Genscape’s NYISO power market analysts provide their outlook for the season ahead.
Hello everyone we’re just going to give it a few more minutes i see people are still signing in so please hold on we’ll be right back hello everyone once again uh this is our manufacture we’re going to have the new york summer outlook for 2015.
Um i am a i’m an iso analyst i’m also here with patrick higgins uh he’s a meteorologist for ford iso he will present the slides about the weather and demand uh in the meantime uh during this presentation if you have any questions please type them up
We will answer at the end of the presentation and if we can’t get it to you right away we will get in touch with you personally and also in the left you’ll see presentation slides if you click on it you can actually download the slides we will also email them to endless recording
After the presentation and also as you may have noticed there’s a survey on the left feel free to take it please we strongly encourage and appreciate your comments and feedback uh so in today’s agenda uh we’re going to look back at last summer just to
Have an idea of uh what to expect uh what your summers look like in in iso and then we will share with you our expectations uh for this coming summer especially generation and congestion looks like there are going to be some changes and then we will finish with a quick summary
So i would like to hand it over to patrick to uh take us through weather on demand all right yeah um just to get going we’re first sliding the load here uh yeah looking at this summer uh we’re expecting it to be slightly warmer than normal that’s
Mostly in the north and west as you’ll see there we go so yeah we’re expecting some warm anomalies in the north and west uh it looks like there’s going to be a nice pool of warm air in the midwest and that’s going to kind of drag into
New york state as far as new york city goes we’re expecting it to be about seasonal uh but at the same time that’s going to be warmer than last year because we never really saw that sustained heat make it into the city as far as what the drivers of the forecasts are the
Main one that i think everyone’s looking at is el nino so that’s a pool of warm water in the central pacific and then also the big one that’s really going to swing the forecast is we’re expecting the ridge in the northern pacific which is caused by warm waters over there
We’re expecting that to regress as the season goes on so if that doesn’t happen there are some cooler risks but we’re expecting it to break down and give us those warm anomalies so heading into the monthly breakdown uh we’re expecting june to basically look like the anomaly map that we have for this
Summer as a whole uh we’re expecting seasonal conditions for new york city and then slightly warmer than normal and like zone a and in the north as far as our projected peak for the month we’re going with 29.4 gigawatts and then heading into july uh that’s when we really started to see
Things warm up uh we have warmer than normal conditions for the entire state especially that north and west area as well and that’s we see our peak actually come in at 32 gigawatts which is i think about three gigawatts higher than we saw last year and last year we didn’t even see
Our peak for the year come in during meteorological summer we saw it coming in september so we’re definitely expecting it to be a lot different than last summer and then heading into august we start to see some cool anomalies creep in from new england but overall the state as a whole we’re
Expecting it to be seasonal another 29 gigawatt peak for the month so just delving a little further into why we’re expecting that peak to be a lot higher than last summer as you can see here this map shows the departure from normal temperature for last summer and you can see that basically the
Entire state was cooler than normal and the biggest factor was we never got any sustained heat so new york city only hit 90 degrees twice and we never actually got above 90 we only got to 90 degrees and those weren’t even in a row so we never saw that building cooling
Load day over day until just the first week of september when we got our peak for the season so yeah we’re expecting temperatures to be slightly higher than last year but we’re definitely expecting it to be more sustained heat and just looking a little further into basically peak demand and how temperatures
Correlate towards that uh so from 2011 to 2013 our peak for the summer ranged from 32.4 to 33.9 gigawatts and then we came in we saw last year 29.3 on july 1st 29.8 on september 2nd so as i said before why is that so low no sustained heat never really got above
90 and only got above 85 degrees for a few multiple days so although we’re only seeing those seasonal conditions for new york city we’re still expecting it to be a lot warmer than last year so just moving on to the last slide here uh just a little quick breakdown on tsa risk
Taking a look at what we saw last august that’s actually pretty similar conditions to what we’re expecting for the summer as a whole we’re seeing drier than normal conditions especially in the eastern half of the state so that covers that corridor between albany and new york city
So breaking down tsa last summer we saw 14 hours of tsa alert status in june 30 hours in july and only 10 hours in august so if we get what we’re thinking it’s going to be pretty similar to august and we’re not going to see too many
Tsa alerts so just closing up there pass it back to armand he’ll cover more into the summer look back thank you patrick uh yeah so uh taking over here uh this is a slide about a last four years summer june july and august uh zone a and zonji
They had market prices we just put it here to give you an idea of what to expect prices to come in what the trend is looks like last uh last year in june we were more expensive mostly because there were line outages in in in june last year that drove
