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| Friday Jun 28, 2019 | |
| It’s the Friday before the 4th of July which means one thing dear blog readers – you will find nothing about the energy markets in today’s issue. Your author of today’s blog is Tim Belden, one of the Principals at EnergyGPS. As has become custom for several years, I will provide you with a recap of my Aluminum Man competition held in Sisters, Oregon last Saturday. Long time readers are familiar with the competition. In fact, a small number of readers claim this annual update is the only reason they subscribe to this blog. The event is called “Aluminum Man” (think aluminum foil) because it is the opposite of an intense event such as Iron Man. The event consists of twelve men competing in a series of ten individual and team events where teams are created ... » read more | |
| Thursday Jun 27, 2019 | |
| While the heavy rain shifted temperatures lower at the end of last week, the weather has begun to heat up as we head into Q3-2019. Looking at Figure 1, we can see that an orange blob has begun to cover the region. In practical terms, averages have climbed into the 80's throughout the southern portion of PJM while more northern regions are still reaching up to the high 70's. Although the weather has not reached near record highs, the warm temperatures will see start to slight the marginal MW higher in the supply stack and start to show market participants how hedged entities with power load are this smmmer. Figure 1 | WSI Northeast Average Temperature Forecast Taking a look at PJM, the market posted a notice on Wednesday alerting participants of upcoming high demand and listed hot ... » read more | |
| Wednesday Jun 26, 2019 | |
| If you live in the Houston metro area, you need to open up your favorite music app and search on Garth Brooks and his song 'Thunder Rolls'. As you start to hear the words and sing along, the refrain portion of the song goes like this 'Thunder Rolls, Thunder Rolls'. As that comes to an end the chorus lines are next in the queue with the opening portion stating 'the thunder rolls and the lightnin strikes, another love grows cold on a sleepless night. As the storm blows out of control, deep in the heart the thunder rolls'. Figure 1 | Garth Brooks - Thunder Rolls The words of the song depict the current weather pattern that has moved through portions of the Lone Star state, specifically Houston, over the past week or so and by gauging the weather forecasts, the ... » read more | |
| Tuesday Jun 25, 2019 | |
| SoCal Gas is the one delivery region that has drawn more attention from the market over the past three years. It goes back farther than that but the real concern started in the aftermath of the Aliso Canyon rupture in 2015. The cavern issues not only highlighted how precarious the SoCal Gas balancing had become without the use of its largest cavern but the sad state of disrepair the entire natural gas system had become across the state. Reliability was the immediate concern but it became much worse as the CPUC enacted rules around the delivery of gas to and from Aliso Canyon that exacerbated the balancing and subsequent pricing mechanisms. No longer could Aliso Canyon be used for normal day to day use despite certification from the states DOGGR engineers. It would only be used in the ... » read more | |
| Monday Jun 24, 2019 | |
| Ever since the middle portion of the month, California temperatures have been moderate at best with both Sacramento and Burbank coming in slightly below average as of late. This has prompted less power demand across the Golden State with the peak load topping the 34 GW mark for a day each week then quickly sliding back down the mountain. Figure 1 | CAISO Peak Power Demand - Daily This in and by itself is quite a bit different than where we stood last year at this time as the state was starting to warm up and eventually give us the hottest month of July on record. When you throw in the fact that the wind generation has been blowing and the in-state hydro is churning out more than 1.1 GWa of generation on a daily basis, you have a grid with plenty of capacity that is not tied to ... » read more | |
| 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 | |