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Tuesday Jun 20, 2023   
Texas has carried the motto ‘bigger is better’ for years as its outdoor BBQ festivities cannot be matched, the oil industry speaks for itself, and the electricity grid operation stands on its own to this day.  Each one of these components has been tested over time but to this day the slogan still stands. Figure 1 | Texas Bigger is Better Prior to Storm Uri, the electricity operator (known as ERCOT) stood at the top of the mountain when it came to sending a price signal to initiate new build to work its way on the grid. In fact, the price cap of $9,000 was a welcome sight come the summer months when the heat moved in and power demand rose to levels that would once stretch the thermal stack to the cap limit.  With the evolution of renewables and coal retirements, the ... » read more
Monday Jun 19, 2023   
Every four years, athletes from around the world gather to compete at the highest level in events that are tied to summer and winter sports, such as track and field, skiing, bobsledding, figure skating and basketball to name a few.  The lighting of the Olympic torch symbolizes the start of a two week stretch where competition is fierce, and medals are handed out to the top three athletes in each individual event and medals for the top three teams when pertinent.  The lighting of the torch also carries an Olympic slogan where the words ‘let the games begin’ ring through the television announcer’s voice.  Figure 1 | Let the Games/Heat Begin The energy sector does not have to wait every four years for a competitive environment between Mother Nature and the ... » read more
Friday Jun 16, 2023   
Energy GPS has been reporting about how Washington’s Cap-and-Invest program began in 2023 with tight supplies (low cap) and strong prices. The first auction cleared $48.50 per allowance (one allowance covers one metric ton of CO2e emissions) and the bilateral market traded as high as $72 per allowance before settling into a range in the mid $60s. The Department of Ecology recently ran a second auction where the price cleared at $56.01 per allowance, up from the last auction but still below the bilateral price. Energy GPS has been modeling the Washington carbon market for the last 9 months. Our estimates show covered emissions will be well in excess of available allowances in any given year and in for the first Compliance Period (2023 to 2026). Stated simply, demand for allowances ... » read more
Thursday Jun 15, 2023   
The biggest story coming out of the region, known as the South Central, this spring has been the absence of wind generation within SPP and ERCOT.  The former continues to lead the country from a wind capacity vs. power demand ration while the latter is the front-runner in total capacity so when Mother Nature delivers a weather pattern that knocks out the power generation from the wind turbines, it has an impact on the overall net load; to which the system operators must balance daily. Figure 1 | SPP Wind Generation – Gone but NOT Missing  We put the spotlight on SPP in our latest Newsletter Special Report, “Missing in Action—SPP Wind?”, as there is a lot to pull on as Q2-2023 is coming to an end and Q3 is right around the corner.  With every ISO, we ... » read more
Wednesday Jun 14, 2023   
The cap for Alberta power pool prices is $1000/MWh. When this price is reached, it signals all hands on deck because the supply is desperately needed, and all available plants should be running. Over the last 12 days, Alberta has reached the cap twice. The first time was last Wednesday when an emergency alert level 3 was issued, signaling that load would need to be shed imminently. The second time was on Monday when wind dropped to less than 100 MW and demand stretched to 10.9 GW. Several other days in this time span of less than two weeks experienced high prices as well with price peaks up to $900/MWh. Figure 1 | Alberta Hourly Breakdown (June 2nd – June 12th) While high springtime demand contributed to the problems in AESO as high temperatures reached into the 80s, this was ... » read more
Tuesday Jun 13, 2023   
Texas is looking at its warmest temperatures of the spring as the central part of the state (Austin/San Antonio) is tapping triple digits starting today/tomorrow and holding the pattern through the weekend.  Both Dallas and Houston are not too far behind with the former in the low/mid 90’s while the latter matches the level mentioned along with its increasing humidity. Figure 1 | Texas Temperatures – Daily Average From a power perspective, the warmer temperatures are delivering strong demand with the later afternoon and evening ramp periods are escalating fast.  In fact, the forecast shows the peak demand tallying 82.7 GW by the 16th with the heavy load average reaching 66.0 GW.  Anchoring today as a comparison, we are looking at the peak increasing by 8.1 GW ... » read more
Monday Jun 12, 2023   
The energy space continues to present opportunities across North America as natural gas continues down the path of higher production volume and molecules being placed into storage.  On the electricity side of the equation, we have the lever known as power burns that are derived from renewables netting out the demand across the grid along with being the balancing component when max storage injections are being met in the spring/early summer. Figure 1 | Lower 48 Natural Gas Storage Level – EIA The daily conversation is around the market fundamentals while the weekly/monthly discussions detail what is on the horizon when it comes to structural changes tied to regulatory/policy decisions centered around a specific commission or at the state/federal level.  The changes apply ... » read more
Thursday Jun 8, 2023   
Our neighbors to the North have found themselves in the news more than they would probably like in recent days thanks to heat and wildfires that are causing reverberations across both Canada and the United States.  Alberta is in the middle of a warm streak with temperatures into the 80s, which prompted wildfires across the region earlier this month. As of Sunday, the state of emergency was lifted as most of the fires were under control, but the warmth remains and is heating up the AESO energy markets.  Unfortunately, on the other side of the country the wildfires situation is less controlled, as our readers along the East coast and around the Great Lakes can attest by looking out their windows.  Smoke from these Canadian wildfires is spreading over much of North America ... » read more
Wednesday Jun 7, 2023   
After a flashy commercial with speeding cars down long stretches of highway and promises of high fuel efficiency, the same warning always plays- mileage may vary. Whether driving 70 MPH on empty freeways or stuck in traffic within city limits, so many factors go into how far a car will be able to go on a tank of gas. With energy the same concept applies as an extra megawatt of solar in the middle of the day is a lot less valuable in a region with abundant solar than a megawatt in the evening ramp or in a region with only a few gigawatts of solar. For regions with fish spill requirements, the same amount water could be much more efficient at generating power if it is sent through the dam when the spill requirements are not in effect. In our most recent eCommerce Platiinum (Package) ... » read more
Tuesday Jun 6, 2023   
ERCOT has been walking a tight rope when it comes to being the leader when it comes to wind generation making its way to the grid as the last two months have been trending lower with April’s 2023 profile looking more like 2021 while the May 2023 took a life of its own and sliced down to average just over 5.5 GW during the middle of the day. Figure 1 | ERCOT 12x24 Renewable Profiles The graph above is an illustration of the 12x24 wind and solar profiles within ERCOT for the past three years.  Knowing that the capacity has not changed, in fact grown for both commodities mentioned, the last three months of wind generation is quite amazing as Mother Nature seems to know that the grid is swimming with the growing solar generation (seen in the middle pane profile).  The ... » read more
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