Boston, Mass., May 6, 2002 — In the latest North American Power Market Watch, ESAI, using proprietary databases and bid analysis tools, offers analysis of the true load-offered capacity relationship in both PJM and NYCA.
“The amount of offered capacity is one of the key determinants of power prices,” says Jaya Bajpai, Power Analyst at ESAI.
ESAI notes that there are two schools of thought: one suggests that suppliers offer all available capacity and one that supply increases with load. Using historical bid data, ESAI investigated the relationship in both PJM and NYCA.
ESAI analyses show that each day in PJM, most generators and transmission-based suppliers submitted a single bid curve for the entire 24-hour period. This implies a significant amount of capacity offered is ‘Base Capacity’ and that load has to be remarkably high for extra capacity to be offered.
“A single bid curve also implies that many suppliers are not particularly sensitive to hour-by-hour load fluctuations,” says Bajpai. However, where PJM has a relatively fixed amount of these ‘base capacity’ available at all times, NYCA reveals a great deal of variation in offered capacity.
“In fact, there may be a link between forecast load and offered capacity”, says Bajpai.