CAISO 5.1 Forecast Preview: The Calm Before the Storm

2023 proved to be an anomalous year for electricity prices in CAISO, driven by an unlikely combination of mild summer weather, abundant hydro generation, low gas prices, and an absence of heat waves. A storm is coming, however. Aggressive decarbonization policy mandates, record demand for renewable energy, and rapidly increasing load growth signify a robust need for new capacity resources and will present serious challenges for system reliability.

In a recent webinar previewing the Ascend CAISO 5.1 Market Report, Dr. Gary Dorris, CEO at Ascend Analytics, joined Dr. Brent Nelson, Managing Director of Markets and Strategy, to discuss the underlying structural power market challenges that lie ahead in CAISO.  

Key Takeaways 

• Mild summer weather during 2023 masked a continued tightening of supply in CAISO, where structural forces such as increasing electrification and data center demand continue to drive load growth.
• Though supply chains have begun to normalize in some parts of CAISO, multiple challenges remain, including production capacity shortfalls, labor scarcity, and a backlogged interconnection queue. Projects with capacity deliverability status remain rare and valuable. 
• CAISO has an acute need for clean capacity, with load growing, policy mandates climbing and imports diminishing. An imbalance between supply and demand as compliance periods approach has sent Renewable Energy Credit (REC) and resource adequacy (RA) prices soaring, with no relief until projects can move through the interconnection queue.
• A divide between northern and southern California solar-weighted prices has become increasingly stark during daytime hours in 2024, illustrating the solar saturation in Southern California.  
• Leveraging analysis from Ascend Market Intelligence™, the webinar offers guidance for where, what, and when to add new capacity resources in CAISO. 

Access the full webinar now. 

Interested in Learning More?  

AscendMI™ (Ascend Market Intelligence) delivers proprietary power market forecasts that have been trusted in hundreds of projects and resource planning activities, supporting over $25 billion in project financing assessments. Contact us to learn more. 

Ascend Analytics is the leading provider of market intelligence and analytics solutions for the energy transition. The company’s offerings enable decision makers in power development and supply procurement to maximize the value of planning, operating, and managing risk for renewable, storage, and other assets. From real-time to 30-year horizons, their forecasts and insights are at the foundation of over $50 billion in project financing assessments. Ascend provides energy market stakeholders with the clarity and confidence to successfully navigate the rapidly shifting energy landscape.