Crucial intelligence to understand the changing US power market dynamics

The US produces 4,000TWh+ of electricity annually, second only to China, and is embarking on tremendous change.

The Inflation Reduction Act, passed in August 2022, is the largest piece of legislation ever to combat climate change, including $400bn+ of spending over 10 years, with funding for solar, wind, storage and hydrogen technologies plus wider electrification of the economy, turbocharging the deployment of new supply and demand technologies.

Yet US power markets are fragmented in design and local policy, split between ‘regulated’, with vertically integrated utilities responsible for generation and delivery of electricity to consumers, and ‘deregulated’, where electricity is sold into competitive wholesale power markets.

Differing market rules are compounded by state level policies. Renewables Portfolio Standards are set by individual states and place targets for power sourced from renewable technologies. PJM, a deregulated market, covers 13 states and the District of Colombia.

All states except three have an RPS target, whilst five are participating in regional carbon pricing. These, and other policies, have implications for the pricing and flows of power across state lines, and in the turn the relative attractiveness of new investments.

As climate policies progress, common themes are emerging across markets, determining the rate of meaningful change:

  • Retiring thermal generation The backbone of the US’ power supply has been generation from aging coal and gas assets, and their retirement will create a need for new generation.
  • Interconnection queues Grid operators struggle with interconnection queues, causing multi-year delays for new plants to connect to the grid, impacting wind and solar projects.
  • Battery storage Its role in providing ancillary services, as well as dispatchability during peak hours, is making battery storage technology an attractive investment. Tax credits included in the IRA have made these projects more viable, and batteries are rapidly being deployed in markets with potential for scarcity pricing, such as ERCOT, and markets with attractive capacity payments for storage, such as CAISO.
  • Transmission upgrades The US transmission network also requires significant upgrades, with more required if ambitious renewables levels are to be met. All US deregulated markets have locational pricing; transmission line upgrades and outages will directly impact the returns of generation assets.

Subscription Services

Our subscriptions offer comprehensive market intelligence packages for energy market participants. All subscribers get company-wide access to our EOS platform.

Power & Renewables Market Subscription Service

Quarterly forecast reports
  • Policy, market and technology discussion and outlook
  • Annual capacity and generation mix to 2050
  • Around-the-clock and on/off-peak prices at annual and monthly granularity for main price hubs
  • Generation-weighted average (GWA) prices for wind and solar at annual and monthly granularity for main price hubs
  • Scenario analysis to explore uncertainty around Aurora’s Central forecast (e.g. Low, Blocked, Queue, Clean Ambition, Carbon Price, IRP, Persistent Scarcity, High etc.)
  • Historical market data and Scenario Explorer in EOS
Strategic insights
  • Quarterly deep dive workshops on key market topics, each accompanied by a 40-50 slide strategic insight report
  • The opportunity to network with senior representatives from utilities, developers investors, lenders and Government
  • Quantitative ad hoc policy note updates with detailed implications for your business
Interaction with our market experts
  • Ongoing access to expert analysts to address questions on the markets, forecasts, or reports
  • Regular interaction e.g. via bilateral meetings to discuss the analysis and any key points relevant to you

Flexible Energy, Battery Add-On (quarterly)

Our quarterly Flexible Energy Add-On comprises everything needed to inform a battery investment case:

  • Investment cases Eg regular updates to 70+ standard investment cases based on standard battery input parameters to save the need for bespoke work:
    • Market scenarios: Central, High, Low
    • Duration: 1, 2, 4, 6, and 8hr (dependent on market dynamics)
    • Entry years: 2023, 2026
  • Competitive analysis Historical monthly battery performance review for all operational assets, to analyze the competitive landscape
  • Strategic analysis Regular updates of key policy impacting storage, scenario analysis, and key risks/sensitivities
  • Detailed data Hourly day ahead and ancillary service prices, plus 15 min real time prices for each of the main price hubs
Subscription Service
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Custom Advisory Projects

Do you have a more custom question? Our experienced team of advisory experts tackle a wide range of projects.

  • Transaction and financing support
  • Power flow studies and site-specific asset valuations at the nodal level
  • Strategy development and decision support
  • Portfolio diversification and optimization
  • Policy and regulation scenario modelling for portfolio stress testing, investment strategy, and public engagement
  • Market sizing, market entry support and asset scans

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