US POWER TRACKER: ISO-NE forward power prices peak in January, sufficient capacity expected

ISO New England forward power and natural gas prices softened slightly on month in November trading and remained we below year-ago levels as they have for much of 2024. With gas accounting for nearly 60% of the November power generation fuel mix, the ISO said it expects to have sufficient capacity for winter power demand but gas deliverability will be critical.

Mass Hub on-peak forward power prices for December averaged $65.83/MWh in November trading, down about 7% on month from $86.15/MWh and down about 54% on year from $162.55/MWh, according to Platts M2MS data.

Forward power at the hub for January 2024 averaged $117.47/MWh in November, down about 4% on month from $136.00/MWh and down 46% on year from $253.26/MWh, and the forward package for February averaged $108.94/MWh a decline of 4% on month from $119.68/MWh and down about 48% on year from $244.45/MWh.

Forward gas prices were down by similar margins, with December forwards averaging $6.70/MMBtu in November trading, down 28% on month from $9.32/MMBtu and down 64% on year from $18.73/MMBtu.

Forward gas prices for January 2024 averaged $13.32/MMBtu, down 11% on month from 15.00/MMBtu and down 56% on year from $30.01/MMBtu. Forward gas for February averaged $12.31/MMBtu, down about 12% on month and down 59% on year from $29.71/MMBtu.

Power generation fuel mix

Gas-fired power accounted for 57.8% of the ISO-NE power generation fuel mix in November, up from 56.2% in October and 49.1% in November 2022, according to ISO data.

Nuclear power accounted for 20.0% of the fuel mix in November, down from 23.3% in October and 29.5% in November 2022.

Hydropower supplied 8.4% of the November fuel mix, down from 8.9% in October and up from 8.2% in November 2022.

Solar power accounted for 3.0% of the fuel mix in November, down from 3.4% in October and up from 2.7% in November 2022. And wind power accounted for 4.5% of the November fuel mix, up from 3.2% in October and down from 5.4% in November 2022.

Winter power supply/demand outlook

ISO New England's winter power demand is estimated to peak at 20,269 MW(opens in a new tab) during average conditions and 21,032 MW under colder than normal temperatures, an increase of 1.3% from last year's forecasts, with a total of 33,374 MW of total resources available to cover projected peakload, the ISO said Dec. 4.

The grid operator said it does not anticipate calling for controlled power outages and would resort to this "drastic step" only to prevent a power system collapse that would take days or weeks to repair. In the event controlled power outages are needed, the ISO would coordinate with local utilities, which would then take the necessary actions to lower electricity demand in their areas, according to a statement.

For the past four years, ISO New England has published a detailed power supply outlook that provides a rolling three-week analysis of anticipated power system conditions including data on various factors like weather, availability of pipeline natural gas, and expected production from wind and solar resources.

The goal of the forecast is to provide an early warning of potential energy shortfalls that could impact reliable operation of the regional power grid if stored fuels like LNG run low, especially during periods when the gas pipeline system may be constrained.

This is also the first winter using the "Inventoried Energy Program," a two-year initiative that provides incremental compensation to resources that maintain inventoried energy during cold periods when energy security is most stressed. The ISO said it has seen "strong participation" in this program from resources entering the winter.