3 min read

Falling Capacity Creates a Good Buy for NYC

By 5 on April 29, 2021

Wholesale electricity prices in New York City have been rising for the last several months. Figure 1 shows how forward prices for calendar years 2022 through 2025 have been trading over the last five years. Note that wholesale prices were at a low at the start of the pandemic in March 2020. Despite a correction in the late fall when the market dropped, the overall trend has been bullish for nearly a year. Additionally, this is a classic example of a contango market, where prices get more expensive with each subsequent time period in the forwards. Figure 1 also shows that the least expensive calendar year is 2022 and that 2025 is the most expensive.

One interesting observation is that the outer years (2024 and 2025) are rising at a similar and faster rate compared to calendar years 2022 and 2023 which seem to have consolidated. We reported on this consolidation in February and suggested that this created good near-term buying opportunities and now 2022 and 2023 are both trading at a $7/MWh (0.7¢/kWh) discount to 2024 and 2025. While the overall market trend in NYC has been bullish, 2022 and 2023 are within $6/MWh (0.6 ¢/kWh) of the 5-year low, which was set immediately before the pandemic. This, coupled with falling capacity prices in NYC, has produced good purchasing opportunities for NYC electricity buyers.

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Topics: Markets NYISO
3 min read

New Efficiency Standards for New York

By 5 on March 30, 2021

On Tuesday, March 16, 2021, the New York State Energy Research and Development Authority (NYSERDA) released a status report on “Regulations Establishing Energy Efficiency Standards.” In addition to reporting on the status of energy efficiency regulations, this report includes recommended amendments to New York law that would add new categories to the state’s energy efficiency performance standards. These recommendations have been crafted into a “Program Bill” – legislation written by the Governor’s administration – which is being shopped around in the State Legislature for a sponsor.

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Topics: Markets NYISO Resiliency
4 min read

Near-Term Opportunities in '22 & '23

By 5 on February 26, 2021

Electricity prices in NYC are starting to show signs of consolidation. Earlier this winter, mild temperatures in the months of November and December placed downward pressure on both near-term gas and power futures prices. This can be seen in Figure 1, which shows wholesale forward electricity prices in NYC for calendar years 2022 through 2025. This market correction, which lasted through the end of December, created good purchasing opportunities for many in NYC. Since the beginning of the year, prices have rallied, increasing between 2.5% and 5.1% across all calendar years except 2023. Note the flat to downward slope of electricity prices for calendar year 2023 (black line). While near-term prices in 2022 have rallied, falling prices in 2023 and have produced a degree of consolidation and created good purchasing opportunities.

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Topics: Markets NYISO
2 min read

Cuomo's State of the State for Energy

By 5 on January 27, 2021

In his 2021 State of the State address on January 11th, Governor Andrew Cuomo declared the transition from fossil fuels to renewable energy as an opportunity for New York to stimulate the economy in the post-COVID world. Cuomo highlighted four components that need to be addressed simultaneously to seize the moment:

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Topics: Markets NYISO
3 min read

Lower Demand and Lower Prices for New York’s Energy Buyers

By 5 on December 22, 2020

Every four years, the New York Independent System Operator (NYISO) commissions a study to evaluate and forecast the balance of electricity supply and demand in the state. This study considers the economy, demographics, implementation of energy efficiency measures and many other factors used to assess the amount of electricity needed across the state. This latest study examined the period from May 2021 to April 2025, in an attempt to determine the amount of electricity supply that is needed to keep up with expected changes in demand. Notably, the economic effects and the demand destruction in New York State and New York City caused by the COVID-19 pandemic are built in to this study. This is a critical point because there was a 13% reduction in electricity consumption in NYC during the first wave of this pandemic in March-April 2020[1]. This change in electricity demand, driven mainly by the pandemic is shown below in Figure 1. This recently released study from the NYISO predicts that there will be less demand for electricity supply in the state of New York, which resets and lowers the demand curve that is used to establish the price for capacity. This is important for electricity buyers because it will likely lower the future cost of capacity.

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Topics: Markets NYISO
2 min read

Election Year Implications For NY Energy Policies

By 5 on November 24, 2020

In New York, the 2020 election was a big deal. It’s the first time since the 1930s that Democrats have successfully held a majority in the State Senate. While the Presidential race in New York was called for President-Elect Joe Biden almost immediately after polls closed, which gave the illusion of completion, the state is still counting ballots today. This year, as is true every other year, every member of the State Legislature was up for reelection. While incumbents certainly carry an advantage into any election cycle, New York has seen a political awakening following the 2016 election of President Donald Trump. This movement carried a new, Democratic majority into power in the State Senate in 2018 and lead to many moderate Democrats being swept out in favor of more liberal candidates.

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Topics: Markets NYISO Resiliency
6 min read

Introduction to Green Hydrogen

By Sean Ewart on November 24, 2020

It’s got Jim Cramer saying it’s “sexy” and natural gas companies betting their futures on it. What are we talking about? Green hydrogen (GH2). And no, GH2 isn’t just hydrogen by another name, it’s hydrogen produced by renewable energy and there are several important reasons why its trending today.  

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Topics: NYISO Sustainability Education Renewables Resiliency
3 min read

The Witching Hour For Local Law 33/95 is Here

By 5 on October 29, 2020

October 31st is the deadline for building owners to post their Energy Efficiency Rating Label. This is required for all buildings over 25,000 square feet that are listed on the 2020 Covered Buildings List for benchmarking compliance. In December 2017, the New York City Council passed Local Law 33, which was later amended by Local Law 95 in 2019, requiring building owners to post this label in a conspicuous location near each public entrance. The intent of this law is to provide transparency into a building’s energy usage and efficiency.

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Topics: Markets NYISO
3 min read

A Good Time To Buy In NY

By 5 on September 24, 2020

Lately, the bulls have been running in NYC’s electricity market but there has also been a consolidation in forward prices. Figure 1 shows calendar year strips for wholesale electricity in New York City for 2021 through 2024. Wholesale prices in all calendar years hit their all-time lows in late March/early April, shown in the red oval, and have rallied over the last 6 months. Also note that over the last two years, near-term prices have always been less expensive that longer-term prices. This can be seen in the figure below as calendars 2021 and 2022 (blue and black lines) have consistently been less than 2023 and 2024 (green and yellow lines). This is referred to as a contango market, where prices get more expensive into the future.

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Topics: Markets NYISO
1 min read

Fall 2020 Energy Market Webinar

By 5 on September 23, 2020

Join us for the energy market insights you need to know for your business. 5's Lead Energy Analyst, Eric Bratcher, provides a detailed look into each energy market during three regional webinars.

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Topics: Markets PJM NYISO ERCOT Education