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| Wednesday Oct 5, 2022 | |
| Since 2020, the Southeast region of the US has lost 5 GW of capacity from coal plant retirements. The region is set to lose an additional 2.75 GW in the next 3 years. As the coal plants shutter, the next resource to be relied upon is often natural gas. It offers reliable energy, not dependent on the time of day or strength of the wind like renewables, but with fewer pollutants than coal. In years past, the grid alternated between coal and gas based on economic factors, such as gas prices and rail transport costs. Now the coal to gas switching is much less flexible as the number of gigawatts from coal plants dwindles. As we head into fall, let’s look back at how coal to gas switching played out in the Southeast region in the last summer month. Figure 1 | Net Summer Capacity of ... » read more | |
| Tuesday Oct 4, 2022 | |
| Now that Hurricane Ian has done its damage and dissipated it is time to do some post mortem on the storm effects. The storm landed on the US Gulf Coast as a Category 4 hurricane, knocking out 2.6 million Florida customers off the grid. After replenishing itself in the Atlantic Ocean, the hurricane made its second landfall as it created havoc across the Carolinas where another 600k customers lost service. With approximately 3.1 million customers suffering from the storm impact, the power sector has seen a big decline in supply volume. This means that the natural gas generation piece would have to turn off in order to balance the demand needs. As a result we saw a cratering of power burns. In one weeks time, the Lower 48 power burns fell from 35 to 28 BCF per day with most ... » read more | |
| Monday Oct 3, 2022 | |
| The calendar turned the page over the weekend as the third quarter came to an end and now the fourth is upon us. The page turning from September to October is when a new Water Year is upon us here in the Pacific Northwest, which means that the hydro deck gets a bit of a reset to which Mother Nature gets to take another run at things. In the early parts of the new Water Year, the parallels to sport ring true as the first couple of months are like preseason where everyone is trying to get the kinks out from having some time off and build a chemistry with the key veterans before the regular season starts off. Figure 1 | NBA Preseason Schedule With the Pacific Northwest, the hydro year does not get the summer off per se as the power grid tends to rely on the flexibility quite ... » read more | |
| Friday Sep 30, 2022 | |
| With the energy crisis that is raging in Europe right now, the European Union as well as individual countries are considering a variety of capping mechanisms on gasoline, natural gas, and electricity. The history of price caps in market economies does not have a long list of happy endings. Instead, the landscape is littered with good intentions and unintended consequences. That’s not to say that discussions of temporary price controls should not be on the table, it is a political necessity to do so. But if they are going to attempt such price controls, they should fully understand the likely outcomes and consequences. The motivation for caps typically comes from three areas. The first is consumer protection – government wants to protect consumers and industry from exorbitant ... » read more | |
| Thursday Sep 29, 2022 | |
| Throughout the summer the Northeast and Midwest have been dealing with a significant shift in the power sphere as several coal facilities have shuttered their doors forever. Since this spring PJM and MISO were slated to lose 5.3 GW and 4.3 GW of coal capacity, respectively, by the end of the summer. The impacts were felt as more reliance had to be placed on alternative sources of thermal generation—primarily natural gas. This more intense utilization of these units looks to have pushed the region's natural gas fleet to the limit. The figure below shows how thermal resources were deployed differently this summer in PJM compared to last summer. First, total thermal generation was quite similar, just 1-2 GW lower this June and August than last year ... » read more | |
| Wednesday Sep 28, 2022 | |
| ‘Tis the Season’ is typically heard around the end of the year as families gather and exchange gifts, sit around the dinner table and tell stories while sitting around a fire. In the electricity environment, we can use the slogan when describing the start of the SPP curtailment season, which has move up over the years. Figure 1 | SPP Cumulative Curtailment Volume – Year on Year Comparison The movement is on display in the figure above as each line represents the cumulative renewable curtailed volume by year starting in 2018. As you move up the calendar to the current year, the SPP system is having a hard time placing the renewable megawatts to that of power demand; hence curtailments exist. Take for example, 2018 and 2019 was as flat of a line as there can ... » read more | |
| Tuesday Sep 27, 2022 | |
| On September 20th the Texas Eastern Pipeline suffered an outage at its Colerain segment in Eastern Ohio. In the EBB posting there was no reason posted for the capacity cut and TETCO indicated that the pipe would be back in service near the 28th of the month. The loss of this pipeline segment forces volumes shipped out of the region back into the Appalachias. Both TETCO and NEXUS Pipelines were forced to either cut production or back up pipeline volumes flooding storage or available space on other pipelines. Figure 1 | Current NEXUS Pipeline Nominations Immediately when the outage was posted the basis differentials to the Henry Hub started to diverge. Dominion South cash basis prices were settling near minus $1.00 prior to the force majeure. Afterwards due to the ... » read more | |
| Monday Sep 26, 2022 | |
| As the heat moves through the Western region this week, it will be quite different than a couple of weeks ago when the California grid was at the brink of its supply output. A couple of reasons behind the comfort of the CAISO and utilities in the Pacific Northwest is the simple fact that the overnight low temperatures are acting as a natural air conditioner with highs in the upper 50’s/low 60’s in many key regions. The second element is tied to the fact that there is enough renewable output on display with the battery fleet leading the charge while wind/solar are supportive. The final piece is the simple fact that the Pacific Northwest Water Year is still paying off as entities still find a way for providing flexibility to the hourly profile. Figure 1 | CAISO ... » read more | |
| Friday Sep 23, 2022 | |
| We’ve discussed this concept in blogs before, but one approach that we frequently take to thinking about prices in ERCOT is to break them down into “buckets” based on implied heat rate. We look at the ratio of power price to gas price in any given interval, and decide whether that interval was experiencing scarcity, oversupply, or neither. This blog from a little over a month ago explored the “normal” hours, and discussed how even though prices in ERCOT this past summer have been volatile and spiky, the normal hours continue to behave, well, normally. This time, we’re looking at the oversupply hours. We’ll use North Hub real time prices, and we’ll define an “oversupplied” hour as one where the implied heat rate is less ... » read more | |
| Thursday Sep 22, 2022 | |
| Over the past week SPP appears to have hit an inflection point when it comes to seasonal renewable energy. The last two years the month of September has seen a point at which the rate of oversupply of renewable energy becomes much more common and the rate of wind curtailments increases. SPP reached this point in the last week, which can be seen in the figure below, which plots a running total for annual SPP wind curtailments each year going back to 2019. The yellow (2021) and purple (2020) lines for the past two years both suddenly increased in slope partway through the month of September and the brown line for this year shows an even more dramatic kink as the MW have been curtailed freely over the past few days. Figure 1 | Annual Cumulative SPP Wind Curtailments Part ... » read more | |