Cut off one head and two grow back. That is what short-term power price forecasting looks like on the modern grid.
For most of the industry’s history, load was the variable you forecast and generation was the variable you dispatched. Dial the turbines up or down to match the demand, and job done. Ok, it’s a bit harder than that… but you get the idea. Our weekly ISO lookback showed load forecasts were solid across PJM, MISO, and NYISO and beat ISO metrics in ERCOT, CAISO, and SPP. Last week load was defeated, and prices still surprised. Vanquish one challenge, two new ones emerge.
It’s shoulder season so those surprises are revealing. Spring generation in the Lower 48 runs roughly 20% below summer peak. Temperatures are mild, cooling load is minimal, and the grid should be the furthest thing from strained. It is also exactly when generators schedule maintenance, because the system has slack to absorb it. And yet, strip load out as the hard variable, and the forecasting problem does not get easier.
The modern supply curve now moves on its own clock, and the moves are large. ERCOT wind swung from roughly 12 GW at the weekly trough to nearly 28 GW at peak, often in a few hours, sometimes early, and sometimes late. SPP looked quiet all week and produced a single Friday spike when wind shape collided with a binding constraint. This week, NYISO wind is expected to drop nearly 90% from early week to Thursday or Friday. Plenty of capacity to surprise.
Then there is the head that does the most damage. Generation has not just changed type, it has changed location. Wind sits in West Texas and the Plains, solar in the desert Southwest, hydro upstream of population. The wires were built for a fleet that sat closer to load. Supply that looks abundant on a system map is frequently stranded on the way to where it is needed.
Place this against a backdrop where load is rising at the same time: data centers, electrification, and industrial reshoring are pushing the baseline higher even as the supply stack gets lumpier. When weather or congestion pulls renewables off the curve, the market climbs up the merit order, and the top of the stack is steep. A few MW of missed supply or unexpected demand can clear hundreds of dollars per MWh above where the average day settles.
This is today’s market, one that pays for reading between the lines a model cannot absorb. I am glad we have a team doing that work every day.
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