Uh congestion and also demand in june was actually even though the summer on average was lower uh the clear demand uh in june was actually pretty uh pretty comparable so you can see the prices in june were uh higher or uh at average or very similar to 2013 summer but then
July and august were a little bit less than that and then in the next slide we will look at demand uh that cleared um sold waiting okay so uh we see the very uh similar transfer prices uh in june uh clear demand were pretty similar to this 2013 uh but then
July and august it went down again looking at gas prices in the summer in iso it does not actually uh play the biggest role because in the summer time our gas is not as expensive as in the winter z2 gas prices last two were a little bit
Above average but z6 was lower lowered this summer we are not expecting any major changes we are expecting uh uh there is a maintenance going on on uh algonquin gas pipeline this summer we don’t think it will be a a significant driver of prices uh either gas or
I don’t think it’s going to impact new york as much but it’s good to know we will keep an eye out on it but uh overall our gas prices are expected to uh come in cheap uh look okay we’re going to start the summer outlook now
Uh just uh waiting for the slides to to load okay we’re going to start with our generation analysis um i i know uh the slide can be a little bit uh full of wording but to summarize it for you basically we are not expecting any generation outages
This summer at least nothing major that that’s worth talking about but um we have a lot of very important generation editions uh mostly ball line and dance camera both in zone g and the reason uh those two uh enter the spy stack this summer is because last september niso
Published an rna a reliability needs assessment and they basically said uh come 2019 we are going to have a lot of constraints in new york city area we just don’t have enough generation in that area so they were uh trying to find a solution to that they
Came up with a new capacity zone in zonji that would give all the generation in zonji a lot of incentive so that brought back boldline and dance camera eventually and then following that in november of last year nyso published uh this time withdrawing that request that they have about 1900 megawatts of
Generation now and they no longer need any proposals because this will uh cover the base other than boldline and dash camera we have astoria unit 20 in zone j that’s also going to help and we have some wind and coal units in zones a and c that will definitely help so overall
That looks uh bearish in terms of generation uh so uh dance camera uh they published um uh but when they requested myself to uh uh that they’re going to enter the splice back this summer they said they would be ready by to that end of 2014.
Uh we have seen it uh in jazz games power rt that on may 12th dance camera actually ramped up in real time it looks like they went up to uh about 200 megawatts looks like this was a real time only drive because real-time prices in zonji was about 35 dollars cheaper than they
Had so this kind of gives us gives us an idea of how big of a driver dance camera can be and ball line also now uh this is uh usually what we see in the past summers this is a you know new york map and we see
Uh zones g through k become expansive and the rest of the state is uh fairly cheap and that’s because power is flowing from north to east and that’s driving a lot of congestion there and the main reason for that is uh we have those if this is just a transmission map of
Zone g just zoomed in there you see the two red lines there are 345 kv lines on the left there’s leads to uh hurley avenue and on the right is athens the pleasant valley so basically if those lines are carrying a lot of power they either hit their thermal limits or
Uh they they’re just a reliability issue that you know uh new york city is so dependent of northern generation so naiso binds one of those uh uh lines and there’s the that’s how we get that congestion and when this happens as you clearly see in the map
Uh the southern new york receives upside and north receives downside and the reason i’m uh showing this is because ball line and dance camera are in the southern part of that of that uh line so basically whenever that congestion happens the impact is going to be less because now
Uh ball line and dance camera can ramp up so that congestion pattern is going to uh not going to be as strong um following uh the return of bow line and dance camera now i just want to speak to the primary impacts of ball line and that camera a couple of them
First of all as i mentioned congestion uh now the main driver of this congestion that you see in the map was because there’s not enough generations on j but now there is so we will see less of this congestion and also this congestion is the same as it happens in real time
Whenever there’s a thunderstorm alert so basically same same theory applies here now that we have a healthy supply stock in in new york city area uh thunderstorm alerts are not going to be as significant in terms of dot spreads uh because real time is not going to be as expensive
Because now there’s a lot more generation in there that can uh drive prices down and the the tricky one that a lot of people ask about me is uh what what do i think is going to do to gj spread i mean technically it looks like you
Know there’s a lot of generation now in zone g it’s going to go to zone j uh is that going to drive any congestion over the lines especially hitting thermal limits between zone g and j uh in my opinion it’s not really going to impact gj spread
