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| Monday Dec 20, 2021 | |
| The weekend brought the largest snowflakes to the Portland area I have seen in my life and that is saying something since I grew up in Wisconsin where there was plenty of white stuff falling from the sky during my childhood. The reason for the larger than normal flakes was due to the simple fact that the jet stream brought precipitation in the form of rainfall near sea level while the elevated portions of the region saw plenty the snowpack accumulation continue to increase. Early Sunday morning saw the temperatures dip down around the freezing level for a few hours in/around Portland to which the rain turned into a wet snow; hence the size of the actual snowflake grew to where it sort of felt like a wet miniature snow flake blankets were falling from the sky. Figure 1 | ... » read more | |
| Friday Dec 17, 2021 | |
| Electricity prices in ERCOT have been on a general downward trend over the past month and a half. Comparing average monthly real-time LMPS at ERCOT North hub over the past several months, the average price dropped from $48.77 in October down to $41.95 in November and even further in December, averaging $28.81 through the 16th of this month. These changes have been driven by two different factors: first, falling natural gas prices in ERCOT, just as they have fallen across most the United States in recent weeks. Second, ERCOT has moved lower in its supply stack due to decreased net load. The implied heat rate for ERCOT North decreased from an average of 9.8 in October down to 8.9 in November and 8.6 so far in December. Solar and wind generation in ERCOT were at ... » read more | |
| Thursday Dec 16, 2021 | |
| We all have had a bad day where things seem to be a little off. For example, the other day I was driving into the office for a virtual meeting only to find out I left my headset at home that I like to use. Since my entire system is predicated off of using the headset as voice and sound, I had to rush home (15 minute drive round trip) and grab the headset to which I was only a minute late for the call. Another example of a bad day is when you are rushed to get out of the house as you prepare the lunches for the kids and yourself only to realize around 11:00 am in the morning, the brown bag full of goodies was left on the kitchen island. Now some of you might be thinking that that does not sound so bad but it is the thought of our black lab dog having a nose for food ... » read more | |
| Wednesday Dec 15, 2021 | |
| Alberta energy markets take center stage for the next couple of weeks. While the rest of North America (except the Pacific Northwest) awaits the first real semblance of winter, Alberta will get a healthy dose of cold starting tomorrow and lasting through the end of the month. Over the past 10 days we have been discussing through our AESO power and AECO gas market reports how the incoming cold will accentuate structural shifts that have developed. The AESO power market could see hourly load record highs get tested, while, at the same time, wind generation will practically disappear from the market. The AECO gas market also stares at the prospect of new daily demand record highs, while also facing the prospect of supply loss in the form of production freeze-offs. A ... » read more | |
| Tuesday Dec 14, 2021 | |
| While North America has got off to a slow start to winter it is about to change in the coming days particularly north of the Canadian Border. Driven by extreme cold coming out of the Arctic, Western Canada is about to see some of the coldest temperatures on record for a December. From tomorrow through the end of the year average temperatures are going to fall to well below zero with departures 20+ degrees below normal. This is in stark contrast to what is happening in the Lower 48. Most of the Gulf Coast continues to see record warmth with daytime highs near 80 degrees.As of right now most of this record cold weather is confined to Canada with some impact in the Pacific Northwest. And as of this morning the ridge that is keeping this formation north of the border is remaining intact so ... » read more | |
| Monday Dec 13, 2021 | |
| A white holiday season is in the cards for many regions across the northern part of North America as this weekend delivered the goods. For example, on Saturday morning in rural WI you would have been snowed in as Mother Nature delivered 14 inches of the white stuff. It is at that time, you hope the wood pile inside your attached garage is stacked so you do not have to go outside until the County snowplowing crew can get to your rural driveway to plow a path for your vehicle to get out if need be. Figure 1 | Recent Wisconsin Snowfall The recent event did not seem very likely given the fact that the start of the winter season was quite moderate when it came to delivering colder weather across key demand regions in the Lower 48. As a result of such conditions, the overall ... » read more | |
| Friday Dec 10, 2021 | |
| By Tim Belden For many years Energy GPS has been supporting corporate buyers of renewable energy to navigate the often tumultuous and sometimes frothy waters of wholesale electricity markets. In the 2015 to 2018 time period, a chunk of this work entailed explaining to corporate off-takers why their VPPA settlements were negative and re-calibrating expectations for the future. Of course, early deals were done back in the days of jacked-up forward curves and buyers who probably didn’t ask the hard questions. In particular, the forward curves underpinning their expectations were often based on much higher natural gas prices (not to mention renewable “capture rates” or “shape values” that were too high). As natural gas prices languished for many years, the ... » read more | |
| Thursday Dec 9, 2021 | |
| SPP seems to be at the forefront of having too much renewable generation or the simple fact that their transmission infrastructure is not up to par given the influx of wind output over the years. At the end of the day, either component results in the simple fact that renewable wind curtailments exist and in recent months has an upward trajectory that is a bit concerning. Figure 1 | SPP Curtailments – Year on Year Comparison This is evident in the graph above as it represents the manual and re-dispatch curtailments within SPP. Since SPP is tied to mostly wind generation, the graph is represented of the renewable resource as the main component. The illustration is simple, it is a comparison of the curtailments year on year starting in 2018. We reset the volume ... » read more | |
| Wednesday Dec 8, 2021 | |
| While most North American gas price hubs are still waiting for weather to drive some pricing action, western markets are getting winter underway. The Sumas market in the Pacific Northwest, in particular, has been ramping up in recent days and could see some more gains ahead. The brutal flooding thrashing British Columbia has created yet another restriction of gas flows southward into Sumas at the same time that Sumas demand is rising. The spot cash prices there have risen by about 20% from the start of the month on the confluence of some seasonal cold plus upstream supply constraints and intra-market power fundamentals. Figure 1 | Sumas spot cash fixed and basis prices, gas winter-to-date. Over the past couple of weeks, seasonal cold has finally moved into the Pacific ... » read more | |
| Tuesday Dec 7, 2021 | |
| The story for the first six weeks of the winter natural gas withdrawal season has been the lack of heating load across the continent. The month of November averaged only 27 BCF per day which was 2 BCF per day below estimates. The first half of December is expected to average only 31 BCF per day which is 5.5 BCF per day below estimates. The concern was not only the lack of actual space heating demand but the impression from the weather models that the pattern would have staying power through the end of the month. Without December ResCom demand the storage complex would have ample supply through the end of winter. Since the last week of October the Q1 has fallen from $6.06 to only $3.60. Figure 1 | Lower 48 Heating Degree Days - Actual, Forecasted and Climatology But over the past two days ... » read more | |