In 2023, power grids with c20-30% solar variation tend to have intra-day spreads of 9c/kWh, between peak wholesale electricity prices at 8pm and trough prices at 10am. Unusually, night-time electricity prices are 40% higher than day-time prices. This data-file quantifies California electricity prices, on a wholesale basis, at a sample of grid nodes, looking hour by hour in August-2023.
By 2023, California is generating 20% of its electricity from utility-scale solar and 10% from utility-scale wind, while the total generation from solar is as high as 30% if residential/rooftop solar is also included (EIA data here).
Hence the purpose of this data-file is to quantify the hour-by-hour volatility of power prices in a solar-heavy power grid, estimating California electricity prices by hour, using reported wholesale electricity pricing from CAISO, at individual nodes in the grid.
Across our sample of grid nodes, we find that locational marginal price has averaged 6.5 c/kWh on a wholesale basis during August-2023. The data-file also contains similar snapshots for August-2022, August-2021, August-2020, to see how intra-day power prices changed over time.
Peak and trough electricity prices? California’s lowest wholesale electricity prices are found at 10am-noon, at below 4c/kWh. California’s highest wholesale electricity prices are found at 8pm, at above 13c/kWh. Over time, there is also evidence suggesting that the curve has been getting steeper (chart below).
Electricity price variations by day? The data above entail that the maximum intra-day spread has recently been running at around 9c/kWh, which is lower than the 20c/kWh we think is needed for grid-scale batteries to generate attractive economic returns on storing up ‘excess’ solar during the peak of the day, and re-releasing that electricity later in the evening, after the sun has set. Although there are other more exciting roles for batteries in the near-term. For further details, please see our energy storage research.
Variability? Hour-by-hour price variations are not the same on all days, but vary vastly, with a sharp upside skew. The chart below plots the distribution of the maximum spread between each evening’s highest priced hourly power price and its prior day-time average. In theory, this is the distribution of spreads available to an intra-day battery operator.
Night versus day? Average night-time wholesale electricity pricing of 7c/kWh is now 40% higher than average day-time wholesale electricity pricing, which is somewhat unusual, as in most grids, night-time prices are lower than day-time prices. This may in turn be an argument for efficiency investment to reduce night-time electricity loads, such as efficient lighting systems.
Note that retail electricity prices are higher than wholesale prices, as they also include transmission, distribution, utility costs and taxes. At the time of writing, the latest EIA estimates are that retail electricity prices in California average 25c/kWh, including 31c/kWh for residential consumers, 24c/kWh for commercial, 19c/kWh for industrial customers, which also reminds us that overall systems can be materially higher than marginal generation costs, per our recent research note here, and all our broader power grid research.