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Friday Jun 21, 2019   
We at EGPS have already written a couple articles analyzing grid-level batteries (Pomona Battery, How Do Batteries Make Money?). There are many intricacies and interesting outcomes that result from the interactions of batteries and wholesale markets, and we get excited about studying them. In Pomona Battery, we looked at a case study of how a real battery in operation in the CAISO dispatched and generated revenue. In How Do Batteries Make Money, we looked at a higher level of which markets and trading strategies are most profitable. What we have yet to discuss, however, is how to choose where to put a battery, should you be interested in becoming the owner of one. How do you tell if one nodal location is better than another? Is there a simple metric that can lend insight into the relative ... » read more
Thursday Jun 20, 2019   
The fuel mix in PJM has shifted dramatically since new horizontal drilling methods combined with fracking technologies made the Marcellus Shale Basin a viable gas source. While the majority of the low cost fuel flows out of the region, power generators have also taken the opportunity to set up natural gas facilities. This resulted in a continual shift from the legacy coal generation to efficient combined cycle facilities. Although the buildout appears to be far from over, the fuel mix in PJM has continued to shift towards gas generation. Figure 1 | Natural Gas Turbine Looking at the last several years, we can see that thermal generation has continued to shift more towards gas generation. Figure 2 shows the percent of thermal output (coal and gas) derived from gas facilities. We can see ... » read more
Wednesday Jun 19, 2019   
Over the weekend, I drove through the Columbia Gorge on my way to Boise, Idaho for my son's Regional soccer tournament.  It was an enjoyable trip as I had my daughter in the front seat with three players in the back as my vehicle was the floater as the 15 person van could only hold 14 players and the coach as a driver.  As we got out of Portland and headed east, my excitement was real as I knew what was in front of us, which was three hydro dams, several wind turbines and a portion of the Snake River that us talked about throughout the water year. My daughter had a clue what was in store as she has been to Bonneville Dam with me before and has been lectured on how the facility works as well as taking the tour of the powerhouses on both the Oregon and Washington side.  ... » read more
Monday Jun 17, 2019   
This past week, EnergyGPS presented at a conference up in Seattle where the focus was on the new technologies needed to keep the grid sustainable as Renewables, Carbon and Retirements all come into play. in fact, it was only last week when Pacificorp announced it was going to move up the retirement of two Colstrip units to the end of the current calendar year.  Down in California, the discussion surround the solar profile and what impact it is having on the hourly price signal in the marketplace.   It was not more than a week ago when the CAISO real-time price screamed higher as the power demand on the grid saw a massive ramp up between the midday period and the evening ramp.  In fact, there were days when the grid needed to find over 11 GW of power supply from the ... » read more
Friday Jun 14, 2019   
When I was young, I don’t remember being asked this question.  The scoop of ice cream I was handed was on a “cake” cone.  At some point, I was given a choice: “cake” or “sugar”?  (Why the former cone was called “cake”, rather than “cardboard”, I do not know.)  When the super premium ice creams appeared, many ice cream parlors started making “hand made” waffle cones, always with an up-charge.  They smelled delicious and looked tasty, but I usually stayed with the sugar cone, as it was sweet and did not cost extra. I’ve been in the energy analysis business long enough now that when I think of “cone”, my mind also goes to "CONE": the Cost of New Entry. CONE is a ... » read more
Wednesday Jun 12, 2019   
While nuclear subsidies continue to make headlines, power markets across the Northeast are still seeing retirements of nuclear generators. The latest in the string of retirements is the retirement at the Pilgrim nuclear facility that dropped off the grid with the commencement of June. This facility helped provide power to New England. Similar to the other retirements, the generating station only had one unit causing it to become uneconomic without the ability to combine overhead like some of the other multi-unit facilities. However, the recently lost capacity is expected to be replaced by the Bridgeport Station combined cycle (485 MWs) expected to come online this month. Figure 1 | Pilgrim Nuclear Station Taking a look at the real time fuel mix, we can see that Pilgrim began to ramp off ... » read more
Tuesday Jun 11, 2019   
There has been a radical change in the Lower 48 natural gas balancing since the beginning of the injection season. The EIA storage inventory has moved from a 228 BCF deficit to now a 182 BCF surplus and we are not even half way through the injection season. That flip in storage inventory has taken all fear out of the ability to fill the natural gas storage complex prior to the start of next winter. As a result the Q1 2020 NYMEX futures have drifted down from $3.04 at the beginning of April to now a settle of $2.74. The bearish benchmark NYMEX action has sent ripples throughout the country with fixed price basis following suit. There is one area that is not enjoying the price slide. Following record cold, a boost in native gas demand and ongoing system maintenance Alberta continues to ... » read more
Monday Jun 10, 2019   
Mother Nature has full control on how the energy markets play out as she can turn up the heat in the summer as well as blow arctic air down from the North to create what has been labeled as a 'Polar Vortex'.  She can also flip things around and deliver below normal temperatures in the summer and above normal levels in the winter session.  On top of if all, Mother Nature brings precipitation to regions in form of rainfall and/or snowpack.  Not a day goes by without talking about the impact weather is having on the grid, so recent times are no different.  In this week's Newsletter Article titled 'Champion of the Energy Sector', we took a look at how the weather pattern as of late has impacted the overall natural gas grid. In the article, we dove into the detail ... » read more
Friday Jun 7, 2019   
Energy markets are full of duplicative or confusing names, or at least in the west they are. For example, the transmission line connecting the Pacific Northwest to Northern California is called variously: Paci, the AC intertie, Path 65, COI, Malin500, among other names. While all of these names refer to the same general set of wires, the precise way those wires are being considered varies based on the different names, sometimes in significant ways. This issue doesn’t just apply to transmission lines from the Northwest to California. Palo Verde is another example of the issue. Palo Verde could refer to a 3.5 GW nuclear plant in Arizona, a transmission line running from the aforementioned plant to Southern California, a pricing node within the CAISO model, or a bilateral trading hub ... » read more
Thursday Jun 6, 2019   
The state of Ohio is now considering adding legislation that will subsidize the nuclear fleet which would go into effect in 2021. Four nuclear subsidies are already in place in Illinois, Connecticut, New York, and New Jersey with a fifth currently being considered in Pennsylvania. These subsidies generally create a price collar for the nuclear fleet keeping the facilities at their economic break even after all is said and done. However, the Ohio legislation, known as HB 6, is slightly different with the ratepayer fee poised to replace existing charges for renewable generation and peak demand reduction. Figure 1 | Davis-Besse Nuclear Generator The bill would add at least $1 to ratepayer’s monthly charges and grow depending on the customer’s classification. It would also ... » read more
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