With strong natural gas production continuing to outperform demand for the fuel, wholesale energy prices have plummeted this year compared to last year. Wholesale electric and natural gas prices are, in fact, hovering around the lows experienced in 2012. During our recent webinar, “Energy Outlook, Q4 Market Intelligence Update”, we examined the major market drivers and shared our outlook for 2016, both for the wholesale energy market and regulated retail rate cases. Additionally, with the falling costs of Distributed Energy Resource (DER) technologies, we outlined five considerations when looking to implement them into an energy procurement game plan. Here are a few of the key takeaways from the presentation:
- Natural gas production hit a new record high in August.
Even with extremely low prices, production hasn’t slowed considerably. In fact, additional gains are expected in 2016. Much of that has to do with increased drilling efficiency over the years and the ability to lower the cost to produce.
- El Niño impacting winter weather, tempering heating demand.
Many analysts expect this winter to rival that of 1997/1998, which was the strongest El Niño event on record and led to the second warmest winter since 1895. An El Niño-influenced winter typically brings warmer/drier conditions to the major gas consuming regions in the North and East.
- 2016 energy price forecast.
Wholesale natural gas and electricity prices are expected to slowly rise in 2016. Upside supply price risk is more likely than further downside moves. At the same time, many utilities are proposing rate case increases for infrastructure improvements and regulatory compliance.
- Key considerations for implementing renewables in your energy strategy.
a) Clarify stakeholder priorities
b) Identify constraints early
c) A high renewable goal is a marathon…not a sprint
d) Proactively handle financial risks in “Remainder of Supply”
e) Where are opportunities today?
For more information I invite you to watch the webinar recording. Our new Energy Price Hub is also a great resource to help you stay informed and get the latest updates on energy prices and market intelligence.