US POWER TRACKER: November PJM power prices decline, forwards higher on year

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PJM Interconnection power prices declined in November on month and on year, while forward power prices declined on month but remained higher on year with prices near or above $100/MWh for January and February.

"Wholesale power prices in November settled below our projections as natural gas prices moderated," S&P Global Commodity Insights power market analysts said in a recent research note.

PJM Northern Illinois Hub on-peak day-ahead power prices averaged $49.09/MWh in November, which was down almost 6% on year and 11% on month. On-peak real-time power prices at the hub averaged $48.36/MWh during the month, down about 29% on year and about 11% on month.

AEP-Dayton Hub on-peak day-ahead power prices averaged $56.34/MWh in November, a decline of about 13% on year and down about 31% on month. On-peak real-time prices at the hub averaged $53.92/MWh, which was about 20% lower on year and down almost 40% on month.

PJM West Hub on-peak day-ahead power prices averaged $58.53/MWh in November, down about 16% on year and almost 13% on month. PJM East Hub on-peak day-ahead power prices averaged $49.94/MWh in November, down about 5% on year and about 14% on month.

Spot Platts Texas Eastern gas prices averaged $4.62/MMBtu in November, down about 4% on year and roughly flat on month.

Year-to-date, electricity demand has grown by more than 1% in 2022 and is on pace to finally eclipse pre-pandemic levels, according to S&P Global.

PJM power demand increased in November as temperatures cooled heading into winter. Peakload averaged 93,489 MW in November, almost 10% higher than the October average of 85,066 MW, according to ISO data. PJM power demand was down about 1% on year in November.

The November average high temperature across the PJM footprint was 56.1 degrees Fahrenheit, compared with an October average high of 64.2 degrees F, according to CustomWeather data. The November average low temperature was 39.9 degrees F, compared with an October average low of 46.3 degrees F.

The cooler weather increased heating degree days from an average of 9.4 in October to an average of 16.8 in November.

Power generation fuel mix

Coal-fired power generation accounted for 15.6% of the PJM power generation fuel mix in November, up from 12.8% in October and 15.4% in November 2021, according to ISO data.

Gas-fired power accounted for 39.5% of the PJM fuel mix in November, down from 44.1% in October and 40.3% in November 2021.

Nuclear power supplied 35.2% of the PJM generation mix in November, up slightly from 34.3% in October and 35% in November 2021.

Hydropower accounted for 1.7% of the fuel mix, up from 1.3% in October and down from 2.0% in November 2021.

Wind power increased to account for 5.7% of the PJM generation mix in November, up from 1.3% in October and 2.0% during the corresponding period a year ago.

Non-wind renewables supplied 1.4% of the PJM fuel mix in November, down from 1.6% in October and flat with the non-wind renewables contribution from November 2021.

Forward power, gas prices

PJM West on-peak forward power prices for December averaged $87.26/MWh in November trading, which was down almost 8% on month and up by about 19% on year, according to Platts M2MS data. Forward power prices for January 2023 at the hub averaged $127.97/MWh in November, down about 8% on month and up about 37% on year. And forward power for February 2023 averaged $118.22/MWh, which was down about 3% on month and 35% on year.

AEP-Dayton Hub forward power prices for December averaged $81.11/MWh in November trading, down about 8% on month and up nearly 18% on year. Forward power for January 2023 averaged $110.22/MWh in November, up almost 31% on year, and forward power prices for February 2023 averaged $99.50/MWh, about 29% higher on year.

Northern Illinois Hub forward power prices for December averaged $73.37/MWh in November trading, down about 10% on month and up around 27% on year. Forward power for January 2023 averaged $93.36/MWh, which was a roughly 16% decline on month and about 31% higher on year. And forward power for February 2023 averaged $88.86/MWh, a monthly decline of about 9% and roughly 33% higher on year.

Platts Transco Zone 6 Non-New York forward gas prices for December averaged $8.15/MMBtu in November trading, which was mostly flat on month and about 26% higher on year. Forward gas for January 2023 traded at an average of $13.41/MMBtu in November, flat on month and about 51% higher on year. And forward gas for February 2023 averaged $12.78/MMBtu, which was also largely flat on month and about 48% higher on year.

"In this November short-term outlook, we have trimmed back expectations for winter power pricing modestly based on the evolving natural gas market dynamics," the S&P Global Analysts said.