Industry Analysis
Jan 19, 2024

ERCOT 'Duck Curve' Impacts Financial Analysis of Renewables Shapes

The deepening of the ‘duck curve’ in ERCOT is dramatically affecting financial analysis of renewables shapes.

  • Wind is becoming relatively more valuable compared to solar.
  • Storage is growing in light of increased opportunity for energy arbitrage.

The chart below compares power price trends in July 2020 to July 2023. By calculating the average real-time price for each hour and dividing it by the relevant on or off-peak average, we obtain 24 values representing the relationship between each hourly price and a group of prices from similar hours.

This method normalizes the prices, allowing us to track changes in each hour's relative value from year to year.

In recent years, hourly prices in summer months have become more volatile as on-peak evening hours settled significantly higher than on-peak morning hours. Consider, for example, how the average price at hour 20 (8:00 pm) changed from July 2020 to July 2023. In 2020, the average price was slightly lower than the on-peak average. In 2023, however, it was about 4 times higher than the on-peak average.

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