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Friday Dec 30, 2022   
Throughout this past year, we’ve published market flashes, blogs, and articles centered around ERCOT’s new ORDC rules, and comparing what prices would have looked like under the 2021 rules to what actually played out this year. Today, we’re revisiting the scarcity event that occurred in ERCOT over the holiday weekend, and again asking the question, what would this event have looked like in 2021? First, an overview of the event: Figure 1 | ERCOT Real Time Dashboard, 12/19/22 – 12/25/22 Prices in the real time market (orange line, top pane) jumped on the 23rd as load had been climbing the entire previous day, hovered around 70 GW overnight, and didn’t truly let up until Christmas Day. Meanwhile, wind generation was not only falling steadily all day on the ... » read more
Thursday Dec 29, 2022   
For years natural gas and coal have formed the backbone of dispatchable thermal electricity generation in markets across the country—so much so that we often refer to the sum of gas and coal production for a given period as “total thermal gen”.  With the slow but steady phasing out of coal as a resource in the US—starting in the West but moving into the Midwest and Northeast as both MISO and PJM faced significant cuts in coal capacity over the past 18 months—it may be time to rethink that paradigm.  The events of this past holiday weekend in PJM illustrate the changing conditions.  The chilly winter conditions heavily impacted the grid from both a demand and supply-side perspective, starting with the spate of freeze-offs in the region that ... » read more
Wednesday Dec 28, 2022   
The old saying ‘the eyes of Texas are upon us’ had the words altered a bit over the holiday weekend and the new saying went more like ‘all eyes are on Texas as another cold weather is upon us’.  Government agencies, ERCOT management and the actual system operators were watching Mother Nature’s every move as they were all kids trying to track the pathway of Santa Claus and his reindeer on Christmas Eve.  As we have all seen by now, the storm trackers delivered some of the coldest temperatures since the February 2021 period that nearly crumbled the ERCOT power grid and disrupted the natural gas pipeline infrastructure. Figure 1 | All Eyes are on Texas This go around had everyone on high alert leading up to the event as the ‘what could ... » read more
Tuesday Dec 27, 2022   
The news over the past week has been all about the deep freeze that gripped the Lower 48. From coast to coast the country saw below normal temperatures with some regions experiencing departures from normal of over 30 degrees. It was one of the coldest stretches of December weather on record pushing the country's natural gas demand to record levels. Since the impact was so widespread it also caused production receipts to freeze off in every major producing basin. Total Lower 48 natural gas production fell by 14 BCF or 15% of total output into the holiday weekend and is just starting to recover today. It will be a slow climb out of the production hole and could last up to two weeks before volumes are fully restored.   Figure 1 | US HDD Forecast Matrix for Dec 12-26 - Departures ... » read more
Friday Dec 23, 2022   
With Elon Musk tweeting on December 20th “I will resign as CEO [of Twitter] as soon as I find someone foolish enough to take the job”, one can only assume that this means he intends to devote more energy towards carrying out his goal of sending 1 million colonists to Mars by 2050. Given that Mars is inhospitable without constant life support systems, reliable power generation would be the lifeblood of any Martian settlement.   In film, Martian base power sources have ranged from the heat of decaying plutonium-238 (The Martian) to mysterious 500,000-year old alien reactors (Total Recall). As seasoned energy analysts, we know that many of the ideas portrayed in film, quite frankly, are unrealistic[1] and ridiculous. As such, we offer up our preliminary analysis of the ... » read more
Thursday Dec 22, 2022   
With the frigid winter cold still lingering over much of the West for a few more days, the bulk of the weather event is moving East across the country with the Midwest and South-Central regions now sitting squarely in the crosshairs.  In fact, the temperatures are such that the HDD accumulation for one day outpaces that of any day seen during the infamous February 2021 Storm Uri event that nearly put an end to the ERCOT power grid and exposed the natural gas pipeline infrastructure as both megawatts and molecules were sought after for a period of 10 days. The upcoming weather event looks to be a short burst from now through the holiday weekend, and each market has been discussing the preventive measures that need to be taken to make sure the power grid and pipeline infrastructure are ... » read more
Wednesday Dec 21, 2022   
Alberta is facing frigid temperatures this week with lows in Calgary down to -28 degrees overnight. The frigid temperatures are more than 15 degrees cooler than normal for the start of winter in the region. It’s a continuation of below normal temperatures that have lasted throughout this autumn and now into the holiday season. The current cold is set to last through Friday with lows in the double-digit negatives before warming up Saturday and heading into above normal temperatures with lows well over 0 to the positive side by Sunday. Figure 1 | Alberta Temperatures from WSI Trader With heating demand up, load for the region reached over 12 GW on Monday and Tuesday. These are some of the highest load conditions we’ve seen in AESO, only comparable to this past January when load ... » read more
Tuesday Dec 20, 2022   
After the rupture at the Freeport LNG facility back in June the plant made claims that the liquefaction would resume in short order and that the issues surrounding the problem could be easily remedied. The plant is now seven months past the rupture date and still there is no solid time frame for its return. At every turn the plant has been met with more data and information requests from the Pipelines and Hazardous Materials Safety Administration (PHMSA). But now the Federal Energy Regulatory Commission (FERC) has entered into the fray by making the latest data request. On December 12 FERC sent a laundry list of items that they need to investigate before they would grant license to operate. Immediately Freeport started sending in data but as we are all aware of, completing things ove the ... » read more
Monday Dec 19, 2022   
Waking up on Sunday and seeing Portland’s weather match that of Houston is all you need to know when it comes to the conditions on the grid. If you throw in the simple fact that the Pacific Northwest has been witnessing below-normal temperatures throughout December, the edge-pieces of the puzzle would be in place for a frigid Lower 48 outlook as the holiday season is upon us. Figure 1 | ERCOT Degrees From Normal Forecast This is clear from the image above, which displays the weighted average temperatures and their degree from normal 15-day forecast for the past two weeks.  The colder weather has been on the radar screen for some time but what is clear is that as of last week, the transition from cold to really cold was in play over the holidays.  This is shown by the ... » read more
Friday Dec 16, 2022   
If you’ve read our latest monthly Renewable Report, you might have seen the metric we track for the percentage of wind generation which occurs at negative West Hub prices. We track this metric in particular (as opposed to, say, wind generation occurring at negative Houston Hub prices) because most of ERCOT’s wind generation is installed in the West Hub, and so wind blowing in the western part of the region tends to be a large driver of increasing supply on the grid to a point where West Hub prices can drop below $0/MWh. Unsurprisingly, during the relatively low-load months of October, November, and December, the percentage of wind gen at negative West Hub prices has been significant over the past few years. However, looking at this metric prompted the question, what has solar ... » read more
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