Wholesale Electricity Market Price Forecasting
July 30-31, 2020 | Online :: Central Time
Over the past two-plus decades, wholesale electricity markets for generation and transmission (G&T) services have transformed the power landscape. These unbundled wholesale markets serve as the short- and long-term cost references for measuring and assessing the broader value and worth of these power resources in most regions across North America. Now, most electric utilities, distribution, generation and transmission entities are on the same page – and use projections of wholesale electricity prices as the cost benchmark for their assessment of:
- Resource investment decisions
- Renewable resource commitments
- Power purchase agreements
- Innovative retail tariff options and curtailable services
- Hedge strategies
- Mark-to-market measures of profitability based on observed wholesale prices
Carried out properly, electricity price projections draw on an analytical toolbox that includes an array of methods and data. These include fundamental methodology paradigms, with the main focus on simulation methods for regional markets that draw on the following baseline knowledge:
- The organization of wholesale markets and the definition of unbundled services
- The workings of markets and the determination of prices
- Discerning when and how to apply specific approach options, such as applied statistical analysis and long-term forward simulation of economic dispatch
- Analytical basis for facility additions, including renewables
- Recognition of congestion and losses, which determine locational price differences
- Incorporation of observed, settled prices for financial contracts traded on commodity exchanges
- Impact of macro events on wholesale prices (e.g., COVID-19 effects on electricity demand)
This course will provide market participants, utilities, retail electricity providers, power marketers and others involved in wholesale electricity markets with market forecasting tools that will 1) inform their business, 2) increase value for retail consumers, and 3) improve profitability. The discussion will cover the conceptual framework and methodological steps, along with example analyses for regions, that result in effective wholesale electricity market price forecasting. Particular attention will be given to the newly emerging issue related to increasing adoption of certain energy resources: technology selection of capacity additions (battery storage, single cycle CT technology) and capacity worth of renewable energy including solar and wind.
- Identify the pricing infrastructure of wholesale electricity markets
- Review how price projections are established
- Examine how to interpret observed forward prices
- Review simulation methods for estimating regional electricity demand
- Evaluate the methodology of deriving locational dimension of prices and what they really mean
- Assess how this knowledge of wholesale electricity market forecasting can inform your business
EUCI has been accredited as an Authorized Provider by the International Association for Continuing Education and Training (IACET). In obtaining this accreditation, EUCI has demonstrated that it complies with the ANSI/IACET Standard which is recognized internationally as a standard of good practice. As a result of their Authorized Provider status, EUCI is authorized to offer IACET CEUs for its programs that qualify under the ANSI/IACET Standard.
EUCI is authorized by IACET to offer 1.0 CEUs for this event.
Requirements For Successful Completion Of Program
Participants must login for the entirety of the course to be eligible for continuing education credit.
Case studies and PowerPoint presentations will be used in this program.
Thursday, July 30, 2020 – Central Time
8:45 – 9:00 am :: Login
9:00 – 9:15 am :: Overview and Introductions
9:15 am – 5:15 pm :: Course Timing
12:30 – 1:15 pm :: Lunch Break
Short breaks will be taken throughout the day
The Pricing Infrastructure of Wholesale Electricity Markets
- Wholesale markets
- Over-the-counter contracts
- Structured products and services
- Contract path market regimes
- Price discovery processes – direct contact, day-by-day surveys of traders
- Bid-based regional markets operated by RTOs
- Auction processes
- Market and non-market services
- Exchange-traded forward contracts
Establishing Price Projections
- Observed forward prices, reflecting the expectations of buyers and sellers
- Futures contracts for market hubs with sufficient transaction liquidity
- Simulation of electricity demand and supply over forward years
- For regions, based on estimates of marginal supply costs
- For sufficiently large power systems
Interpreting Observed Forward Prices
- Exchange-traded futures contracts
- Observing and applying contract prices
- Historical relationships, extended over future timeframes
- Pros and cons
Reviewing Simulation Methods for Estimating Regional Electricity Demand
- Projections of electricity demand based on underlying factors
- Measures of economic activity across regions
- Real electricity prices
- Constructing hourly loads for the region
- Methodology…the starting point
- Projections of electricity supply
- Regional generation portfolio
- Projections of fuel costs
- Conducting economic dispatch under conditions of uncertainty
- Estimation of prices – integrating regional demands with supply functions
- Frequency of price shapes
- Selection of simulation years
5:15 pm :: Course Adjourns for Day
Friday, July 31, 2020 – Central Time
8:45 – 9:00 am :: Login
9:00 am – 12:15 pm :: Course Timing
Short breaks will be taken during the morning
Determining Locational Dimension of Prices
- Analytical basis for locational differences in prices – a tutorial
- Accounting for regional price impacts
- Deterministic transmission network simulation models
- Statistical analytics and model procedures
How This Knowledge of Wholesale Electricity Market Forecasting Can Inform Your Business
- Make transparent the conceptual framework underlying the workings of wholesale markets and the determination of prices
- Establish the foundation to measure the value of competing supply resource options and guide capital investment decisions
- Lay the groundwork for improved market position and increased value for electricity market participants and consumers
12:15 pm :: Course Adjournment
Robert Camfield, Senior Regulatory Consultant, Christensen Associates
Robert Camfield is Senior Regulatory Consultant at Christensen Associates. He has extensive experience in the energy industry and the economics of regulation, including resource decisions, regulatory governance and incentive plans, market restructuring, cost allocation, energy contracts, cost of capital, and performance benchmarking. Mr. Camfield has managed numerous projects involving wholesale and retail markets, including market restructuring in Central Europe. He served as the program director for EEI’s Transmission and Wholesale Markets summer program from 1999 – 2008, and is credited with innovations related to web-based energy services, cost analysis, and two-part tariffs for transmission. Prior to joining Christensen Associates, he served as system economist for Southern Company and chief economist for New Hampshire Public Utilities Commission.
Dave Armstrong, Senior Economist, Christensen Associates
Dave Armstrong is a Senior Economist at Christensen Associates. He specializes in supporting electricity suppliers in quantitative analyses related to designing products for competitive markets. His projects include retail product design and evaluation, wholesale price forecasting, and customer response modeling. Mr. Armstrong plays an essential role in the development and testing of retail product design and pricing software. He is also an expert software instructor, and leads workshops, training sessions, and pricing seminars.
We will be using Microsoft Teams to facilitate your participation in the upcoming event. You do not need to have an existing Teams account in order to participate in the broadcast – the course will play in your browser and you will have the option of using a microphone to speak with the room and ask questions, or type any questions in via the chat window and our on-site representative will relay your question to the instructor.
- You will receive a meeting invitation will include a link to join the meeting.
- Separate meeting invitations will be sent for the morning and afternoon sessions of the course.
- You will need to join the appropriate meeting at the appropriate time.
- If you are using a microphone, please ensure that it is muted until such time as you need to ask a question.
- The remote meeting connection will be open approximately 30 minutes before the start of the course. We encourage you to connect as early as possible in case you experience any unforeseen problems.
Please Note: This event is being conducted entirely online. All attendees will connect and attend from their computer, one connection per purchase. For details please see our FAQ
If you are unable to attend at the scheduled date and time, we make recordings available to all registrants for three business days after the event