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Thursday Aug 5, 2021   
As we move into the latter half of gas storage injection season, most western markets are sitting on inventories at or above normal levels, with the notable exception of Alberta's AECO market.  SoCal started the injection season with inventories at five-year highs.  From mid-June to mid-July, though, inventories fell below year-ago levels as heat-driven demand rose.  We discussed in a series of flashes such as here and here explaining that more power demand had to be met from sources within the SoCal region due to wildfires in Oregon cutting the ability to import megawatts from the north.  As the lines were restored and SoCal temperatures and demand eased, the past week has seen a reversion to year-on-year surplus.  SoCal inventory builds tend to slow (or even ... » read more
Wednesday Aug 4, 2021   
By Steve Edburg and Tim Belden There was big market design news in the Pacific Northwest this week. BPA issued its “Draft EIM Close-out Letter”. In this letter BPA laid out the rationale for joining the EIM. “At this point, I am proposing that Bonneville joins the EIM in March 2022” states current BPA Administrator John Hairston. While this was the expected outcome, I still have to pinch myself when I think that in less than a year BPA will participate in a (slimmed down version of a) centralized market in the WECC. In classic BPA form, they are joining more than 7 years after Pacificorp made its move in 2014. At this point, it is unclear just how much BPA will participate and what impact its participation may have. Of utmost importance will be the volume of ... » read more
Tuesday Aug 3, 2021   
Late last week Enbridge was given permission by the Pipelines and Hazardous Materials Safety Administration (PHMSA), a group within the Department of Transportation, to operate the Texas Eastern Transmission pipeline at full capacity. This is now the light at the end of the tunnel for the beleaguered pipeline which has seen four ruptures since 2017. In the wake of the last rupture in May of 2020, the PHMSA issued a Corrective Action Order limiting the operation of the pipeline until the repair and full inspection of the pipeline could be completed. It took over a year but not the pipe has been given a clean bill of health. That should allow TETCO to increase flows from the Marcellus production basin down to the Gulf at 2.4 BCF per day. That is 1 BCF per day higher than current ... » read more
Monday Aug 2, 2021   
ERCOT is becoming the melting pot of renewable technology as wind is the anchor tenant while solar generation is making its way to the forefront of the conversation as it matches up well with the hourly peak power demand profile that is represented on the grid.  The final piece to the ERCOT puzzle is being formed as we speak, it is no other than the battery technology.  The path being taken by ERCOT is a bit different than that of California as there is no mandated renewable volume quota being driven by policy, it is more like a standard economic market structure where sending a price signal warrants new build and in the case of ERCOT it has been in the renewable space. Figure 1 | ERCOT Solar Capacity and Generation - Monthly Breakdown From a price and net load standpoint, the ... » read more
Friday Jul 30, 2021   
As we enter the final days of July, the CAISO hydro system is providing the grid with only 1.5 GW as a flat average.  This is 1 GW less than during July in the previous year—which was already lower than the previous several years by 1 to 2.5 GW.  Figure 1 illustrates the differences in generation over time by plotting the average hydro generation in each hour of the day by month.  Hydro is separated into the CAISO categories of “small hydro” and “hydro” in the first two panes, while the bottom pane shows the combined total for all hydro in the system.  Each curve shows a typical generation profile for each year, with differently shaded lines for 2019, 2020, and 2021. Figure 1 | CAISO Small Hydro, Hydro, and Total Hydro Average Hourly ... » read more
Thursday Jul 29, 2021   
This year was expected to be a problem for the California ISO power dispatch. The multi year drought has taken hydro power down to only 1.5 GWa which is a loss of 1.1 GWa from year ago levels. It was widely anticipated that this would happen and that thermal commits within the state would have to make up for the output change. SoCal Gas would have to supply the fuel for this dispatch change and this would thwart any efforts to refill the storage capacity. But because SoCal Gas came out of the winter with an above normal level of inventory and they made adjustments to the pipeline receipts the storage inventory has surprised many by posting near full as of this week.     Figure 1 | SoCal Gas System Pipeline Imports for 2019 - 2021 SoCal Gas has posted a notice ... » read more
Wednesday Jul 28, 2021   
A mini-heat wave this week pushed ERCOT peak-hour load figures up near record highs, but – due to the robust growth of renewables – the market impact from elevated load days just isn’t what it used to be.  For ERCOT’s net thermal records to become at risk will take increasingly larger spikes in loads and/or much sharper interruptions to renewables generation than in years past.  This week put these dynamics on bright display.  A bit of heat made its way into the market.  (Somewhat of a rarity so far this summer-to-date).  The heat was nothing extraordinary, but, given the volume of structural load growth from things like an economic recovery, population growth, and new construction, the loads flirted with monthly record highs.  This is ... » read more
Tuesday Jul 27, 2021   
The South Central is finally getting some heat across Texas and other states along the Gulf Coast.  This means that the hourly power demand profile is moving higher with the later afternoon block of hours riding the steepest point of the curve given the wind dies down substantially when the heat moves in.  The volatility around the increasing wind capacity has been a part of the conversation within an ERCOT conversation for years as the instantaneous price spikes are in play when the supply stack needs to find quick firing generation to replace the lack of wind on a moments notice.  With the introduction of solar capacity over the past few years, the grid operators have a third dimension to account for from both a macro grid level and a micro local area as the transmission ... » read more
Monday Jul 26, 2021   
It seems like years not months since the February situation turned ERCOT's electricity market upside down and left many with more questions than answers.  Most of the conversation around the ERCOT market was reserved for the summer months when power demand was at its peak and the market structure in place wanted to send a high enough price signal to warrant new generation.  Since February 2021's price action was so extreme it actually pushed the ERCOT cap down from the $9,000 level to that of $2,000.  In the middle of June, we saw some of the first heat that drove up electricity demand while the supply side had several units offline for maintenance.  This combination caused the hourly price settles to clear at the new cap level and cause more concerns with the newly ... » read more
Friday Jul 23, 2021   
By Tim Belden https://www.stoketravel.com/stokepedia/how-not-to-die-at-the-running-of-the-bulls/ Renewable procurement by corporates really began to accelerate around 2015. I remember working with corporate clients at that time as they tried to figure out what to buy, where to buy, and when to buy. For several years, PPA pricing dropped each year; buyers without firm deadlines often decided to wait and see. Waiting was a winning strategy. Making things even harder, was that a low wholesale price environment caused negative settlements (i.e., payments) for contracts that had reached commercial operation. It was a bear market! I also advised many developers at that time. The news was not good. We were in a race to the bottom. Pricing was competitive and contract terms were heavily tilted ... » read more
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