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Wednesday Mar 23, 2022   
Back in February, we wrote about the potential impact of the ORDC rule changes on prices in ERCOT. The article or blog will provide more useful context, but in brief: the ORDC is ERCOT’s scarcity pricing mechanism. Following Uri, the PUCT made a couple of changes to the way the ORDC is calculated. We fed the changes into the ORDC calculation methodology published by ERCOT, and developed a “simplified” ORDC curve based on the new rules. Our conclusion at the time was that “the changes in ORDC calculation create the opportunity for more price spikes of a lower magnitude than have occurred historically.” So, is this playing out? We don’t have a ton of data yet to compare: February of last year is somewhat of an outlier, and March of this year isn’t ... » read more
Tuesday Mar 22, 2022   
For readers of EGPS’ Canadian Energy reports, the phrase “Alberta wind set or will set a new all-time record” has progressively lost its luster by virtue of being repeated so frequently.   This past Sunday, the latest high-water mark was set again when hourly wind topped 1.97 GW.  Compared to a market like ERCOT, about 2 GW of wind may not seem like a lot.  But in AESO, that can account for 20% of load on days like will be seen this week.  AESO’s big wind days are to stay in effect into Thursday, but then take a hiatus that could be rather steep.  The pattern AESO wind will follow over the next seven days will provide a good demonstration of what may be expected over the transition from Q1 to Q2: generally waning wind strength ... » read more
Monday Mar 21, 2022   
The single biggest change in grid operations for Texas over the past year has been the doubling of solar capacity installations. Each month more output is coming online and the total capacity is expected to break 13 GWa by June, according to the EIA. That puts the total output on par with California and should have Texas become the nation's leader in solar energy by the end of the summer. The state is not going to stop there. By the end of 2024 Texas is expected to have 24 GWa of installed solar capacity on the ERCOT grid. Hopefully they will learn some lessons from the California integration struggles. As the solar footprint grows, so does the problems with managing the intermittent qualities of the generation. Having such a large portion of the overall generation profile ... » read more
Friday Mar 18, 2022   
Global LNG forward prices are backing away from recent record highs, and U.S. terminal maintenance season could be getting underway.  Yet, more capacity to export from new terminals and spreads that still remain unquestionably profitable indicate U.S. LNG exports should rip this summer. Over the past several weeks, our EGPS LNG and EU Storage reports have spent a good amount of time discussing the extraordinary volatility of global forward prices.  LNG forward prices have softened a bit from the record highs set at the start of the month, when concerns about global energy markets were ignited upon Russia’s invasion of Ukraine.  The average prices of Europe’s NBP gas hub’s Summer ‘22 strip topped out at an astonishing $49.39 on March ... » read more
Thursday Mar 17, 2022   
Wind has been plentiful over the past week in SPP, with wind generation reaching close to 20 GW at points on each of the past four days.  With temperatures rising throughout the region starting around the same time and translating into lower overall demand, the result has been a familiar one to those who follow SPP—net loads of 5 GW or lower, lots of curtailed wind, and SPP Hub prices sitting below zero for hours at a time. Figure 1 | SPP Net Load – Actual and Forecast The figure below shows the SPP North day-ahead LMP for Wednesday the 16th as well as for today in the yellow and blue lines, respectively.  Starting at midnight and lasting until the mid-to-late morning prices remain well below $0 and they dip below negative again at the very end of the day both today ... » read more
Wednesday Mar 16, 2022   
Springtime is moving into Texas.  Bluebonnets are already starting to appear on some roadsides; baseball programs are starting their early season workouts; and the beaches of Padre Island are starting to fill in with the untanned pates of spring breakers. Figure 1 | The Lupinus Texensis is a surefire sign that spring has arrived in Texas. The warming weather brings a bearish weight to the ERCOT power market by diminishing loads.  As Texans emerge from their winter cocoons to spend more time outside and the temperatures warm power demand wanes as less electricity is needed to heat and light homes.  We have discussed at length that ERCOT’s weather-normalized loads have been posting impressive growth rates over the past couple of years, but within the course of a year ... » read more
Tuesday Mar 15, 2022   
March is typically the month when the natural gas market shifts its focus on demand drivers. Residential/Commercial heating load , which is largely a product of weather, gives way to power burn demand from electric generation as cooling demand ramps up in the southern latitudes. The population turns off furnaces and turns on the air conditioning. It is appropriate at this time to look at some of the year on year changes we are seeing across the Lower 48 with respect to the power grid dispatch to determine the level of power burns we could expect this summer. The best way to accomplish this is to look at electric demand minus the impact of renewables generation to the grid. This would then provide a glimpse of the thermal commit needed to meet the balancing requirements.  In ... » read more
Monday Mar 14, 2022   
California continues to show its hand of having too much supply hitting the grid, especially on the weekends when the power demand is shifting lower as businesses are not operating like they tend to do during the week.  As a result, the CAISO system operators are at their seats edge each hour as they wonder what the wind generation, imports and actual loads will look like as the only option they have is to curtail renewable energy in the form of solar.  We have discussed the renewable penetration tied to the solar fleet, both behind the meter and utility scaled facilities over the years. Figure 1 | CAISO Solar Capacity Breakdown by Month We have also touched on the influx of battery capacity that has hit the grid over the past year, to which is now penetrating the real-time ... » read more
Friday Mar 11, 2022   
From time to time, we read and report on articles and publications from the Lawrence Berkeley National Laboratory (LBL). Recently, they published a paper regarding surface wind observations and their relationship to interannual variation in wind energy output. As usual, their work contains great analysis and insights. At Energy GPS, we tend to get deep into the weeds of specific regions or projects, so it’s always useful to take a step back and read work like this that examines nationwide energy trends. In the case of the paper referenced, the wind speed component was highlighted and worth discussing in today's blog.  One factor that makes wind speed and power analysis difficult is that the observation stations often aren’t located at the center of the wind power plant. » read more
Thursday Mar 10, 2022   
Daylight savings time is the practice of setting the clock forward by one hour so there is longer daylight during the evening period when everyone is still operating in a productive manner.  Some areas do not observe such as Arizona or Hawaii.  There is always conversation of doing away with the change and keeping the spring-forward mindset all year round.  Figure 1 | Daylight Savings Time Adjustment From an energy standpoint, the change impacts the grid in a way that the demand profile shifts a bit with another hour of higher volume showing up in the evening ramp while the morning period stays a bit darker until the official start of summer rolls into the conversation as the overall daylight period stretches outward.  Another impact is with the renewable solar ... » read more
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