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Thursday Mar 14, 2019   
A string of nuclear retirements has swept the East Coast as efficient natural gas facilities continue to outperform nuclear generation on a cost basis. However, many of these generators were able to escape judgment with policies put into place that would keep the units running. Both New York and Illinois passed a Zero Emission Credit (ZEC) that essentially guaranteed the facilities would meet their break even requirement. Connecticut and New Jersey followed suit by also passing subsidies in their own respective states. To subsidize or not to subsidize seems to be the question in Pennsylvania now with the impending retirement of the Three Mile Island Nuclear facility. Figure 1 | The Nuclear Fleet in Question The latest proposal is to add nuclear generators to the Alternative Energy ... » read more
Wednesday Mar 13, 2019   
During the week, the alarm clocks are set for my two teenage children as school is on the docket.  The initial ringtone is heard but there is no movement which then leads to the first snooze alert to make the same noise only to get turned off quickly.  After a couple more snooze alerts, they usually shift their bodies around to where they are actually upright in their beds.  A few minutes pass before their feet finally hit the floor and the ruckus of getting ready for the 'hectic' day of learning (as they tell me) is in full swing.  What gets me sometimes is  there are days when they actually figure out how to get dressed, crawl back into bed and find time to watch some video on YouTube or play some mindless game. Figure 1 | Daylight Saving - Spring ... » read more
Tuesday Mar 12, 2019   
The seasonal nuclear outage season is once again upon us. Over the past two weeks total outages have climbed from 5 to 15 GWa as per the Nuclear Regulatory Commission as plants are taken off the grid for refuel. The refuel operations typically peak at the beginning of May. This year we expect the total to jump close to 20 GWa. As net load recedes and nuclear outages increase there will be a greater propensity of natural gas generation in the dispatch across the Lower 48. The outages typically last five weeks and are staggered by power control area to minimize impact to the grid. The fleet should be back at full capacity prior to the start of the peak cooling months of the summer.   Figure 1 | NRC Nuclear Outage Total for 2015 - 2019 As coal retirements continue to accumulate ... » read more
Monday Mar 11, 2019   
The month of February was quite cold across the entire country with the Midwest, Western Canada and the Pacific Northwest getting hit the hardest. Whenever I called my parents in WI, it seemed to be never ending; the snow, cold temperatures and wind.  It made me recall some childhood memories of always going to the store to stock on food in case it got bad enough to where we had to be in our house for days.  My father would always remind us to make sure we got ice cream as it was a staple in his childhood on the cold winter days growing up in North Dakota. It was not until my college days when the university was shut down for the first time in decades due to a massive snowstorm followed by extreme cold conditions.  I remember walking into the store and telling my friend ... » read more
Friday Mar 8, 2019   
A short issue paper recently released by CAISO on market enhancements being considered for energy storage and distributed energy resources noted that, unlike most dispatch-able resources on the CAISO grid, Nongenerator Resources (NGR) storage systems are not currently subject to restrictions from CAISO's local market power mitigation (LMPM) rules.  CAISO signals in the paper its intent to do so it is Storage/DR Phase IV Initiative. No timeline has yet been released. Some of you are asking, what’s LMPM?  And, others are asking, how have battery storage resources lasted this long in the market without LMPM?  LMPM is a key feature of all centralized power markets to ensure competitive price outcomes, even on parts of the grid that are subject to acute transmission ... » read more
Thursday Mar 7, 2019   
A heavy snowstorm passed through the Northeast to start the week dumping snow across the region. In preparation, school was canceled or delayed opening for districts from West Virginia to Maine. The storm was strong enough to knock down power lines resulting in outages concentrated in New England. We can see the resulting aftermath for Randolf, MA in Figure 1 as a heavy layer of snow covered the entire street. Adding insult to injury, a high pressure system dropped in from Canada causing temperatures to fall significantly below normal. These cold temperatures had the largest repercussions on the power prices throughout the region causing less efficient generation to be brought online. However, we appear to be on the home stretch with temperatures expected to warm up for the over the next ... » read more
Wednesday Mar 6, 2019   
It is hard to believe that over a year ago, the ERCOT grid was losing a pretty big sector of its coal fleet while colder temperatures ran rampant during the month of January and early February 2018.  This led to the cash market volatility as well as the big push upward on the summer implied heat rate curve as many did not know what was going to happen.  As we moved through the summer months, all hands were on deck helping keep the market well supplied as temperatures were above normal and driving the ERCOT load higher.  We saw some price spikes but nothing like the expectations of what was going to happen back in later winter/early spring.  This was due to the fact that Mother Nature delivered the ERCOT footprint with plenty of wind powered generation.  In fact ... » read more
Tuesday Mar 5, 2019   
After experiencing very warm weather last summer the Lower 48 storage complex only accumulated 3.2 TCF of in ground supply. That deficit was highlighted by the EIA South Central region which was entering into the heating season at a 5 year low of only 949 BCF. That was almost 400 BCF below full causing concerns that the region would suffer from a shortfall in supply if it experienced a colder than normal winter. It didn’t take long for the Gulf to get its first below normal shot of the year and the market reacted by running the prompt contract from $3.18 to $4.84 in a matter of two weeks. The price reaction caught the whole market off guard. Economics took over forcing the coal generation across the country to re-enter the dispatch stack shaving almost 3 BCF from the balancing. This ... » read more
Monday Mar 4, 2019   
As far back as I can remember in my energy career, there is always a time within a given month, quarter or year where the words 'The Might Midc' roll off my tongue or is heard in the market.  This past week, as we started a new month (March 2019), the words rang loud and clear across many trading desks as the supply/demand components were aligned for the Midc power markets to move up to the top of the stack.  When this occurs, the main objective is to be on the right side of it or get out of the way knowing that the sky is the limit.   Prior to the start of the March, Mother Nature locked in colder weather from Alberta to the Pacific Northwest via British Columbia. This weather pattern has had a strong hold on the Rescom demand in all three regions, which does not ... » read more
Friday Mar 1, 2019   
For ERCOT, the tight summer 2018 market conditions that lead to significant price spikes and market volatility are projected to be even tighter for summer 2019. ERCOT publishes, on a bi-annual basis, a Capacity, Demand, and Reserves Report (CDR). This report covers ERCOT’s expectations on load growth, existing and planned capacity, as well as calculations for future planning reserve margins (percentage of Total Resource MW above the Firm Load Forecast). The most recent CDR, which came out December 2018, presented an assessment of the projected market conditions for the summer 2019 season. As shown in Figure 1, the planning reserve margin is projected to be at an all-time low of 8.1% for summer 2019. The previous CDR published May 2018 showed a planning reserve margin of 11.0% for ... » read more
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