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Thursday Dec 5, 2019   
Over the past couple of days, the California grid lost some of its renewable energy as the cloud cover wiped several gigawatts of solar during the middle of the day.  As a result of such an event, the CAISO grid quickly priced itself at a level that warranted natrual gas units to set price as they were the marginal unit during the middle of the day.  We did see the Pacific Northwest adjust accordingly to the price signal as the Paci transmission line filled up the entire day instead of shaping itself to the inverse of the typical solar profile. Figure 1 | CAISO Day-Ahead Paci Transmission Flows - Hourly If you scroll down to the third pane, you wcan see that the Desert Southwest did not track with the Paci flows as the midday remained at the lower levels while the evening ramp ... » read more
Wednesday Dec 4, 2019   
Over the past few days, we have seen some precipitation in Southern California. As a result, the solar profile within the CAISO footprint shifted quite a bit lower compared to what it looked like prior to the holiday weekend.  If you look at the chart in Figure 1, you can definitely see the shift lower this past Saturday and Sunday along with Tuesday's results.  If you compare actual peak numbers from the 26th of November to December 3rd, the delta is a staggering 4 GW (7.0 GW minus 3.0 GW). Figure 1 | CAISO Hourly Solar Profile With such a change, it is not surprising that the grid is needing more thermal supply and imports from the Pacific Norhwest during the middle of the day and less megawatts as flex ramp.  The graph below illustrates the change in flows on ... » read more
Tuesday Dec 3, 2019   
We are now one month into the withdrawal season but it does not seem that way when you start to look at the storage inventory. Despite some early winter weather and the decline in natural gas prices the EIA inventory continues to expand the year on year storage surplus. Since the beginning of November the surplus has moved from 530 to 548 BCF as of last week. This week's report is expected to add another 20 to that total. It is very feasible to see how we could get to 600 BCF in the coming weeks. Without any above normal heating load through the middle of the month the price outlook for the rest of the year looks dim.  Figure 1 | EIA Total Storage Inventory for the Lower 48  In the next two weeks there are only three days where the Lower 48 heating degree day total will be ... » read more
Monday Dec 2, 2019   
California always has a storyline when it comes to the energy sector.  In years past, you can travel as deep as the Energy Crisis to that of both SONGS nuclear units falling on defected rods and ultimately being retired.  Between each of the mentioned events was the aspect of the state shifting to a more green environment as it put in play their renewable energy policy and standards for the forseeable future.  This started the wind buildout in both the Pacific Northwest along with specific sections within the CAISO footprint.  It did not take long for the solar entities to join in on the game as the utility-scaled and behind the meter movements were apart of the daily conversation.  This led to several transmission upgrades that would be needed to make sure the ... » read more
Wednesday Nov 27, 2019   
Over the summer, we spent a lot of time talking about the bucket of hours where the power demand was quite high and the wind output within the ERCOT footprint was low.  When you threw in the increasing solar profile within the ISO footprint, you started to see some resemblence of the CAISO energy market where the evening ramp period was quite steep to which resources become quite limited when it comes to balancing the grid.  In the ERCOT market, the ORDC calculation stimulates the price action as the Operating Reserves (OR) is calibrated off a Demand Curve (DC) so when reserves get low, the price signal skyrockets up to help incentivize new build capacity within the grid.  This will be a common occurrence again this upcoming summer as the operators of the grid have made ... » read more
Tuesday Nov 26, 2019   
Coming into this winter, SoCal Gas was expected to have a much easier time balancing the system than in winters past. In the aftermath of the Aliso Canyon storage leak and the rupture of line 235, the gas balancing in Southern California has had to navigate a constant threat of reliability issues. A number of steps have been taken since last summer to avoid the pitfalls from last year. SoCal Gas has been able complete several pipeline repairs which have allowed the return of lines 4000 and 235 to service. They have also filled the storage capacity on the system from last year's draw down. And in a big surprise, the California Public Utility Commission has loosened the usage rules for the beleaguered Aliso Canyon storage cavern along with a reduced Operational Flow Order ... » read more
Monday Nov 25, 2019   
The Thanksgiving holiday seems to be taking a backseat to both Halloween and Christmas as the stores move right from pumpkins to Christmas decorations.  That does not seem right in my book as the Thanksgiving holiday is one of my personal favorites as you get to just hang out and eat good food, watch some football and have the next three days off where you can spend it with family and friends.  It is on the weekend when you can actually spend the time getting the Christmas lights out of the rubber containers in the garage and hang them up on the roof's edge in a way that lights up the neighborhood. Now the one thing that wil take a little joy out of the long weekend is the mere fact that Mother Nature is going to be delivering some cold turkey to many parts of the country.  ... » read more
Friday Nov 22, 2019   
Congestion on the grid is sometimes compared to driving on a highway during rush hour. The road can only fit so many cars, and once it reaches its limit, traffic slows down and new cars have a hard time entering. Likewise, due to transmission constraints, all of the low-cost energy that would like to flow to load cannot do so. When this happens, constraints trigger congestion, congestion is resolved economically, and the prices on the “sending” end of the constraint go down – the difference between the hub price and another price is referred to as basis. EGPS considered the basis relative to the SP15 hub for three locations: Palo Verde, Colorado River, and Mead. Mead and Palo Verde are two important import points for the CAISO in Nevada and Arizona respectively, and ... » read more
Thursday Nov 21, 2019   
If you have spent anytime looking at the Western Natural Gas Market over the past 3-4 years, the numbers of days where there was not a critical notice coming out of the SoCal Gas system is minimal.  You have to go back to the pre-Aliso Canyon leak days to really see a stable grid where natural gas transport capacity reached the 4.1 BCF mark and there was plenty of injection/(withdrawal) capacity.  In fact, the possibility of not having enough gas was so remote that H%$# would almost have to freeze over. Fast forward to today where it seems that with any given 48 hour time period, SoCal Gas can go from sending out a High OFO Critical Notice to that of a Low OFO notice.  The volatility that is tied to such swings stems from the lack of supply at times ... » read more
Wednesday Nov 20, 2019   
There are parts of Texas, Oklahoma and Kansas that are known as tornado alley as high and low pressure systems collide across the state lines and massive swirls of wind create cyclones that definitely cause damage within their paths way. Figure 1 | Tornado Alley - North Texas, Oklahoma and Kansas Now that renewables are present in both SPP and ERCOT, the regional section known as Tornado Alley has periods when Mother Nature provides enough wind  to where both areas turn into Wind Alley. This week is one of those weeks as both regions are showing extensive wind output by Wednesday/Thursday.   Let's take a look at the ERCOT market first as their wind profile will eat away at over half of the power demand profile for a good chunk of the day.  The graph below is an hourly ... » read more
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