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Monday Jul 8, 2019   
Hopefully everyone enjoyed the long holiday weekend that included some fireworks on the 4th of July.  In the energy markets, the fireworks included a 6.4 magnitude earthquake that shook Southern California during the morning of the 4th and aftershocks that were felt in Las Vegas a couple of days afterwards.  From a grid reliability standpoint, things look to be fine as there were no notices sent out by SoCal Gas tied to the quakes.  From a power standpoint, the hourly demand profile was moderate as temperatures were tempered all weekend with daytime highs in the low 80's across the region. Figure 1 | CAISO Day-Ahead Hourly Load Profile  As we work our way through the West, the Pacific Northwest saw few fireworks from the power grid as wind output was strong from ... » read more
Wednesday Jul 3, 2019   
Coming out of the winter, Socal Gas had a couple of hurdles that needed to be addressed prior to summer.  Depending on the outcome of each would impact how the market would look at the physical flow of power and what price to attach to the daily market settle.  If you recall, last year saw some massive volatility as SoCal Gas added over 10 BCF of gas storage over the summer months of July and August.  This brought a bid to the market as the incremental buying was during a time when the transport capacity from the Desert Southwest was limited due to constraints tied to the L235 work being performed.  Mother Nature also had a say in things as the month of July was one of the warmest on record in Southern California.  In fact, it was about this time last year where ... » read more
Tuesday Jul 2, 2019   
The Midwest is seeing its first heat event of the year this week. Temperatures have soared into the low 90's and with the saturated ground from the record breaking rains the heat indexes are near 100. As a result the net loads for both MISO and PJM have soared. The biggest change happens to occur on the off peak hours. With the overnight lows moving into the mid 60's, we are starting to see around the clock increases in cooling load. This is forcing both control areas to add more resources to the grid to meet the demand.  Figure 1 | Chicago Hi/Low Temperatures for May-July  Thanks to this spring's drop in natural gas pries we have already seen the generation stack push as much coal output out of the dispatch. If you look at Figure 2 below, MISO and PJM gas generation is already ... » read more
Monday Jul 1, 2019   
This week's EnergyGPS Newsletter article, titled 'The Storage Story - Chapter 2', highlights how the power market is evolving now that several of the Independent System Operators (ISO's) are spending the majority of their day discussing how the supply stack is changing with the likes of wind and solar penetration what it is and where it will be going in the next couple of years.  Many regions are able to piggy-back off of the lower natural gas production basins and build flexible gas-fired units that are useful for the intra-day volatility around the net load. Figure 1 | California Net Load Profile - Hourly As you can see in the figure above, the state of California has to deal with the massive amount of solar penetration on a daily basis as the entities involved continue to strive ... » read more
Friday Jun 28, 2019   
It’s the Friday before the 4th of July which means one thing dear blog readers – you will find nothing about the energy markets in today’s issue. Your author of today’s blog is Tim Belden, one of the Principals at EnergyGPS. As has become custom for several years, I will provide you with a recap of my Aluminum Man competition held in Sisters, Oregon last Saturday. Long time readers are familiar with the competition. In fact, a small number of readers claim this annual update is the only reason they subscribe to this blog. The event is called “Aluminum Man” (think aluminum foil) because it is the opposite of an intense event such as Iron Man. The event consists of twelve men competing in a series of ten individual and team events where teams are created ... » read more
Thursday Jun 27, 2019   
While the heavy rain shifted temperatures lower at the end of last week, the weather has begun to heat up as we head into Q3-2019. Looking at Figure 1, we can see that an orange blob has begun to cover the region. In practical terms, averages have climbed into the 80's throughout the southern portion of PJM while more northern regions are still reaching up to the high 70's. Although the weather has not reached near record highs, the warm temperatures will see start to slight the marginal MW higher in the supply stack and start to show market participants how hedged entities with power load are this smmmer. Figure 1 | WSI Northeast Average Temperature Forecast Taking a look at PJM, the market posted a notice on Wednesday alerting participants of upcoming high demand and listed hot ... » read more
Wednesday Jun 26, 2019   
If you live in the Houston metro area, you need to open up your favorite music app and search on Garth Brooks and his song 'Thunder Rolls'.  As you start to hear the words and sing along, the refrain portion of the song goes like this 'Thunder Rolls, Thunder Rolls'.  As that comes to an end the chorus lines are next in the queue with the opening portion stating 'the thunder rolls and the lightnin strikes, another love grows cold on a sleepless night.  As the storm blows out of control, deep in the heart the thunder rolls'.   Figure 1 | Garth Brooks - Thunder Rolls The words of the song depict the current weather pattern that has moved through portions of the Lone Star state, specifically Houston, over the past week or so and by gauging the weather forecasts, the ... » read more
Tuesday Jun 25, 2019   
SoCal Gas is the one delivery region that has drawn more attention from the market over the past three years. It goes back farther than that but the real concern started in the aftermath of the Aliso Canyon rupture in 2015. The cavern issues not only highlighted how precarious the SoCal Gas balancing had become without the use of its largest cavern but the sad state of disrepair the entire natural gas system had become across the state. Reliability was the immediate concern but it became much worse as the CPUC enacted rules around the delivery of gas to and from Aliso Canyon that exacerbated the balancing and subsequent pricing mechanisms. No longer could Aliso Canyon be used for normal day to day use despite certification from the states DOGGR engineers. It would only be used in the ... » read more
Monday Jun 24, 2019   
Ever since the middle portion of the month, California temperatures have been moderate at best with both Sacramento and Burbank coming in slightly below average as of late. This has prompted less power demand across the Golden State with the peak load topping the 34 GW mark for a day each week then quickly sliding back down the mountain. Figure 1 | CAISO Peak Power Demand - Daily This in and by itself is quite a bit different than where we stood last year at this time as the state was starting to warm up and eventually give us the hottest month of July on record.  When you throw in the fact that the wind generation has been blowing and the in-state hydro is churning out more than 1.1 GWa of generation on a daily basis, you have a grid with plenty of capacity that is not tied to ... » read more
Friday Jun 21, 2019   
We at EGPS have already written a couple articles analyzing grid-level batteries (Pomona Battery, How Do Batteries Make Money?). There are many intricacies and interesting outcomes that result from the interactions of batteries and wholesale markets, and we get excited about studying them. In Pomona Battery, we looked at a case study of how a real battery in operation in the CAISO dispatched and generated revenue. In How Do Batteries Make Money, we looked at a higher level of which markets and trading strategies are most profitable. What we have yet to discuss, however, is how to choose where to put a battery, should you be interested in becoming the owner of one. How do you tell if one nodal location is better than another? Is there a simple metric that can lend insight into the relative ... » read more
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