Pike reports on short-term North American power markets

Boulder, Colo. October 20, 2011. Power markets are now in place in ten locations across North America, covering more than 30 states and provinces and 120 million people. When power markets were first implemented, participation was limited to utilities and their trading arms. Since then, financial institutions have entered the markets, followed by end use customers and demand response aggregators, according to Pike.

The power markets have been marked with periods of extreme price volatility and periods of fundamental pricing. Since the economic downturn of 2008, financial institutions have reduced their participation in the markets, to be replaced by end use customers and demand response aggregators. With recent economic concerns and continued development of new generation, demand is not expected to exceed new supply. This condition leads to lower volatility and fundamental pricing of power in the market. 

The power markets are forecast to remain stable with respect to both price and volatility for the next five years, despite the introduction of more renewable energy onto the grid.

Pike Research anticipates that market participation will grow significantly, with trading services forecast to grow from $283 million in 2011 to as much as $333 million in 2016 under an economic recovery scenario.
The complete report, “Short Term Power Markets in North America: market Drivers, Forecasts, and Opportunities in Short-Term Energy Trading and Ancillary Services” is available from Pike Research.

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