What is a Nodal market?
In a nodal market, electricity is traded and priced at specific locations, known as nodes, on the grid instead of clearing on a regional level. Prices can vary at different nodes, reflecting factors like demand, transmission constraints, and generation costs, allowing for more precise and efficient management of the electricity market. This creates the potential for lower overall power market costs, however, it can also lead to large differences in settlements paid to generators of different technologies and locations, especially if there are chronic or extreme transmission concerns.
Our Nodal Add-On service will allow you to understand underlying nodal drivers in evolving markets.
ERCOT Nodal Market
The ERCOT power market is an energy-only nodal power market that implements generator nodal pricing. With generator nodal pricing, prices, and dispatch are determined at the nodal level for each generator but settled on a zonal level for load. In the ERCOT power market, nodal prices can see an additional scarcity premium to encourage greater electricity production during times when it’s needed most.
Easier interconnection processes and volatile scarcity pricing make ERCOT a great option for developers looking for the right spot.
CAISO Nodal Market
The CAISO power market is a nodal power market that implements full nodal pricing, meaning prices and dispatch are determined and settled at the nodal level for both generators and load. In the CAISO power market, bids have a soft and hard cap at $1,000 and $2,000/MWh, respectively—as they are eligible to receive resource adequacy capacity payments in place of scarcity premiums—however, congestion and losses can result in LMP at a specific node far exceeding these caps to the marginal cost of energy.
Persistent congestion patterns throughout the CAISO grid as well as ambitious state procurement targets help to make CAISO a very competitive market with sizeable upside for developers who seek interconnection in the best locations.
Highlighting key regional trends:
- Overview of the current landscape of congestion and nodal basis
- Explanation of the calculations and drivers behind LMP
- Details on our assumptions and modelling methodology
- Deep-dives on forecasted region-specific trends
How are users interacting with the Nodal Explorer?
Key use cases
Bankable node-to-hub basis forecast
Explore how the interconnection of new projects and commissioning of transmission infrastructure will affect nodal basis through to 2050.
See capacity buildout by transmission zone and quickly compare which projects currently in the connection queue are located at the substations with greatest upside.
Compare how local congestion will affect different technologies such as offshore wind.
View how all planned network upgrades currently affect basis throughout the forecast and see where new transmission lines could prove economic.
Download our sample report
Submit your interest today
Our team will be in touch soon to set up a walkthrough and answer any questions you may have.
Complete the form below to download a more comprehensive overview of our Nodal Explorer.