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| Thursday Jul 11, 2024 | |
| Hurricane season in the gulf is always an active time for an energy analyst as Mother Nature is in the habit of throwing a wrench in the energy grid. A few years ago it was winter storm Uri, which brought freezing temperatures blanketing much of the country and pushing ERCOT’s gas and power infrastructure beyond its ability to cope, bringing sky-high prices and sparking the conversation that culminated in ERCOT making significant revisions to its ORDC rules and lowering the price cap to the $5,000 still in force today. This summer it is Hurricane Beryl—the earliest category 5 hurricane to form since 2005’s Katrina. Beryl made landfall at the start of the week, toppling power lines and wreaking devastation starting in eastern Texas and spreading east and ... » read more | |
| Wednesday Jul 10, 2024 | |
| We called it the first test of summer in our AESO Market flash on Monday and it was quickly followed by the second test yesterday in Alberta. Temperatures broke records in the province with highs in the upper 80s and low 90s. It led to a record-breaking level of demand for Q3 yesterday and an emergency alert called on Monday night. The heat isn’t over as Alberta’s newly coal-free grid continues to face tests in the summer heat. Figure 1 | July 8th Power Pool Prices and Temperatures Forecasts from Atmospheric G2 Peak demand jumped a gigawatt from 10.7 GW last week to 11.7 GW on Tuesday night, but it was Monday night’s demand that came with 10.9 GW of net load. Wind generation fell Monday morning and stayed under 0.3 GW for the rest of the day. Pool prices settled between ... » read more | |
| Tuesday Jul 9, 2024 | |
| The natural gas world has seen a lot of molecules flowing around in every pipeline, not only in the Lower 48, but also in Canada. The combination of a mild winter and robust natural gas production is the reason why the storage caverns are ahead of time. The graph illustrated below displays the storage levels in Alberta from 2020 to July 2024. The year 2020 is in grey, 2021 in dark blue, 2022 in orange, 2023 in yellow and 2024 in light blue. Figure 1| Alberta’s storage level, 2020-2024 The previous withdrawal season ended with 301.25 BCF in storage (after 2023-2024 winter season) which was extremely high at that time of year. If we look back in the past years, 2021 is the closest at 210 BCF following a year of peak covid period which led to low demand levels. So far this ... » read more | |
| Monday Jul 8, 2024 | |
| High power prices result in high heat rates and consequently more of the natural gas generator fleet can profitably turn on. In other words, more demand for power means more demand for gas. This was the case in California when the North (NP15 or PG&E service territory) hit near record high temperatures on June 3rd. Sure enough demand followed with a 0.355 BCF DoD increase in PG&E. Confusingly, the PG&E spot NG price had a DoD drop of $0.62. So, when demand increases and price deceases we must turn to supply. Figure 1 | California Regional Natural Gas Demand Summary (MMBcf/d) by Region From June 24th to July 3rd daily NG imports into California increased from 3.06 BCF to 4.37 BCF. This brought supply to comparable levels to those seen in June and July 2023, which were record ... » read more | |
| Friday Jul 5, 2024 | |
| June brought a significant increase in total system load to ERCOT—not only a large increase month-on-month (54 GW in May, compared to 62.1 GW in June), but also a significant increase year-over-year. At over 62 GW, this June beat out June of 2023 by 2.5 GW. Some of this came down to the structural load growth that has been in the conversation in ERCOT heading into the summer, but Texas also saw temperatures that were significantly hotter than normal for most of the month. All of the hot and sunny weather was great for solar generation, which continued to provide peak output close to 20 GW on the sunniest days. However, the figure below shows that wind also performed extremely well, especially for the time of year, when the more typical trend is for wind to die down with the ... » read more | |
| Wednesday Jul 3, 2024 | |
| Monday was the first day of July and with a new month comes new publications of our monthly dashboards. These dashboards are updated every month on the 1st with updated data that allows for insights into trends on monthly, quarterly and yearly levels. Take a sneak peek at three of our monthly dashes below. If they peak your interest, we offer individual monthly/annual subscription access via the EnergyGPS eCommerce Platinum Package. If you would like multiple licenses or incorporate the content into a broader North Amercia Power and Natural Gas product, email us at [email protected] for more information. CAISO Monthly Battery Dashboard (sample) As we mentioned a few weeks ago in this blog, the CAISO Monthly Battery dashboard has been recently updated. One of the first ... » read more | |
| Tuesday Jul 2, 2024 | |
| We have talked about the robust wind generation we saw in SPP this past June, but the Lone star state was also lucky this past June, as Mother Nature gifted ERCOT an impressive amount of wind volumes. The graph below shows a year-on-year comparison of net load and its components (load and renewables) for the past three years, with 2024 in yellow, 2023 in red and 2022 in blue. Figure 1 | ERCOT Monthly Profiles, 12x24 YoY The wind output for this past June is not far from the level seen in June 2022 but the 2024’s shape was somewhat higher across the evening block of hours. Also, if we zoom in on the bottom pane, net load was lower this June 2024 mostly because of the increase in solar generation, but also it was slightly lower during the evening hours when wind megawatts were ... » read more | |
| Monday Jul 1, 2024 | |
| Part of what keeps our job interesting is the interconnectedness of different markets. It’s never enough to only track the story of an individual power markets. To really grasp what’s driving those prices on any given day you also need to have a handle on the larger interconnect (unless we're talking about ERCOT of course), the overlapping natural gas markets, weather forecasts, renewable forecasts… the list goes on. And for each one there will always be new nitty gritty details to uncover. It can be a lot, but the good news for you is that we track them all. A perfect example of this comes from today’s movement in CAISO’s demand and price. The line in green shows day ahead load on June 25th while blue depicts the same values for July 1st. If you thought of ... » read more | |
| Friday Jun 28, 2024 | |
| We have been developing a fundamental-based long-term forecast model for the last few years. As part of the forecast, we use a Production Cost Model (PCM) to forecast a future capacity mix across the WECC. The PCM solves for the future capacity mix by finding a least cost solution to meet future load growth given a set of generator candidates subject to policy and operational constraints (e.g., Renewable Portfolio Standards, Clean Energy Standards, emission targets, transmission constraints, build constraints, etc.). One of things we have found through the course of developing our long-term forecasts is that the amount of capacity required to meet current policy goals greatly exceeds the amount of capacity that has been historically added to the WECC. For example ... » read more | |
| Thursday Jun 27, 2024 | |
| The transition from the shoulder months into the summer season was a time of relief for everyone in CAISO showing up at SP15 with generation to sell during the heart of the midday. Over the first five months of 2024 the market was inundated with excess supply in Southern California as the new solar capacity additions since the summer of 2023 came online and showed up in force, complicated by a strong hydro year leaving the reservoirs close to full and large surpluses of gas in storage throughout the West, driving gas prices down and incentivizing plenty of thermal generation. The result was plenty of solar MW without an easy home and limited transmission to move it out of the region, leading to massive congestion at the SP15 hub and large negative midday prices. ... » read more | |