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| Tuesday Sep 4, 2018 | |
| The 'Dog Days of Summer' are behind us as August rolled off and September is off to a 'Laborious' start. Out West there is a storm brewing that we discussed on our latest EnergyGPS Gold Package Newsletter Article titled, 'Now There are Two'. The storm is tied to the current SoCal and PGAE storage levels and what could be in storage over the next two months and as we head into winter. Ever since the Aliso Canyon leak and the reduced transport capacity into the SoCal Gas's system, SoCal Citygate has become the most volatile trading hub in the cash market. If you recall, it was back in July (24th) when we saw the cash hub price trade just under $40.00 coming out of a weekend full of Low OFO critical notice postings. This was the heart of summer with ... » read more | |
| Friday Aug 31, 2018 | |
| Last week Lawrence Berkeley National Labs published its 2017 Wind Technologies Market Report. I look forward to reading this publication each year. It is chock full of interesting graphs and data covering everything from turbine costs, geographic distribution of turbine manufacturing, length of turbine blades, capacity factors, installation trends, and market pricing. Based almost entirely on publicly available data, it is an impressive and comprehensive tome. There were two images in the report that particularly caught my attention. The first showed what wind actual wind production was worth in each market in 2017. Figure 1 below shows these results. Figure 1 | 2017 Wholesale Revenue for Wind in Different Markets LBNL Note: Price comparisons shown are far from perfect – see full ... » read more | |
| Thursday Aug 30, 2018 | |
| As we made our way out of the dog days of summer, Mother Nature made it clear she wasn’t done with us just yet. A high pressure system blew into the Northeast causing the hottest weather of the summer to enter the region. This drove daytime highs into the 90s as far north as Maine. If you were fortunate enough to have AC, it was cranked to the max setting. The power market also felt the heat as load in ISONE climbed to the highest levels so far this year. The market saw the heat wave in advance which kept outages at less than 1 GWa with generation doing its best to be available. However, the gas stack was not quite enough to supply the market. Looking at Figure 1, we can see fuel oil ramped into the market to solve peak demand on the 28th. Coal generation also appears to have ramped ... » read more | |
| Wednesday Aug 29, 2018 | |
| With everything that has been going on in California this summer and the anticipation of ERCOT blowing up in July and August, SPP has been the forgotten market. In today's newsletter we take a look at what has been happening from a supply demand standpoint over the past week or so and how the renewable picture has shaped up this summer. To start things off, let us take a look at the daily net load to hourly implied heat rate graph for SPP South Hub. Figure 1 | SPP Net Load and South Hub Implied Day-Ahead Implied Heat Rates - Hourly The x-axis represents the hours broken down by day while the left y-axis is in GW while the right y-axis is the implied heat rate. The red line represents the power load forecast/actuals while the darker shaded blue is the wind ... » read more | |
| Tuesday Aug 28, 2018 | |
| Late last week FERC posted a notice that they have approved Rover Pipeline’s request to add an additional two laterals to the mainline receipt point that transports volumes Northwest into Michigan. The Majorsville and Burgettstown additions will bring an additional .8 BCF out of West Virginia taking total flows on the Rover Pipeline from 2.1 to 2.9 BCF. On Friday, Energy Transfer, the owner/operator of the pipe posted a notice that the pipeline would be capable of moving gas as early as this weekend. Firm subscriptions are expected to start on September 1 guaranteeing full flow of the expansions in just a few days. Beyond this coming jump in capacity, there are still .45 BCF of additional laterals in the works that will complete the 3.25 BCF per day design of Rover. Those are ... » read more | |
| Monday Aug 27, 2018 | |
| The last few days of August are upon us, which symbolizes the end of summer for many as they head back to school. In Texas, the end of August gets a big sigh of relief from the system operators at ERCOT as it is typically the one month where the grid gets tight due to warm temperatures, unplanned outages and other variables in the marketplace. The anticipation to this year was big as several coal units retired back in Q1, thus the supply stack has had to lean on the natural gas fired generation, the hope of wind showing up during the later afternoon hours and any type of demand side management tied to the loads on the grid. Figure 1 | ERCOT's Net Load Year on Year Comparison - 7 Day Rolling Average Starting with the first item on the list, natural gas fired generation. ... » read more | |
| Friday Aug 24, 2018 | |
| This week the EPA proposed to replace the Clean Power Plan (CPP) with the Affordable Clean Energy (ACE) rule. Unveiled by the Obama Administration in 2015, the CPP would have required states to develop plans to meet state-specific emission reduction targets. The EPA analyzed the power sector in each state and developed what the EPA considered to be an achievable path to carbon reductions. Each state had its own bespoke limit. Since the CPP was rolled out by the Obama administration, it has been mired in lawsuits and was ultimately put on hold when Trump came into office. While I am a fan of using market mechanisms to put a price on carbon, the CPP was a pretty convoluted way of doing it. The reason for the CPP’s convoluted structure stems from the fact that the CPP is the child of ... » read more | |
| Thursday Aug 23, 2018 | |
| The recent CPV Towantic and Footprint combined cycle power plants were added to the ISONE grid as we moved into the third quarter (Q3). With the region seeing one of the hottest summers in recent history, it’s a good thing the additional capacity was available. Both units ramped into the market at the start of July as soon as the first major heat wave hit. The combination of these additional plants with a slight increase of approximately 60 mmcf/d of capacity along the Stony Point Compressor compared with last year kept the marginal megawatt in the South more frequently than would have been possible otherwise. Looking at the regional generation in ISONE available on our Zonal Generation tool shown in Figure 1, we can see that Southern output remained at higher levels ... » read more | |
| Wednesday Aug 22, 2018 | |
| You swing across every ISO nowadays and there are two common themes that really impact the real-time grid when it comes to balancing which in turn can be reflected in price. When the grid is short, the grid operators are looking for some sort of supply to ramp up so the supply equals the demand. On extreme cases, which we saw on certain days/hours during the month of July in ERCOT, the price action skyrockets as the grid moves into what is known as scarcity pricing. This usually lasts for a couple of hours depending on the circumstances tied to the power demand profile as well as what is going on with the generation stack. When the grid is long, the reverse needs to happen as the grid operators are trying to send a price signal for generation to actually reduce ... » read more | |
| Tuesday Aug 21, 2018 | |
| The NGTL gas system in Alberta has been under stress all summer. Maintenance and construction outages continue to plague the region causing havoc for exports and storage injections leaving few avenues for balancing. That has resulted in a very volatile cash dynamic. This week we saw another episode where the delivery issues on the system forced the cash market to index $0.44 with some trades coming in much lower at the end of the trading period. The index itself is off from $1.00 print seen for the Friday prior to the weekend. The culprit is another string of restrictions in the Northern Delivery Zone. Figure 1 | AECO Cash Prices for Apr - Aug 2018 In previous low price events, we have seen natural gas generation as well as imports come to save the day. » read more | |
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