Abstract:
The large reductions in electricity demand caused by containment measures have been disruptive to electricity markets around the globe. This article draws insights from New York into the consequences of the lockdown on hourly demand, forecast errors, day-ahead (DA) and real-time (RT) markets. The New York State is found to experience a 7.5% electricity demand reduction while NYC is the most affected area with a 12% reduction. At the same time, load forecast errors have surged to unprecedented levels during the first weeks of the measures. We decompose the effects of the lockdown, forecast errors, fuel price drops on the DA and RT prices. From mid-march to early April, the DA market has depreciated by 20% whereas the RT market has appreciated by 50%.