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Thursday Sep 19, 2019   
Renewables have been a long time coming throughout the PJM footprint. While wind generation made an appearance throughout the West, total renewables still only represent a sliver of total capacity in the ISO. The tide appears to be turning over the next four years with the interconnection queue showing a large ramp in renewable capacity. Contrary to the previous wind buildout, the new renewable capacity appears to be largely composed of solar generation. Figure 1 | Sunny Weather Renewable capacity additions appear to rocket up with over 40 GWs of generation in the queue. Solar generation composes the majority of new renewables with over 35 GWs throughout the same time period. Wind generation, by comparison, is just a fraction of this with less than 5 GWs in the queue. Storage is also ... » read more
Wednesday Sep 18, 2019   
If we were in the months of October/November, the corner street drains would be filled with massive amounts of water as the leaves from the trees would not have been swept away yet.  If this was December, the conversation woud be around the Bonneville tailwater levels being quite high as the fish eggs are being laid and details around the impact of the river system as we move further into the water year.  The reality of the situation is we are now in the middle of September and it has been one of the wettest on record with 14 days to go and a forecast calling for more rain. Figure 1 | The streets of Portland and the rain I thought it would be good to give everyone not living in the beautiful Pacific Northwest a glimpse of what has transpired. First, it has been a record ... » read more
Tuesday Sep 17, 2019   
The weekend's attack on the Saudi oil infrastructure helped lift the NYMEX crude contract to $62.90. The 11% move in the NYMEX CL contract was enough to garner some sympathy from the natural gas market. NYMEX HH ended up the day 6 cents higher settling at $2.68. But this run on natural gas started almost a month ago. Since the last week of August the prompt continuous has risen from $2.13. This rally has been all from strength in the near term. There are two main factors that are supporting the strength.  Figure 1 | Q1 and Prompt NYMEX Futures and Henry Hub Cash As we near the end of the storage injection period, the South Central Salt facilities are now rushing to fill the caverns. From the middle of March to the end of June, the salt storage caverns injected 130 BCF taking ... » read more
Monday Sep 16, 2019   
Friday the 13th is always a special occassion as the superstitions are plentiful and who's to say that if you are into the tradition, sitting down and watching all the Friday the 13th movies is not out of the question.  This past Friday was unique as there was also a full moon present.  The last time something like this happened, it was in the fall of 2000.  Scientists have stated over the years that such an occurance happens on average every 20 years or so.  The forecast is for the next to take a little longer (30 years) as many in the research community have it pegged for 2049.  That seems a long way off but the rarity of such a day got me to think about how far we have come since the last Friday the 13th Full Moom and where the energy markets might be when the ... » read more
Friday Sep 13, 2019   
Earlier this week I spent a few days at the annual NIPPC conference at the Alderbrook Lodge located on the beautiful Hood Canal near Washington’s Olympic Mountains. NIPPC stands for “Northwest and Intermountain Power Producers Coalition – a trade association whose membership is primarily comprised of a handful of merchant natural gas generators, wind owners, and renewable project developers. Before diving into some of the conference highlights, I want to mention NIPPC’s long-time executive director, Bob Kahn, who passed away in August after a brief and intense battle with non Hodgkins lymphoma. Bob’s vision and leadership have contributed immensely to the policy debates in Northwest energy circles. He was a strong voice for competitive markets and understood ... » read more
Thursday Sep 12, 2019   
New England has been dependent on gas generation to supply a majority of its electrical needs for a long time. The region relies on the Algonquin Pipeline to supply cheap natural gas to facilities in the region, but this lifeline has continued to be subject to capacity constraints with prices skyrocketing when it binds. However, the grid has decided it is time for a change. The latest state of the grid presentation reported that the ISO will continue to try and shift away from natural gas generation towards renewables with an emphasis on distributed supply. Figure 1, taken from the state of the grid presentation, shows how the market expects this to play out. Figure 1 | Shifting Resources from State of the Grid ISONE While Figure 1 displays two changes happening simultaneously, both of ... » read more
Wednesday Sep 11, 2019   
Now that we are getting deeper into the month of September, it is time to put an end to the current water year in the West, one of which saw the Pacific Northwest have some massive swings when it comes to the overall snowpack in the mountains and where it was actually located.  This not that uncommon as the region is quite large and depending on the jet stream pattern and how Mother Nature wants to sprinkle some cooler weather on specific basins helps determine how the water year shakes out.  Down in California, there was a time where the water was so scarce that the irrigation rights were in debate over the operations of the dams producing power.  In 2017, such debates were pushed to the side as the state saw record precipitation (in the form of snow and plenty of ... » read more
Tuesday Sep 10, 2019   
The James River corridor is the critical supply path from British Columbia into the Alberta gas distribution system. That path has been under maintenance for most of the summer causing the production contribution into the NGTL system to fall from 11 to 10.2 BCF per day. Nova has now extended the outages through the end of the injection season. After November 1 the rating on the corridor will increase to 11.7 BCF which should provide ample supply for the winter. The problem is that because of the ongoing restrictions, the NGTL system has not been able to inject into storage. The caverns are now at a 74 BCF deficit to last year.    Figure 1 | Alberta Natural Gas Storage inventory The current in ground supply stands at 255 BCF which is a 75 BCF deficit to last year. This is ... » read more
Monday Sep 9, 2019   
The first full week of September 2019 was full of excitement in the West as temperatures in Southern California hit the summer highs (on average) while the Desert Southwest saw a couple of unplanned outage change its thermal supply stack.  When you throw in the fact that California has some transmission constraints that locked down the overall capacity that could flow north to south on Path 15 and SoCal Gas was experiencing maintenance work at Topack, we had ourselves a mini-perfect storm.  In fact, the power supply stack marginal megawatt was shifting too the right and crossing over several inflection points to warrant some the highest prices we have seen all summer. Now the $78.91 day-ahead high print was prompted by the previous day's uptick to $91.14 with a high water mark ... » read more
Friday Sep 6, 2019   
Waiting for regionalization of energy markets sometimes feels like waiting for an earthquake.  You’re told that the big change is coming—just around the corner--only to have years go by where nothing appears to happen.   Occasionally there is a tremor, like when earlier proposals RTOs were made--and then withdrawn--or when California considered for a hot minute about sharing control of its ISO with its western neighbors.     But, maybe, regionalization in the west is more like watching the tide come in: harder to discern but apparent over time via a series of incremental waves.  The Western Energy Imbalance Market (EIM) has now been operating for five years and participation has increased every year.  Progress may not be inexorable, but ... » read more
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