CAISO 5.1 Forecast Preview: The Calm Before the Storm

May 16, 2024

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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. 

About Ascend Analytics

Ascend Analytics, an innovative leader at the forefront of the energy transition, offers advanced software and consulting services that capture the evolving and real-time dynamics of energy markets. The company provides its customers with optimized and comprehensive decision analysis that covers everything from long-term planning to real-time operations in the electric power supply industry.

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