Help CenterNet load is the amount of electricity demand that cannot be met with renewables. It’s calculated as load minus supply from wind and solar. The chart below shows net load across ERCOT for an average summer day since 2020.
As net load increases, more supply comes from fossil fuels, which are more expensive than renewables. So when net load is high, we expect prices to be high as well.
Since net load is changing rapidly, we cannot apply historical net load amounts to future projections. Rather, our model creates an hourly net load forecast based on long-term solar, wind, and load growth assumptions, which we source from reputable third parties. We then use that net load forecast to determine when, how, and if hourly price trends will change.
To understand the effect of net load trends on pricing, we plot historical net load against historical scalars. As a reminder, scalars are the quotient of hourly price and the relevant block price. The chart below shows this relationship during summer months at Houston Hub. Hours with higher net load have exponentially higher prices. If net load in a given hour is forecasted to reach 55 GW, as shown in the chart, we adjust the hourly scalar accordingly.
The Price Tracker currently shows two net-load scenarios. To read more about each of those scenarios, see the links below: