Genscape: New York coal retirements + transmission issues = ‘anomalies’

Genscape said Sept. 5 that the recent retirement of 500 MW of coal-fired capacity in western New York state, plus some transmission issues in the region, could create some power market price “anomalies” this fall.

Genscape’s newly-released 2013 NYISO Fall Outlook reports long-term transmission outages will compound recent coal-fired generation retirements to drive “bullish” price anomalies this fall in the New York ISO region.

“The retirement of 500 MW of coal-fired generation in western New York has had a strong bullish impact on prices in the west of the state, helping to drive multiple record high daily clears in West Zone,” the company said. Upside congestion that is resulting from the retirements is expected to persist through the fall, according to Genscape analysts. 

Genscape reports that beginning in October, line work on a large, high voltage transmission line between New Jersey and New York, will shift dynamics between the PJM Interconnection and the NYISO, likely driving exports to PJM. “Barring a major weather event, generator and transmission availability will be the main drivers for fall prices, not demand,” said Matt Oatway, Senior Analyst on the NYISO desk.

In recapping what happened this past summer, the study finds:

  • The new Hudson Transmission Project (HTP) line, a 660-MW controlled line from North Jersey into New York City has not seen favorable spreads to drive strong flows into New York and the lack of opportunity has resulted in a low capacity factor.
  • Zones A, G and J all finished the summer up year-over-year despite weak demand in June and August due to generation retirements and long term transmission outages. In Zone A, the retirement of coal units drove record high daily clears on multiple days.
  • Contributing to the strong summer clears was strong load in July. NYISO reached an all-time peak demand of 33,956 MW on July 19 versus a previous record of 33,939 MW on Aug. 2, 2006.
  • Zone K cleared down year-over-year, the only major zone to do so, as the Neptune cable returned to full capacity after a long term outage de-rated it to half of capacity.

Genscape is a global provider of energy information for commodity and financial markets.

There have been several coal-fired plants that have been retired, have been partially retired or are about to be retired in New York, which is mapping out a clean energy, non-coal future under Gov. Andrew Cuomo. Coal plants on the hit list have included: Cayuga and Dunkirk (which are subject to coal-to-gas conversion proposals by their owners); Danskammer (an aging plant dealt a final death blow last year due to damage from Superstorm Sandy); and former AES Eastern Energy LP plants Hickling, Jennison, Westover and Greenidge.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.