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Fleeing to the Light (Load)

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Much of the discussion tied to renewables so far in 2024 has revolved around solar generation, and the great leaps made in installed capacity and MW hitting the grid in markets all across the country.  In the Midwest and Northeast, both PJM and MISO are seeing significantly increased solar generation and MISO is seeing the added solar impacting evening price formation despite solar penetration still remaining relatively low.  ERCOT is seeing market disruptions of its own with its version of the duck curve and capacity concerns tied to structural demand growth have left the evening ramp exposed in such a way as to depart from the way thermal resources have been dispatched historically, with ERCOT’s coal units now behaving more like peakers plants.  We’ve discussed both phenomena in previous Special Reports, most recently “MISO’s (Solar) Step to the Right” and back in January with “ERCOT’s Hazy Horizon”.  Perhaps most remarkably, over in California where solar has been a mainstay for years, 2024’s increases to solar output has sent CAISO into disarray, with rampant midday oversupply issues in Southern California leading to MW getting stuck with limited export capacity and congestion issues driving SP15 prices down persistently. 

Figure 1 | SP15 May RT LMP Distribution, Midday Hours (HE 10-16) 

The figure above illustrates the sharp swing in the SP15 price distribution, with negative midday prices popping up routinely this spring compared to previous years.  This has led to solar curtailments in CAISO, but is not limited to solar, with significant impacts to CAISO's dispatchable resources.  This article details the response of CAISO hydro to the new price environment, as the resource flees the solar light and towards the nighttime light load.  It is available for purchase via the link below, as well as a part of our eCommerce package at the Gold level.