March 12 (Bloomberg) -- Spot wholesale electricity turned negative in California as solar and wind generation topped forecasts, a signal to suppliers to reduce flow.
Wind turbines produced 1,537 megawatts during the hour ended at 1 p.m. local time, more than double the forecast, according to data from the California Independent System Operator Inc., which manages the state grid. Solar output topped projections by 10 percent with 2,492 megawatts during the period.
Spot power at Northern California’s NP15 hub, which includes deliveries to San Francisco, averaged minus $70.36 during the hour ended at 1 p.m., widening from minus $39.12 the previous hour and an average of $30.45 at the same time yesterday, grid data compiled by Bloomberg showed.
Average on-peak prices at the hub were down 58 percent at $16.26, headed for the lowest daily average since June 12, 2012.
“Renewables have been wreaking havoc on prices for the past two weeks,” said Chris DaCosta, a Boston-based analyst for Genscape Inc., which tracks real-time power data. “The combination of greater-than-expected generation from both wind and solar resources coupled with seasonably weak demand in March has consistently led to low real-time prices across the middle portion of the day when solar is strongest.”
Electricity consumption on the state grid was 26,567 megawatts at 1:20 p.m., 1.9 percent above the day-ahead outlook of 26,067 megawatts for the hour, according to the California ISO’s website.
The high temperature in San Francisco today will be 69 degrees Fahrenheit (21 Celsius), 7 above normal, while Los Angeles will be 13 higher than average at 83 degrees, according to AccuWeather Inc. in State College, Pennsylvania.
Southern California prices rebounded with the afternoon heat after posting negative averages for the hours from 10 a.m. to noon.
The SP15 hub, serving Los Angeles and San Diego, averaged $11.13 in the hour ended at 1 p.m. versus minus $10.53 the previous hour. Prices were down 64 percent from the same time yesterday. Average on-peak prices are down 53 percent at $18.95, the least since Dec. 24, 2012.
Spot prices can turn negative when there is excess supply on the grid, serving as sign to generators to cut back production.
A late winter storm boosted Midwest wholesale electricity demand and prices while the East Coast grids reversed earlier losses as cooler air and rain moved into the region.
New York City spot power advanced $9.46, or 19 percent, to $60 a megawatt-hour during the hour ended at 4 p.m. Eastern time. Prices on PJM Interconnection LLC’s benchmark Western hub, which includes deliveries to Washington, gained $6.98, or 19 percent, to $43.36.
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