Too much i think it will either remain flat or or increase a little bit but i don’t think the impact will be significant because those generators as i said are very close to zone j so i just think that they’re both going to go up or down together and the fourth one is
How is this going to impact central east congestion now you can see a little map in the in the right bottom so basically that’s what happens when centrally splined instead of flows going directly from north to uh north to south like in the left uh sometimes slopes can be very strong from
West to east and that will drive central east congestion and the the logic behind it is very similar there’s just not enough generation in the east or there’s a lot of uh exports going into new england and that would drive central east congestion and that central lease congestion sends downside or curtail
Price signal to zone a so that will drive uh that has been driving white aeg spreads but now that we have uh again that healthy splice stack is on g uh i think we’re going to see less of centralized congestion so that means zone a is not going to
Receive as much of a curtail signal as they have been so that is the the return or addition of these generators are the bullish price driver for zone a now the the fifth one is new england flows uh whenever there’s essentially congestion that kind of
Goes hand in hand with it if it is very strong centralized congestion nissa tries to cut flows uh from nissa to new england because now all of those flows are needed in iso but now that we have that healthy generation uh eastern new york does not have to worry too much about
Sending flows to new england and congesting up new york so that uh that that was our analysis for generation i’m going to now uh speak about the line outages and transmission d-rates that i see uh uh that knife has scheduled now first of all this is not the full list of all the
Outages or transmission due rates that has been scheduled in my experience niso does not publish a very detailed outage list this far ahead of time but they will publish i’m sure as we get a closer uh you know maybe a couple days ahead or a week ahead
We will see when the important outages or ideas show up but the reason that i picked those uh and the reason i want to share these with you is not because they are very significant especially if you look at the date in and date out
Uh some of them are only uh like one day long but they i those are the ones that i think are going to show up this summer more often and it’s good to have an idea of what it can do now for example the top one is basically saying that
Hq imports uh that limit is now decreasing from 1500 megawatts to 1100 megawatts we are very dependent on hq imports uh in the summer uh because hq uh hydroquebec you know canada does not get impacted very much by the summer heat so they can uh maintain their cheap power prices and they can
A very uh very stable market they can send into new york so if we see hq imports go down that will definitely increase prices uh at marsy as reference price so entire state is going to go up and zone 8 definitely is going to have some congestion
Because of that and the one underneath uh there’s a dysentery east d-rate about 300 megawatts um now if we if we see that more often especially when we have uh let’s assume that we have a strong stance release congestion if we have a this injuries interface d-rate on top of it we will
See downside in zone a because you know only so many flaws now can go over dice injuries so that will be a downside driver for zone 8 that we will always keep an eye out for and then uh there are back to niagara line outages that drive imo imports down
Again that’s very important because imo imports play a big role in uh driving or avoiding zone a congestion there’s a sweet spot if imo is flowing from ontario i mean from ontario canada into buffalo area if they’re very strong or very weak we seize on a congestion so now that the
Limit is 1100 megawatts i think even though we are going to have less imports from canada that will actually be a bearish driver for zone a if there is on a congestion i would think that it’s going to go down and then the last one is central east tier rate
Uh once again i mean the dates are not very long but i’m sure that we will see more of this uh centralized can be very important if there are less flows that can go over central east that can create aeg spreads and that can really impact exports going into uh new england
And then as far as the line averages uh basically if uh there are any line out just in zone a near niagara or back or packard gardenville that can really increase on a congestion and even if it doesn’t bind it will bring price volatility and the reason i have the top one in
There from dance camera to chadwick it looks like i actually don’t have experience with that line but i just wanted to uh share with you that uh sometimes there are some line altitudes that go out that are very close to some generation uh that can limit that generation to
Ramp up at all or run it not at capacity so this line outage may impact dance camera unit to not run at full capacity uh we will just see how this happens but i just want to share my thoughts with you we do we have the same scenario with
Ball line if there’s a line out which in your ball line unit normally ball line uh can not run so it may be a good idea to keep an eye out on this one especially if they have cameras running at it during that time now i would like to talk about zone a
Congestion uh people who are really interested in zone a uh they you know trade zone they they have a very good understanding of this but i just wanted to take a step back and uh point out the usual suspects uh usual main drivers of zoning congestion basically and then uh explain
A couple uh theories that i have that may be driving zone a congestion on top of that so basically uh if there are line athletes or transformer out which is near niagara that will drive zone a congestion uh if you have low pgm or high imo imports
