Data suggests California sees highest electricity prices in mornings, evenings

A report from the U.S. Energy Information Administration (EIA) released this week shows that California’s hourly electricity prices have increased in morning and evening hours as the need for flexible generation has also increased.

The prices over the past three years have reflected the California Independent System Operator (CAISO) energy market’s increased prevalence of generation on demand. Recent years have seen morning and
evening hours increase in energy load with the addition of both utility-scale and small-scale solar generators. Operators have to supply electricity changes to match rapid changes in demand, and during those hours is when solar generation is still getting started or tapering off.

CAISO had anticipated this change of demand back in 2013, dubbing the daily “curving” of energy use a “duck curve.” As such, they have evolved alongside their net load, bringing in flexible generators to ramp energy use up and down to reflect demand after variable resources like solar and wind power have kicked in. As midday is when solar output is highest, that is when prices tend to be lowest.

CAISO’s wholesale prices are controlled by the variable cost of the most expensive generation used to meet the burdens of a given hour’s system load.