Menu
Featured Articles
| Thursday Aug 11, 2022 | |
| The middle of August 2022 is another example of how the Pacific Northwest and California are connected as both regions are looking at heat moving into their respective territories. Such an event is setting up a battle of the megawatts that typically flow between the two regions on both the AC and DC transmission lines on any hour for a given day. Figure 1 | CAISO 7-Day Peak Demand – Actual and Forecast Starting with California, the heat is going to be extended along the coastal region of the state to which has not been seen for over two years. When this occurs, the demand areas around San Franscisco and Los Angeles tend to consumer a substantial amount of energy for AC cooling and the grid has exposure to sub-regional bottlenecks around getting megawatts from source to ... » read more | |
| Wednesday Aug 10, 2022 | |
| The beginning of August has shaken up the SoCal gas world with SoCal CityGate pricing more than a dollar over PG&E CityGate. It’s the first time this summer we’ve seen a premium for SoCal like this, contrary to previous summers when SoCal has priced over frequently to move power burns up north. Last week, we published a monthly report, titled ‘July 2022 Fireworks’, that detailed the fundamentals in July that led to SoCal’s low pricing last month. Let’s review the fundamentals from July to understand our starting point for this month. The weather in California remained mostly mild in July, even as the surrounding regions experienced summer highs. For those betting on SoCal needing gas to meet demand for some hot summer days, this July was a ... » read more | |
| Tuesday Aug 9, 2022 | |
| This has been one of the most eventful years for trading commodities especially natural gas. The issues in Europe combined with the underlying supply/demand tightness have kept a fire burning under the price support. But one of the biggest events of the summer was the loss of the Freeport LNG terminal to a rupture in mid June. The shut down of the facility backed 2 BCF of liquefaction gas back into the daily balancing. Each turn of the saga between the Freeport operators and the Department of Transportation-Pipelines and Hazardous Materials Safety Administration(PHMSA) has been the basis for more price volatility. While Freeport has maintained a quick turn around from the repairs with operations expected by the end of October the PHMSA has pointed out several issues and a need for a root ... » read more | |
| Monday Aug 8, 2022 | |
| As the Pacific Northwest is dealing with a mini-heatwave, California is taking on the challenges congestion showing up between the North and South zones. Such an event basically islands off the LA Basin region as the lifeline transmission lines tied to the DC intertie, Palo Verde and Mead are either delivering less volume or netting export volumes to help serve their respective power demand profile. This is especially true across the heavy load block of hours (HE7-HE22), with the focal point being during the evening ramp block (HE17-HE20). Figure 1 | CAISO Day-Ahead Marginal Congestion Component (MCC) The graph above illustrates what we are talking about when it comes to the congestion between SP15 and NP15 over the past nine days. The x-axis represents the hours within ... » read more | |
| Friday Aug 5, 2022 | |
| Over the last few months we’ve observed a significant uptick in inbound requests for information about deal structuring and nodal pricing in the Energy Imbalance Markets (EIM) outside of the CAISO balancing authority footprint. While we routinely have clients seeking to understand how transmission costs, scheduling, and logistics works outside of the CAISO, we are seeing increasing interest in understanding how to manage busbar price exposure if selling at an EIM node. The increased interest at EIM nodes is driven by QF deals where energy settles in the EIM, corporate deals where corporate off-takers wish to settle at an EIM hub and the project bears the EIM node to EIM hub risk, as well as merchant exposure post-PPA time period or projects with nameplate capacity in excess of the ... » read more | |
| Thursday Aug 4, 2022 | |
| As we move into the second full month of summer, the Pacific Northwest hydro is at a transition point. Each water year, sometime between the middle of July and the very beginning August the hydro system reaches the culmination of the refill efforts beginning in early spring and April showers and melting snow provide the elevated flows needed to replenish water in the reservoirs behind the major storage projects all along the Columbia and Snake Rivers. The figure below illustrates the trend over the past four years, showing daily total MAF in storage peaking each year right as July turns into August (except for 2021, where the heat and dryness were so severe as to require supplemental releases from storage a couple weeks early). Early in August, projects transition from ... » read more | |
| Wednesday Aug 3, 2022 | |
| Prices spiked to almost $1000 /MW last week in Alberta. A few factors contributed to this, including rising temperatures and a lack of wind. With another heat wave expected for AESO in the next week, let’s take a look back at what culminated when red overtook the Alberta forecast in the last week of July. The figure below from Atmospheric G2 shows the temperature forecast from Wednesday, July 27th. The day was above normal seasonal temperatures with highs in Calgary at 82 degrees. And it only got hotter over the next two days with highs in the upper 80s. The weekend and into this week cooled slightly, but still offered temperatures above seasonal norms. As always, the heat increased load as people reached to turn on their ACs. Figure 1 | Min/Max Temperatures in AESO from Atmospheric ... » read more | |
| Tuesday Aug 2, 2022 | |
| At the advent of the energy trading industry some 30 years ago hurricane season meant that weather events would pick up in the Atlantic Basin increasing the threat to off shore supply in the Gulf of Mexico. Market participants would assume a bullish bias on natural gas prices as storms would form in the Atlantic. That mantra has changed over the past 15 years as more supply was moved to on shore destinations with the fracking revolution. Now a hurricane development has the opposite effect. As storms make landfall they threaten shipping avenues reducing the LNG liquefaction demand along the Gulf Coast. On shore demand is also at risk as winds and heavy rains knock out power demand. This year the hurricane season is off to a slow start. There have been no major storms in the Gulf ... » read more | |
| Monday Aug 1, 2022 | |
| After spending the past weekend in the Seattle area, the one thing is clear: the demand in the region is not going to be going down anytime soon in the summer months. Especially if you consider the hot days like we have seen over the past week or so. I say this because the new build popping up everywhere includes hotels, apartment complexes and additional buildings to existing businesses. Each one is fitted with some sort of AC to which is being used to cool an area that once relied on the overnight coolness relieve themselves of the next round of daytime highs north of 90 degrees. Figure 1 | Pacific Northwest and its Heat The ‘staying cool in the heat’ memo that is blasted on the television in the hotel room has the top priority of finding a cool or ... » read more | |
| Friday Jul 29, 2022 | |
| ERCOT has been the market to watch since the beginning of this year, starting with the news about their new ORDC rules taking effect in January and continuing with what feel like constant real time price spikes. The Texas market has been so volatile that we have released around two dozen market flashes so far this year about ERCOT alone (in addition to numerous blogs, articles, and special reports). Even in the typically mild shoulder months, hubs have seen real time prices jump into the thousands of dollars per MWh. This is having a significant impact on the value of renewable generation; solar and wind values have risen to amazing highs. However, it’s important to understand the components of the value. Prices overall are high right now for a variety of reasons, including factors ... » read more | |