That will drive zone a congestion uh strong load like everywhere else but overall if we have weak power on 230 kv and i mean weak supply uh and we have strong 345 kv supply uh that can also uh contribute to zone a congestion but uh the reason i have zone a
Congestion slide for you is because i just want to share something else not the usuals uh it looks like a huntley can step in and out of the market and they can really drive zone a congestion and renee prices eventually in a pretty uh significant way
If you look at dysenger east flows that will really increase or decrease and i will dive into it in the next slide but i just want to point out that huntley can come in and out and uh if there is a zone a congestion that’s really confusing uh you know hard to explain
Uh this would be uh one thing that i will look at so basically uh in put in a very uh a simple way this is again a zone a map basically a western side of uh nyso we have dysentery’s interface right there in red and that basically uh measures uh the sum of
Flows that are coming from west to east and on the west we have basically the the biggest thing uh that makes up the dysentery east interface is imo imports uh zonal generation like dunkirk and huntley somerset and then we also have homer cities of solar road from
Coming from pjm a partial uh pgm ac flows and obviously there is load that has to be served if everything remains the same day over day dice east flows would be the same or if imf laws were the only thing that increased then dice injuries closed i would expect
Them to increase a little bit but sometimes what we see is like a may 31st and 30th data you have in the bottom uh dysentery east flows uh day over day went from 16 78 megawatts to 974 megawatts that’s a very big decrease uh over the interface and i wanted to
Look at what would be driving that is it the imo imports or is it the demand going down but it looks like uh everything here is public information except for zonal generation we don’t know what they’re doing uh looks like uh zone a load was the same
Imo imports did go down about 200 megawatts but not big enough decrease and pj mean force actually went up so in this case i would expect dysentery’s flows to either remain the same or maybe even go up a little bit but as you can see it went down 700
Megawatts and it only leaves me with some uh clue that you know generation is on a has uh exited the splice stack well why is this important because if you look at it zone a marginal cost of congestion was only three dollars on may 30th
But it was 33 on may 31st and that was a certainly a very very big driver and uh we actually uh saw that in today’s ahead market zone has created a pretty strong uh and it was a very similar situation nice injuries flows uh in today’s day had cleared
Was uh there was a big decrease compared to yesterday and i would expect that the same thing is happening here so historical data shows that it normally takes only a couple of days for those black injuries flows to recover so it will not be a long-term congestion in my opinion
And also i have looked back four or five years and this was the only time may 31st that this has happened uh in the summertime it normally happens in the winter so i don’t think this actually is a big risk for this summer to happen and obviously today it happened but i don’t
Think this is a big risk for the summertime uh by you know next week i think uh that’s injurious flows are going to recover um and uh by the way i i can imagine people would like to know how tomorrow they had market cleared uh there were still sums on a congestion
Tomorrow but uh doing my analysis that i do here uh it looks like passenger east flows actually increased so it’s on its way back uh it’s just uh so there’s congestion it’s not back uh just enough yet and now uh we like to talk about high flows so this
Is historical data i could have uh probably mentioned this earlier on in my uh presentation but this is also how we figure out or how we try to have a clue about this summer’s uh thai flows so hydroquebec and ontario flows imo flows are up top
You can see uh last two years they didn’t actually change that much in the summer they only have data i mean we i’m only showing data here june july and august of last year’s uh you can see i mean it’s very stable over there uh it’s not
A very summer driven market and the winters you know canada gets really cold and that’s when they have problems but in the summer we don’t really have to worry about that so i think this summer a similar situation i would expect strong and steady flows from both
Uh hq and imo but once you come down to new england and pj m flows uh it gets a little bit trickier market economics and uh generator incentive uh play a bigger role demand changes a lot more and you know a generation has to react to it
Uh so it’s more dynamic over there and uh taking a look at new england uh for example in 2013 uh we did not stand on that much we actually imported uh it looks like in august but then last year we did export uh quite a few
And uh looks like it’s all uh market economics uh based on you know 2013 was a pretty pretty uh hot year uh for uh for an iso uh so there was a lot of centralized congestion and not a lot of flows going in to new england but last summer we did
Not have that problem and the same story goes for pgm we were called you were able to i mean we were hot in the summer in 2013 able to import from pjm uh but in 2014 that was not the case uh but in pjm this summer i would expect flo’s imports
To come in not as much as they did in 2013 uh but pretty close to that but definitely uh more than uh 2014 and also uh i would like to mention for the new england exports because now that we have healthier uh generation stacks dance camera and ball line we will probably export
