Electricity Prices Soar Past $200 per Megawatt-hour as Heatwave Hits Eastern United States

Or a (really hot) day in the life of the power grid

With a heatwave settling across the northeastern and midwestern United States, electricity systems across some of the nation’s most densely populated areas strained to meet peak demands today, sending power prices spiking.

Wholesale electricity prices briefly touched as high as $230 per megawatt-hour in New England at about 2:30pm this afternoon as temperatures hit 95 in Boston and the humidity pushed the “real feel” index towards 100 degrees. The chart below, from the New England Independent System Operator (ISO-New England) illustrates how power system prices evolve and peak as demand reaches its zenith on a hot summer day.

 ISO-New England 5-minute Real-time Wholesale Power Prices for July 17, 2013

Wholesale “nodal” prices across the PJM system, which spans from the mid-Atlantic states westward through Ohio, West Virginia and parts of Indiana, Kentucky and Illinois, also ranged from $150 to $200 per megawatt-hour as of 3:35pm (click the image below to enlarge).

PJM Locational Marginal Prices Contour Map for 3:15pm Eastern Time, July 17th 2013

For comparison, peak wholesale prices today in ISO-NE and PJM were about three to five times higher than typical wholesale prices, which frequently range from 35 to 60 per megawatt-hour.

Sweltering temperatures from Washington D.C. to Boston were responsible for the rise in power demand, as air conditioners cranked up to keep residents of the nation’s most densely populated corridor of the country cool. Power demand peaked today in New England at 26,500 megawatts today, equivalent to the output of more than 26 large nuclear reactors.

In response to higher-than-normal power demands, system operators in New England fired up the region’s peaking power plants, which in many cases still run on costly fuel oil in this region. Fuel oil-fueled plants provided 7 percent of the region’s power supply as of 3:00pm this afternoon. You can see the mix of fuels in the New England system in the graphic below.

ISO-New England Electricity Generation Fuel Mix for 3:00pm July 17th 2013

For most consumers of electricity, however, flat tariff rates mean most of us don’t see a price signal when the prices of wholesale power spikes. Except for areas where demand response programs are underway, AC units keep humming away and other energy uses continue as if it were business as usual, despite the strain put on the power grid and the increasingly costly fuels and power plants operated to meet summer-time peak demands.

Note that ISO-New England analysts project that power demand across the system will peak even higher tomorrow, at 27,600 megawatts, as the current heat wave streches on through at least Friday.

You can check in on the power system and wholesale power prices in New England in real time with the ISO-New England Dashboard here, and view real-time contour maps of locational marginal prices in the PJM region here. Keep an eye on them tomorrow and friday afternoon, and you’ll get another tour through a (really hot!) day in the life of the grid.

Energy Collective

12 Comments on "Electricity Prices Soar Past $200 per Megawatt-hour as Heatwave Hits Eastern United States"

Arthur on Thu, 18th Jul 2013 10:37 am 



In Europe that’s the normal price level for ages now 24/7/365. But nobody needs to have airconditioners here.

sandu on Thu, 18th Jul 2013 11:27 am 



Arthur that only happens in winter peaks in Europe were you get up to 200 euro. Summer peak prices are around 70 euro because France’s nuclear and Germany’s solar keep summer peaks manageable.
Europe has better interconnects between countries and that help a lot

TIKIMAN on Thu, 18th Jul 2013 11:53 am 



The “heatwave” has been the top story on sheeple news every night. Having temps in the mid 90’s for half a week is not news worthy, let alone a heat wave. Welcome to summer people.

BillT on Thu, 18th Jul 2013 12:11 pm 



So, if my math is correct $200 divided by 1,000 = $0.20/kWh. Chicken feed!

It has been OVER $0.25/kWh here in Makati for more than 5 years, and you DO need A/C if you live in a condo with poor design for ventilation. (Most studios, like mine). My electric bill has averaged about 6,000 Pesos/month or $150. My rent is only 15,000 Pesos/month. During the late dry season here when temps AVERAGE 85-90F for weeks at a time, my bill spikes to 8,000 Pesos, even if I keep the condo at 80F. If I want to rent a one bedroom with some cross ventilation, the rent goes up to 20,000+ so I stay in my condo. I’m anxious to get to the farm where the ocean breezes will do it for free.

Arthur on Thu, 18th Jul 2013 12:47 pm 



Here are the prices in Europe 2007.

http://www.cbs.nl/nl-NL/menu/themas/industrie-energie/publicaties/artikelen/archief/2007/2007-2187-wm.htm

I checked it for Holland, it is now 25 euro cent = 33 dollar cent.

Fine, the higher the better, so the road is paved for rapid introduction for wind and solar.

Arthur on Thu, 18th Jul 2013 12:51 pm 



– Britain dominated the 19th century. Why? Because they were the FIRST to exploit COAL in combination with the steam engine.

– The USA dominated the 20th century. Why? Because they were the FIRST to exploit OIL in combination with the combustion engine.

– Now who is going to dominate the 21st century?

http://tinyurl.com/qdswdam

Kenz300 on Thu, 18th Jul 2013 1:56 pm 



Solar Costs and Grid Prices On a Collision Course

http://www.renewableenergyworld.com/rea/blog/post/2013/07/solar-costs-and-grid-prices-on-a-collision-course

Arthur on Thu, 18th Jul 2013 2:22 pm 



Kenz’ link illustrates perfectly why solar is taking off in Europe and not in the US: diverging fossil fuel based energy prices.

GregT on Thu, 18th Jul 2013 3:15 pm 



We have lived as a species on this planet for tens of thousands of years, within the natural environment that we call the Planet Earth. We found a finite energy source, and proceeded to create a false manmade environment within the real environment, and we are determined to not give it up, as futile as that attempt will be.

I find it very ironic, that our desire to regulate the temperatures of our indoor environment, is in part responsible for the destabilization of the real, natural environment. As we move further away from nature, nature is becoming more inhospitable, and as Guy Mcpherson so succinctly points out; Nature Bats Last.

sandu on Thu, 18th Jul 2013 5:35 pm 



Those are not Europe wholesale prices, those include high voltage transport, medium voltage transport, services and taxes for electricity.

France market prices (In Holland they are ~ +5% more )

http://www.eex.com/en/Market%20Data/Trading%20Data/Power/Hour%20Contracts%20%7C%20Spot%20Hourly%20Auction/Hour%20Contracts%20Chart%20%7C%20Spot%20Hourly%20Auction/spot-hours-chart/2013-07-19/FRANCE/7/1y

DC on Thu, 18th Jul 2013 9:24 pm 



Amerikans, well lets expand that to North Americans, poorly designed buildings and homes soak up heat like sponges at the slightest rise in temperature. This is a feature, not a bug. In order to ‘cool’ these ramshackle homes, office towers and whatnot, massive centralized system that consume obscene amounts of water and energy has to kick in, or else people start to die. None of our engineers or builders know anything about passive design or materials. The age of cheap oil and power didnt just make us lazy-it made us *stupid* as an added bonus. No one knows how to build passive anything-all they know is AC\HVAC.

Humans were able to survive, even thrive in almost ALL climates for countless thousands of years without HVAC systems, and Eastern N.A is hardly what one would call an ‘extreme’ environment. US caused AGW notwithstanding. Now, in this modern high-tech age, real heat waves kill lots of people, mostly the very young and old. And they mainly die trapped in those sawdust shacks or left in abandoned cars while ‘mom’ shops in an AC mall for plastic garbage at discount prices.

Fulton J. Waterloo on Fri, 19th Jul 2013 3:22 pm 



DC : right on target, as usual…
TIKIMAN: deluded denier