U.S. wholesale power prices will rise as much as threefold during this summer’s peak demand period due to high gas prices and a switch away from coal-fired generation, the Energy Information Administration (EIA) warned in a note on June 16.
Extreme temperatures are becoming more likely and could lead to power shortages in the central and western U.S. as residents and businesses ramp up air-conditioning units, federal and state officials said. The Midcontinent Independent System Operator (MISO) is forecast to have 114.9 GW of available generation capacity, compared with a peak demand of 118.2 GW under a normal scenario and 125.2 GW under extreme hot temperatures, data from the federal grid regulator show.
Wind-farm operators that have completed preventative maintenance ahead of the summer will benefit most from volatile wholesale prices. Operators can then profit from selling into the wholesale market at high prices or avoid outages that force them to buy.
Power utility AEP has conducted preventative maintenance “to help ensure energy will be available to our customers and in the market,” a spokesperson at AEP told Reuters Events. AEP operates more than 7 GW of wind and solar and almost of the capacity is sold through long-term contracts.
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