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| Friday Jul 8, 2022 | |
| If I were in charge of carbon policy I would implement a “tax and refund” mechanism as outlined in the book “Carbonomics” by Stephen Stoft. A carbon "tax" sends a clear and stable price signal to industry considering making investments in carbon reduction. The “refund” part makes it revenue neutral by distributing the carbon tax proceeds back to taxpayers. But I’m not in charge and the carbon programs in the US tend to be a version of cap and trade. Both systems use a combination of government and markets to achieve a solution. Under a carbon tax, the government sets the price of carbon and the market determines the volume of carbon reductions that can be achieved at that price. Under a cap and trade program, the government sets the volume of ... » read more | |
| Thursday Jul 7, 2022 | |
| Any discussion of power markets in the West is likely to turn at some point to the hydro systems present. In CAISO, hydro generation represents a small but important segment of the supply stack with anywhere between 1.5 and 5 GW available on average in a given day, depending on the season and water how plentiful the water year is. In the Pacific Northwest the hydro system is crucial, accounting for a huge portion of the demand in the area. For example, earlier this week on Tuesday, hydro generation in the Northwest averaged 18.5 GW over the heavy load hours, whereas load averaged just 200 MW higher at 18.7 GW. Even with the differences in relative sizes of hydro in California versus the Pacific Northwest, there is one thing both had in common leading up to the ... » read more | |
| Wednesday Jul 6, 2022 | |
| The 4th of July celebration are now over, and it is time for the summer family vacations to be in full swing as the September is right around the corner and the classrooms will be full once again. Traveling is not what it used to be as airlines are dealing with staffing, planes with unplanned maintenance and the simple fact that entire operation falls under the umbrella of supply chain shortages on all fronts. Figure 1 | Cancellation Policy - Airlines Sticking with the airlines, the one thing we are learning about firsthand is how unclear the cancellation policies amongst the different flight entities as stories are plentiful around days of waiting for the next flight to one’s destination where sleeping on the floor of an airport gate is the only option. The chaos ... » read more | |
| Tuesday Jul 5, 2022 | |
| While temperature has and will always be the main driver of electric demand for the Lower 48 grid, it does not always give the best estimate for power burns. As the resource dispatch becomes more reliant on intermittent renewables generation the gas demand forecast has become more volatile due to wind and solar sensitivity. The problem is that when temperatures are at extreme conditions and renewables output falls it puts the grid at risk because the swing supply is pushed into natural gas. There is a lack of portfolio effect in the resource mix. This week ERCOT is likely to see another summer peak demand record and on top of it it will happen without the aid of the increased wind generation. That should push natural gas burns to their all time highest level as all assets are brought on ... » read more | |
| Friday Jul 1, 2022 | |
| You might recall that 2021 was a bit of a weird year for CAISO curtailments. The typical trend, neatly exemplified from 2018 to 2019 and 2019 to 2020, is that renewable curtailments tend to grow year-on-year with the addition of more renewables (particularly renewables of the same type). Despite the fact that solar installations continued to grow in California, 2021 curtailments came in right around those of 2020—actually slightly below. Figure 1 | CAISO Curtailments, 2018 - 2021 A variety of factors came together in a unique way to ensure that, in 2021, CAISO didn’t need to curtail significantly more MWh than the previous year. 2022, meanwhile, has not seen the same trend. Figure 2 | CAISO Curtailments, 2019 – 2022 While the exact numbers aren’t really readable ... » read more | |
| Thursday Jun 30, 2022 | |
| With the official start of summer just over a week ago, attention is on the power burn component in the natural gas space as it is one of the crucial components of summer demand. Here in Portland, air conditioners are just starting to turn on as last weekend brought the first real blast of summer temperatures to the Pacific Northwest after a cool spring in the West left the Northwest’s gas plants lying largely unused up until this week. Elsewhere in the country the heat has been present for weeks. Per the EnergyGPS daily scrapes of natural gas noms and mapping to power plants across the country, we are seeing the monthly June 2022 daily average settle in just over 2.5 BCF higher compared to June 2021 (which came in at just under 36 BCF per day). The impact of power ... » read more | |
| Wednesday Jun 29, 2022 | |
| The end of Q2-2022 is upon us and that means that the 4th of July is right around the corner, to which we all know in years past that firework displays will be filling the skies across the country. It is a time of celebration of the United States of America as a well as a period symbolizing the start of the third quarter of the year to which brings with it extensive heat that ultimately drives up the electricity demand across each region of the country. Figure 1 | 4th of July Fireworks If you have been following the energy markets over the past few weeks, the month of June has had a few fireworks of its own as Mother Nature has delivered extensive heat across the country that ultimately has each region setting new peak demand numbers to which does not bode well for the ones ... » read more | |
| Tuesday Jun 28, 2022 | |
| During this time of year the Desert Southwest which includes the Imperial Valley, Arizona, Southern Nevada and New Mexico see their warmest days. Temperatures can often top 120 degrees F as the solar activity creates a bubble of heat. Winds follow a stable west to east pattern as hot dry air moves over the Mohave Desert into West Texas. But once a year the summer monsoon season develops shifting the prevailing winds. The pattern moves south to north bringing cooler wet weather from the Baja of Mexico. The southerly winds knock down the daytime highs and the heavy rains often produce flooding events. Figure 1 | NOAA Satellite Imagery of DSW for June 27 The National Weather Service defines the DSW Monsoon season as June 15 through September 30. This year the winds ... » read more | |
| Monday Jun 27, 2022 | |
| Ocean’s Eleven is an American heist comedy film released in 2001 where two partners-in-crime go to Las Vegas to pitch a plan to wealthy friends and a former casino owner. As the numbers increase, the plan of robbing the Bellagio, The Mirage and MGM Grand casinos becomes real. Throughout the movie, the cast of characters featured an ensemble cast, including George Clooney, Brad Pitt, Matt Damon, Don Cheadle, Andy Garcia, Bernie Mac and Julia Roberts. Figure 1 | Ocean’s Eleven compared to Soccer 11-15 This past week, the US Youth Soccer FarWest Regional tournament was taking place in Boise, Idaho where an unknown film was being produced to which I will call ‘Soccer 11-15’. The lower budgeted film was being produced with a VEO camera that sits ... » read more | |
| Friday Jun 24, 2022 | |
| Energy GPS Consulting recently finished a project analyzing a very wonky yet important policy question related to price formation in the CAISO. Unlike most of our work, which is proprietary for a specific client, this work is now in the public domain. Powerex and the Public Power Council hired EnergyGPS to evaluate the impacts of fast start pricing policies on CAISO real-time market prices. Let me explain – until recently FERC policy called for RTO’s to exclude certain costs from the calculation of LMPs. One type is startup costs. If it cost a combined cycle plant $16,000 to go from a cold state to full generation, that cost was excluded from the calculation of the LMP. Instead, those startup costs were conveyed separately to the generator and recovered from load via and ... » read more | |
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