meeting, John Ollis, manager of planning and analysis, presented the preliminary findings of the Council’s wholesale electricity price forecast. The forecast is used in developing the Council’s resource strategy for its regional power plan.
The forecast includes updates on West-wide electricity demand, fuel prices, generating resources, and climate change data.
- Renewable resource development is set to outpace mandated requirements. Higher targets, from many different policies at the utility, municipal, and state level, are driving resource decisions.
- Additional coal plant retirements have been announced.
- California’s demand forecast is higher than expected.
- Climate change data indicates Northwest summers will be hotter and experience more peaks in electricity use. The region’s hydro generation will also be less than average, exacerbating the problem.
One significant trend will be lower wholesale electricity prices in the Northwest as more renewables come online. Prices are also likely to fluctuate during the day due to solar generating a lot of electricity when the sun is shining and dropping off at night. The well documented duck curve, when solar generation surges during the day, will intensify, resulting in negative prices in the middle of the day by 2041. Energy planners are looking at ways to offset that effect, so having a diverse variety of resources to draw on will be important.
“When you get to the point when energy is free, it’s all about resources you can turn on and off as needed,” noted Ollis.
Batteries, Demand Response, Pumped Storage
In a world where renewables rule, the ability to store power or access power when it’s needed, will be a high priority. Northwest hydropower has been valuable in this role in the past. But, as increased renewable buildout drives short-term capacity needs in the WECC, other energy limited resources like batteries, pumped storage and demand response are likely to be a bigger piece in the puzzle.
“It’s a complex environment we’re in, so it’s hard to know where we’re at and what’s ahead,” said Ollis.
The Council’s System Analysis Advisory Committee will be examining the model’s findings more closely and Ollis will be presenting more on this topic at the Council’s September meeting, so stay tuned.