More to new england now so i wanted to put all the five of the biggest price driving factors in one slide for you so it looks like lord is going to be bullish as patrick has mentioned uh generation is very bearish but only in zones g
J and k it may end up being bullish for zone a because central east congestion as we have mentioned may not uh may not bind so zona may not receive downsides so year over year it can go up uh transmission line wise i did uh mention uh how many lines and
Us you are expecting uh how many are scheduled but nothing is there big enough for me to say year over year it will make a difference but as i also mentioned we will keep an eye out on it they publish that data pretty day in and day out now gas market wise
I have a slightly bullish there uh i don’t think it’s going to be a big driver given we have a lot bigger drivers this summer in terms of uh generation and load uh but uh there’s a sony point compressor station maintenance that’s going to impact agt uh gas capacity it’s going down slightly
But i don’t think it will impact iso that much even uh iso new england as uh i don’t think will be impacted that much agt is their main gas but it has to be new england’s problem first before it can be nice always not expecting a major driver but still slightly bullish
And the imports wise it could be bullish for eastern side of new york because now we’re sending more to new england now that we can afford it we have enough generation but i don’t think we’ll see any any of that impact zone a that much so that actually concludes it uh if you
Have any questions i will remain online uh i will read your questions i will answer to them and so everybody can hear it but if you don’t have any questions and are leaving i appreciate the time that you have taken for this and i have a good day but i
Will be online for a couple more minutes okay uh having a few questions i will take uh one at a time so be i mean i will answer at a time uh so one of the question was uh about that dysentery’s analysis how do you know the pgm imports
Are only going to the west well first of all let me try to open that real quick okay so i i have the slide up um hopefully i’m just waiting for it to load okay so basically the question is uh you see homer city to soul road coming uh to the left of
Passenger east and you know you’re adding that to your calculations and how do you know that pj mac is not falling all the way to the right of it well uh my answer to that is actually in this analysis even though i am showing homer city soul road coming into the western
Uh side of passenger east uh it looks like uh there’s like 461 megawatts increase i have not even included that in my analysis so basically i am not saying that uh 461 megawatts were coming in extra to the west and that should have increased passenger east
I’m saying even if all of that went to the east uh that i would still expect in this example at least uh for the last injuries to increase and uh by the way homeless soldiers uh always carry a lot of power so i would think
It’s a safe bet that if it increased by about 500 megawatts i mean the pj mac i think it’s a safe bet that some of it if this uh went to homelessness solar there’s a question if uh overall i’m bearish for the summer um i would say yes uh
Except for zone a um as i mentioned can drive zone a up a little bit but the addition of those generation i think is going to outweigh the uh increase in demand so i would agree that i am overall bearish in zone gjnk in terms of gas even though it does show
That i’m slightly bullish i i have mentioned that i only have that because of the agt capacity uh decrease but and it’s not going to a big driver so definitely generation editions is the biggest driver for me to say that i’m bearish this summer our question is what are uh normal or
I guess average licensure east flows they do change uh a lot um so i mean yeah they change a lot so i wouldn’t be able to answer to that question but the thing is if everything is uh flat everyday i mean that’s what i was trying to show with this slide
If everything is flat every day and only the dashing east is going down uh quite a few megawatts then that could be a uh you know that could give you a clue that hunty may have stepped out but if dice injuries for example decreased every day by 700 megawatts but then
Imo imports also decreased by a lot and pj most decreased a lot and load went down a lot then that’s not a red flag per se that’s uh just uh when everything else is flat and that injuries decreases so it doesn’t really matter uh at what level it is decreasing from but it
Uh what matters is how it is decreasing and it needs to be that zonal generation is the driver of that decrease another question is uh so basically now that we have a strong generation in new york city area wouldn’t that be bearish zone a because now zone a is going to
Uh i guess uh the question is generate less well i think in my opinion even though dance camera and ball line are very very helpful additions in order to meet that load packet new york city and long island i think it is still uh very important to have uh zone a
Generation so i think flows from zone are still going to come in and i think we are still going to see some centralized congestion but uh overall i don’t think it will be the case that zone a generation just does not need to run anymore uh because
Now zonji uh have has enough generation i think it’s just going to be a decrease of flows and that will uh cause uh weaker centralized congestion so that could that could bring prices up in zone a uh that will conclude all the answers that i have if you have asked a question
And haven’t heard uh i will get back to you personally thank you for joining us today and please take the time to do the survey as i mentioned we really appreciate your bye-bye you