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Wednesday Nov 6, 2019   
As we start to move into the heart of winter, I thought it would be worthwhile to step back and take a look at how the renewable profiles in ERCOT are shaking out in Q4.  As we have documented in other blogs, articles and monthly reports, ERCOT is the front-runner when it comes to wind penetration across North America.  On the solar front, nobody can compete with California's drastic increase but going from nothing to something is always a start.  With the forward natural gas curve catching a bit of a bid in the market the past couple of weeks, the focus moving forward will be on how much new capacity will get added over the course of the next 6-7 weeks as an end of the year rush could be in order. Figure 1 | ERCOT Monthly Wind Breakdown You can see in the top pane in the ... » read more
Tuesday Nov 5, 2019   
The Lower 48 natural gas production has recently moved to a new high of 95.4 BCF. That is up 6.6 BCF from last year with a good portion of the gains coming as a by product of the crude production stream in the Permian Basin. Because the infrastructure in the Permian is mainly dedicated to the crude industry, natural gas volumes are particularly sensitive to weather shocks. The most recent polar event underscores how vulnerable the basin is to freezing temperatures. Noting we are at the beginning of the heating season there are more cold events on the way which will ignite volatility for Texas gas markets.     Figure 1 | Lower 48 Production Volume In the past three weeks we have seen two distinct temperature events throughout the Midcontinent. Each had a negative effect on ... » read more
Monday Nov 4, 2019   
For some time now, we have been discussing the power demand profile within CAISO's footprint as the renewable mandate over the years has netted what we consider a double hump profile.  The double hump occurs since most of the new renewable capacity comes in the form of both behind the meter solar and utility-scaled facilities integrated into the grid's daily supply/demand balance. Figure 1 | CAISO Net Load Profile - Hourly Actuals and Forecast The red lines in the graph above represent the power demand tied to the consumers of power on an hourly basis while the bright blue at the bottom is the wind generation hitting the grid while the faded orange is what gets generated by the sun (solar).  The former is volatile on a daily basis while the latter represents the utility-scaled ... » read more
Friday Nov 1, 2019   
If you have been in the electricity sector for some time, there are several revolving concepts and topics that always seem to pop up for discussion and/or debate depending on the time of year or circumstances around a specific market.  One of those topics is the 'Capacity Market' within each ISO and RTO sector across all of North America. At the end of the day, this hot topic serves as a foundation to what most would consider reliability to the power grid.  As stated, each market acts a little differently depending on the governing body and policy makers tied to the specific electricity balancing authority.  The discussion have takend several turns over the years with PJM being the pioneer over the years.  While other ISO's have been formed since the inception of ... » read more
Thursday Oct 31, 2019   
If you have every been to Phoenix there is a good chance you have seen Camelback Mountain as it is within the spawling metropolis in the desert.  If you were there for vacation some might have even stayed at the resort that sits at the bottom of the mountain while others just decided to hike up to the top to get a glimpse of the city and surrounding area.  It is a gorgous view at any time of day but the early morning to me is the best time as the city is just waking up and it is not too hot. Figure 1 | Camelback Mountain - Phoenix, AZ The reason for this introduction theme for the newsletter is that it ties in with the camelback demand profile terminology used in the power sector when the morning and evening ramp net load is much higher than the middle of the day ... » read more
Wednesday Oct 30, 2019   
There are certain times of the year in the Pacific Northwest that crabbing on the coast is worth the drive in October, November or December  It is a time where you can get all bundled up in your rain gear or waterproof high water boots as you make the journey into the bays that are deemed the best crab fishing east of the Mississippi. Figure 1 | Oregon Crab On my way home from work yesterday, I was listening to the local sports radio show and that is when I learned of another type of 'crabbing' that took place in Oregon yesterday.  Like any good radio show, they would lead into the capture of the discussion minutes before and then break for a commercial.  The head person started out by saying there was some crabbing at the airport yesterday so the co-anchor thought there ... » read more
Tuesday Oct 29, 2019   
SoCal Gas can finally start wiping the mud off its face. For the past four years the utility has been under fire due to a number of infrastructure issues that have plagued its system. The ruptures at the Aliso Canyon storage cavern and the 235-2 pipeline outside of Bakersfield forced the utility to cut back on system pressures. This safety measure put service reliability at risk. Now after years of public humiliation, the utility has turned the corner. Restoration has now been finished on several pipes in the north part of their system and they are starting to return pressures. Aliso Canyon has also been deemed safe to operate and should see increased use this winter as a source of in ground supply. The hard work and efforts by SoCal Gas employees to overcome these hurdles should garner ... » read more
Monday Oct 28, 2019   
With the Pacific Northwest overnight lows dropping this week, all eyes will be on the power and natural gas markets as the former still is exposed to electric baseboard heating demand as well as other power resources such as space heaters to warm up the space.  The latter is looking at restrictions at the T-South compressor that have been in play all month.  The current flows out at the top of the system have been sitting around the 1.25 BCF/d mark in recent days with roughly .65 BCF/d making its way into the Pacific Northwest via the Sumas compressor (which connects the Westcoast and Northwest Pipelines).  With moderate rescom demand this past week and ample power burns, this was still enough to not pull from Jackson Prairie as long as the .52 BCF still moved from the ... » read more
Friday Oct 25, 2019   
Over the past year, the Pacific Northwest natural gas market has been on it's tippy-toes as the 36 inch Enbridge pipeline explosion rocked Shelley, BC last October.  Since that time, the T-South compressor flows have been the focal point as it is the main artery to getting gas down to Vancouver, BC and ultimately into the Pacific Northwest via the Sumas Compressor.  We track these flows in our BC to PNW Natural Gas Balance dashboard in a daily basis as it gives us a good proxy to where the pinch point have been, will be and what to expect as in the coming days. Figure 1 | BC to PNW Pipeline Balance Summary Over the past year, we have seen the Sumas gas hub cash market explode at times when there were not enough molecules to go around for rescom, industrial and power ... » read more
Thursday Oct 24, 2019   
The nuclear bailout plan in Ohio doesn’t appear to be going anywhere soon. It is the latest in a long line of nuclear subsidies that have kept uneconomic generation running throughout the East and Midwest. The rival group, Ohioans Against Corporate Bailouts (OACB), attempted to put the legislation on the 2020 ballot but was unable to obtain the necessary signatures. Figure 1 | Davis-Besse Nuclear Facility Outside Toledo While other plans also faced challenges, the Ohio bill was the most strongly opposed. Unlike other nuclear subsidies that have gone into effect recently, the bill that was passed in Ohio also includes a subsidy towards coal generation. The law was initially proposed under the guise of reducing carbon and increasing air quality. However, later amendments lumped coal ... » read more
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