Help CenterThe RenewaFi Price Tracker relies on a forecast of hourly electricity prices in ERCOT. To calculate this forecast, we start with forward block prices sourced and averaged daily from large brokers. We then use scalars to convert those block prices, which are expressed monthly, into a new price curve with hourly granularity, which is required to analyze renewables shapes. The model can then adjust the hourly price curve based on a range of net load assumptions. By isolating these assumptions, the model aims to be as objective as possible.
Forward block prices represent where traders agreed to transact on a given date for energy that will be delivered at different times in the future. These block contracts typically trade over-the-counter and describe the price and delivery of energy during a pre-specified group of hours for an entire month (e.g., the August 2026, ‘on-peak' block). We calculate the forward block prices by averaging several forward block price curves, which we source daily from large brokers.
Below is an example of a forward block price curve for on-peak prices at Houston Hub.
These forward curves are made up of monthly contracts with a single price for each on-peak or off-peak hour throughout the entire month. If we zoom in to a single year and look at just the on-peak monthly contracts, the curve looks like this:
If we zoom in even further and look at a single month of data, notice that actual historical electricity prices (dark green) fluctuate dramatically in relation to the forward block price (light green).
Since solar and wind are intermittent resources, their generation fluctuates dramatically, and the value of the generation is highly sensitive to hourly price movements. To analyze these intermittent resources, we therefore need to transform forward price curves into hourly, rather than monthly, granularity. In summary, our model replicates the hourly variance as shown above in the dark green line rather than using the single monthly price shown by the light green line.