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Monday Feb 1, 2016   
Saturday's CAISO auction clear gave us a glimpse of what might be in store come Q2 as load was down, solar was strong, in-state wind spiked and imports from the Pacific Northwest were plentiful now that the DC intertie is back in the mix.  As a result, congestion on Path 15 showed up south to north as the excess MW tried to find a home. Figure 1 | Congestion on Path 15 S to N - 1/30/2016 As you can see in Figure 1, the bottleneck showed up between HE 10 and HE 15, which is right in the heart of the solar profile reaching its peak.  Breaking it down, HE 7-12 ... » read more
Friday Jan 29, 2016   
Earlier this week we sent out a newsletter stating how the Pacific Northwest grid was going to be getting longer, well those days are upon us as load has shifted down due to above normal temperatures moving through the West. This has shifted the overall power load profile down across the majority of balancing authorities as well as heating demand.  Figure 1 | Actual vs/ Forecast Weather - West Cities Up in the Pacific Northwest, the warmer weather impacted the supply side as well, specifically the hydro bucket where any precipitation was in the form of rain ... » read more
Thursday Jan 28, 2016   
As of early December 2015, the NYISO started releasing the real-time supply stack fuel mix.  This is similar data to what other ISO’s such as CAISO, MISO, SPP and NEPOOL release on a daily basis.  This information is pertinent as it tells us how much of each generation type is running.  Below is a breakout of the NYISO supply component’s capacity and the respective percentage to the overall total capacity. Figure 1| NYISO 2015 Supply Stack Capacity - Gen Type   For those of you unfamiliar with NYISO two things will jump out at you. » read more
Wednesday Jan 27, 2016   
Over the past week or so, the Pacific Northwest's hydro system has been kicking out more MW's than earlier in the month.  This is due to the fact that the recent precipitation West of the Cascades (rain) and warmer weather have increased the overall side flows on the Lower Columbia and Westside. Figure 1 | Side Flows - Lower Columbia/Snake Add to it, the fact that the Canadian flows out of International Boundary have picked up once again and Grand Coulee's inflows are averaging triple digits over the past two days. Figure 2 | EnergyGPS Short Term Hydro ... » read more
Tuesday Jan 26, 2016   
There had been talks of production drop this year due to producers’ hedges rolling off. While that is a plausible theory, recent pipeline nominations have not show the effect of hedges rolling off, at least, not yet. Production level has been strong in Lower Marcellus (Figure 1), which includes southwest Pennsylvania, Ohio, and West Virginia.  As you can see, the Lower Marcellus showed a year-on-year increase of +2.9bcf/d, a month-on-month increase of +0.3 bcf/d for January.   Figure 1 | Lower Marcellus Production 7 Day Average ... » read more
Monday Jan 25, 2016   
With January almost in the books, I thought it would be good to take a quick look at how the California water situation is shaping up for this upcoming Spring/Summer.  First, the El Nino year that was to be expected is bring plenty of rain to the state, it just happens to be hitting in the Northern part of the state so far, which is good since that is where most of the hydro facilities sit anyway. Figure 1 | Northern California Snow Water Equivalent - North  As you can see in Figure 1, the red line is showing a pretty good slope over the past two weeks as ... » read more
Friday Jan 22, 2016   
EnergyGPS staff recently put together a training session for a client. The client wanted an overview of US power and natural gas markets for people in the renewable energy business with little exposure to the wholesale markets. To make things a little bit more fun and interesting, we started our discussion of each RTO with a high level overview of that RTO and a popular culture reference to personify that market. In the spirit of having a little bit of fun on a Friday, we are presenting that portion of the training in today’s newsletter. We will work our way ... » read more
Thursday Jan 21, 2016   
The main headline this winter has been dominated by the bearish natural gas markets as weak demand coupled with stout supply has kept prices low.  More recently, the focus has shifted to the drastic decline in oil prices. Both the decline in NG and oil are bearish indicators for the power markets as weak NG price keep price down and cheap oil provides an inexpensive substitute if NG prices do spike. This week NEISO provided a perfect example of the bearish impact these two factors are having on power prices YoY.  The high temperature for Boston ... » read more
Wednesday Jan 20, 2016   
We are now half way through the withdrawal season. Storage inventory is higher than ever. The year-on-year surplus is at 587 bcf (See Figure 1 for a comparison). With such high inventory level, we wonder if certain clauses in the storage contract may force some shippers to withdraw gas. If so, how would it affect the cash prices? Figure 1 | Storage Inventory Year-on-Year Comparison Last week we talked about how ANR applies a .85% cycling reduction on any balance in excess of 20% of one’s maximum storage quantity. Many other pipelines have similar sections in ... » read more
Tuesday Jan 19, 2016   
Bye Buy Brent-WTI Spread Last week one of the most persistent energy price relationships in the global energy markets flip-flopped. For the last five years Brent crude oil has traded at a premium to West Texas Intermediate (WTI) as evidenced by the figure below which shows the Brent WTI spread (Brent less WTI). Earlier this week WTI traded $1.28 per barrel above Brent. Figure 1 | Brent-WTI Spread for Last Five Years (dollars per barrel) So what has caused the Brent WTI spread to collapse and, at least temporarily, reverse? While some analysts suggest the lifting of ... » read more
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