FERC Issues Summer 2017 Energy Market and Reliability Assessment

ecapacity

On June 15th, FERC Office of Electric Reliability and Office of Enforcement issued its Summer 2017 Energy Market and Reliability Assessment.  A copy of the report can be found here.

Here are a few takeaways from the report:

  • Capacity levels are expected to be adequate this summer.  Load forecasts and generation forecasts are essentially on par, with large amounts of new renewable resources offsetting the 4 GW of coal-fired and 6 GW of natural gas-fired plants that have been retired.  The narrowest reserve margins are in ISO New England (15%) and ERCOT (15%) but each is still at or above its reference margin level.
  • The National Oceanic Atmospheric Administration (NOAA) forecast above normal conditions this summer in the U.S., with the North Atlantic, Southeast and Gulf of Mexico regions holding the strongest possibility for a hot summer.
  • Natural gas prices have risen year over year, and a year in which natural gas generation exceeded coal-fired generation for the first time (2016).  Both coal and natural gas prices have risen from their recent five-year lows, and summer 2017 futures contracts of natural gas were trading at a $0.43/MMBtu premium to coal.  Natural gas futures continue to rise, ranging from a $0.38/MMBtu to $0.88/MMBtu regional increase from the prior summer.
  • Overall summer power futures have increased in the range of 9-11 percent, with the sole exception being the PJM Western hub, which has decreased 3 percent.
  • FERC continues to monitor changes and impacts resulting from increased demand response, the Aliso Canyon, and the upcoming August 21 solar eclipse.

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