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Thursday May 25, 2023   
Battery operators trying to capture the arbitrage in the SP15 real-time and day-ahead markets face many choices. One of these includes deciding whether to double-cycle and chase the price peaks in the morning ramp. The cycle of midday charging and evening dispatch is consistently profitable and reliable, but more often in the winter, the morning can provide lucrative arbitrage opportunities as well. Back in February, we pointed out the missed opportunities as batteries sat idle and missed some of the highest prices in the day in ‘Missed Morning Price Peaks for SP15 Batteries’. Since then, the CAISO fleet performance has been more of a mixed bag as some days continue to miss high morning prices while other days see discharge peaks just as high as in the evening. The figure ... » read more
Wednesday May 24, 2023   
During the month of May, the power markets in the West have undergone a material change.  After a lean winter in terms of supply including very dry conditions in the Pacific Northwest from a hydro perspective and thermal units both in the PNW as well as down in CAISO being called upon to operate intensely, recent weeks seem like a night-and-day change.  Mid-C and the CAISO hubs have been in the teens more often than not with midday prices dropping below zero consistently in California.  Since the final week of April, the Northwest has seen hydro flows and generation increase sharply, to a much higher degree than expected.  The expectation for the month of May has swung quickly, which has implications for the coming summer and puts this water year in a unique position ... » read more
Tuesday May 23, 2023   
The prompt month felt downward pressure coming out of the weekend as the weather forecast was calling for modest temperatures leading into the long Memorial Day weekend.  Such prompted the cash markets across the East and South Central to pull back on its settles all the while the power levels were basically stuck at a level that would help widen the implied heat rates. Figure 1 | PJM Implied Heat Rates The chart above displays the PJM West and East implied heat rates for the past two weeks with the darker blue line tied to the former while the gold line represents the latter.  With spot gas prices tilted to the $1.40 level over the weekend and on display to start the week, the uptick in the West continues to trigger natural gas-fired generators to win out in the battle of the ... » read more
Monday May 22, 2023   
Memorial Day is a time of year where transition starts to occur with the first being that the school year is almost complete, and the young adults look forward to their summer activities outside the classroom.  We also see this time as putting the first two months of Q2 behind us and looking ahead to the final month of the spring (June) while keeping one eye on what the weather vendors think Mother Nature has in store for Q3. Figure 1 | Memorial Day Transition The biggest transition during the Memorial Day weekend sits in the Pacific Northwest as it is a time that sees the water year usually hit its peak flows by the end of the month and all that is left is to analyze what snowpack is up in the mountains and what it means for meeting the dam storage refill targets by the start of ... » read more
Friday May 19, 2023   
ERCOT and SPP are considered the front runners when it comes to their respective wind capacity installation over the past decade or so.  If you look at the current forecast for wind generation, you will do a double take most likely as the numbers are displaying single digit averages across both regions. Figure 1 | ERCOT Net Load Profile The graph above is part of the EnergyGPS ERCOT Morning Report/Dashboard where we illustrate the net load that is derived by taking the hourly power demand (red line) and subtracting out the renewable components such as solar (gold shade) and wind (darker blue shade). The lighter turquoise shaded region displays the net load with the first half tied to the actuals and the second half indicated what is to come over the next week. It is clear that the ... » read more
Thursday May 18, 2023   
The growth of renewables, such as wind and solar, is meant to solve the problems created by burning fossil fuels. However, implementing these technologies comes with its own set of challenges to power grids across the country. ERCOT and PJM are two ISOs that have seen growth in both solar and wind over the last few years. While the power is cleaner than a coal or natural gas plant, it’s intermittent and only available when the sun is shining, or the wind is blowing. This creates a consistency problem where some hours have plentiful amounts of renewable energy while others must still rely on thermal plants. ERCOT saw average solar generation in the middle of the day up to 10 GW so far this May, while average wind is up to 15 GW in its peak hour. With more renewable capacity comes ... » read more
Wednesday May 17, 2023   
The West is enjoying high temperatures this week with highs up to 100 degrees F in Phoenix on Monday, May 15th. It’s just the beginning of a heat wave expected to last over the next two weeks. The figure below shows differences from normal cooling degree days this time of year based on a composite Desert Southwest temperature. This week has temperatures 4 to 7 degrees warmer than normal, and it coincides with heat waves in both the Pacific Northwest and California. The last time this happened this spring, all three regions depended on CAISO thermal to meet the increased demand. This round of heat should play out a little differently as the heat has cranked up enough in the last few weeks to melt the snow in the mountains and send it down through the dams across the West. We explore ... » read more
Monday May 15, 2023   
Warm weather abounds across the entire, which equates to strong power demand and the acceleration of the higher elevation snowpack in both the Pacific Northwest and California.  The former has limited quantity per se in the Upper Columbia basin (see recent EnergyGPS Pacific Northwest Hydro Report/Discussion) while the latter is plentiful as multiple storms moved though the Golden State since the beginning of January 2023.  The amount of snow that remains in the mountains is record setting and is creating issues tied to where to put the remaining snow water equivalent (SWE) quantity as storage facilities are reaching their max and flooding is already in play along the riverbanks. Figure 1 | CAISO Hydro Profile – Hourly The graph above displays the hourly CAISO hydro ... » read more
Friday May 12, 2023   
Our blog yesterday focused on an element of our latest Newsletter Renewable Monthly report: specifically, it examined the expansion of solar capacity in ERCOT going back to 2013, and compared the average monthly solar profile so far this year to the profiles during the past two years. The increase is certainly something to watch, as ERCOT now has higher solar penetration than any other US ISO besides CAISO. Today we’ll focus on a different element of the same report, but staying within the zone of ERCOT solar. Our Renewable Monthly reports focus on the most recent past three months, and compare that time period to the same time period for the past two years. The figure below shows a snippet of the information available in the ERCOT table in the report: Figure 1 | ERCOT RTC Prices ... » read more
Thursday May 11, 2023   
As renewable penetration increases in a given market—especially when solar power rises in prominence in the supply stack—a lot of attention is given to the evening ramp period, as the rapid drop-off in generation in the evening leaves the grid facing a longer and longer “neck” of net load with MW that need to be replaced.  In some regions and seasons that can be mitigated by other renewable resources such as wind, depending on the shape of the hourly profile.  Looking back at the first full month of spring, we saw this interplay in markets across the country, with ERCOT at the forefront.  This was one of the topics of focus in hour latest Newsletter Renewable Monthly article, “April 2023- The Evening Net Load Neck”. ERCOT is seeing rapid ... » read more
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