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| Wednesday Sep 8, 2021 | |
| With the passing of Labor Day, it is time to put away the sparkly whites and seer-suckers and accept that the transition to fall is underway. Weather forecasts and energy markets now embark on the transition from cooling-degree days (CDDs_ - in which heat drives demand for electricity to power air conditioners - to heating-degree days (HDDs) in which cold temperatures drive demand for natural gas and electricity to run furnaces and heaters. The transition typically moves latitudinally, starting earliest in the Canadian energy markets over the next few weeks before HDDs become firmly entrenched by the end of the month. As this transition takes place this year, it will provide a good environment to see the effects of structural changes in the Alberta gas ... » read more | |
| Tuesday Sep 7, 2021 | |
| The long Labor Day weekend has come and gone but not is all lost in the long holiday weekend memories as it symbolized the start of college football, gave the children one last period to hang out with their friends before digging deep into the books and getting to sleep in one extra day instead of waking up on East Coast time on the West Coast. As we turn the corner and look forward to the fall season, there is a lot going on in the energy markets from a fundamental standpoint as a hurricane whipped through the Gulf and knocked out power along the Gulf Coast. The remnants from the storm moved up the Atlantic Coast and drenched the Northeast where the region saw massive flooding that will take time to fully recover from. Out West, the battle of the fires is ... » read more | |
| Friday Sep 3, 2021 | |
| This year SPP has enjoyed an impressive showing from the renewables portion of its supply stack, with average wind generation exceeding 12.5 GW in March and April, and 10.8 GW in May. After dipping in June and July to levels comparable to 2020, August saw a resurgence as wind again reached 10 GW on average, over two GW higher than the previous year. Accompanying this explosion of wind generation has been a similar explosion in wind curtailments, as heavy wind production brought down net load numbers compared to previous years. Figure 1 shows cumulative SPP wind curtailments for each of the past four years, with 2021 shown in blue. Starting in February curtailments diverged from the prior three years, rising sharply throughout the spring and then leveling off in late ... » read more | |
| Thursday Sep 2, 2021 | |
| The summer months in ERCOT have been quite different compared to previous years for a lot of reasons but the one that sticks out the most is tied to the real-time price action across the board. For example, the forward curve always put a premium to July and August as the power demand hourly profile was at its peak given the fact that AC units usually ran around the clock for long periods. On the supply side, the supply stack would work through the lower cost units only to be left with the units that sat in the steeper portion of the curve. Throw in the fact that ERCOT had the Operating Reserve Demand Curve (ORDC) uplift charge incorporated into their model/calculation. The trigger for such the uplift charge was when the reserve levels reduced to a threshold that ... » read more | |
| Wednesday Sep 1, 2021 | |
| A couple of days before Ida formed into a full-fledged hurricane, forecasts indicated the storm would strengthen and take aim at Mexico. Instead, Mexico was almost completely spared the effects of Ida, but the country did not experience such luck earlier in August. Nor is Mexico even close to being out of the woods for the remainder of the 2021 hurricane season. Mexico can get hit by storms off both the Atlantic and Pacific oceans. In general, tropical storm season tends to be demand-destructive, which – in turn – can cut U.S. pipeline exports to Mexico by some pretty large daily numbers. Although, there is history of tropical storms being disruptive to Mexico’s own productive capacity, too. Since Mexico’s tropical storm season ... » read more | |
| Tuesday Aug 31, 2021 | |
| It has been three days since Ida landed on the Louisiana Coast as a category 4 storm with wind speeds up to 150 miles per hour. Ida hit the New Orleans area exactly eleven years after Hurricane Katrina devastated the city in 2005 but fortunately the damage reports have not come in as severe as that event. Currently there are over 1 million people without electricity in the metro area and one hundred thousand outages in Mississippi. Fortunately the loss of life has been minimal. Because the entire Louisiana Coast is without service it is hampering efforts to bring off shore oil and natural gas production back to market. Figure 1 | Power Outages Map as of Tuesday Morning As a precautionary measure platforms were evacuated on Friday dropping Gulf natural gas receipts by 1 BCF per day. » read more | |
| Monday Aug 30, 2021 | |
| California saw some heat last week that changed the supply/demand balance to which drove the overall natural gas demand in Southern California to a level that warranted SoCal Citygate to move back up to $7.16 level. Such a level pushed the California Citygate spread out to $1.83, this was after a week where SoCal Citygate settled under its counterpart to the north. The reason behind all of this commotion is the simple fact that the SoCal Gas demand (Sendouts) rose above the total import volume that was flowing on a typical summer day. When this occurs, storage gas is going to be needed and the cost to the system operators increases instantaneously. We have seen this occur over the years so it was not too surprising to say the least. Figure 1 | SoCal vs. PGAE ... » read more | |
| Friday Aug 27, 2021 | |
| By Tim Belden A few weeks back I wrote about the signs of a bull market in natural gas and electricity – or at least perhaps the end of what has been a 5+ year systemic bear market in North American electricity and natural gas commodities. The energy-related bull markets are everywhere. The labor market for experienced energy personnel is red hot. Just ask anyone looking for a job or trying to hire someone. I know of a person with 15 years of experience in the biz who is not actively looking for a job who keeps receiving unsolicited, inbound inquiries. He waits. The inquiries keep coming and getting increasingly rich. When people started dangling 150% of his current comp package things start to look interesting. Companies in the “energy transitions” niche are in the ... » read more | |
| Thursday Aug 26, 2021 | |
| The Deep Freeze that hit Texas in February created shockwaves that are still being felt today, and likely will continue to be into the future. The extreme (by Texas standards) cold created a cornucopia of factors - each potentially debilitating on their own - that crashed the grid. Nearly 4.5 million customers lost power and heat, a situation that proved fatal. Those that remained online ended up paying prices that obliterated previous record highs. In our Energy GPS ERCOT subscription package we issue market alerts during timely market events. Typically these amount to 2 or 3 per week; during the Deep Freeze, we were putting out 2-3 per day as market conditions were evolving so rapidly, with each movement featuring massive moves. A decent portion of the ... » read more | |
| Wednesday Aug 25, 2021 | |
| Over the past several months, the West Power market has been at the forefront of many conversations as it was just over a year ago when California was in the mist of rolling energy blackouts for a two-day period and the Desert Southwest was dealing with plus 120 degree daytime highs for multiple days in a row. The Pacific Northwest sat back and basically watched as both of its counterparts were reeling. Some of the comfort came from the simple fact that there was transmission capacity de-rateshappening and a power load profile that was being impacted by the pandemic along with moderate temperatures. The biggest contributing factor to the comfort of the Pacific Northwest market participants was the simple fact that the 2020 Water Year was such that the late coolness kept the ... » read more | |