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Friday Aug 28, 2020   
The month of August is coming to an end and that usually means fall is in the air, football season has begun and schools are in session.  The only one that seems to be playing out across the country is the fall is in the air component as the weather forecast has several regions cooling off this weekend and holding lower cdd's early next week and once we get to the 11-15 day period the model runs have the Lower 48 below the normal line and well below that of last year. Figure 1 | WSI CDD Daily Forecast - Lower 48 This is typically football weather as the weekend mornings are spent gathering in parking lots or backyards ready to tailgate before entering the stadiums or turning on the television to hear the crowds in the background singing their school song the players run out of the ... » read more
Thursday Aug 27, 2020   
Ill Advised Written by Tim Belden, Energy GPS LLC, August 26, 2020   Portland is a volatile place right now. If you read the news you see scenes of protests and riots. This week, our local utility is in the news – Portland General Electric (PGE) announced that they experienced trading losses and the stock price has lost more than 10% in a few days. In an 8k filing, PGE stated: “… energy trading activity in certain wholesale electricity markets (that) resulted in realized and unrealized losses of $127 million as of August, 24th” “total third quarter losses in the portfolio are estimated to be up to $155 million subject to market conditions – although the ultimate amount of the losses could exceed that amount.” “Certain PGE personnel ... » read more
Wednesday Aug 26, 2020   
There is a lot going on in the marketplace these days as the West is slowly migrating back to normal after a week of high/chaotic prices that saw the Desert Southwest real-time bilateral market get up to $4000/mWh while the Midc limped along at levels that mimiced that of coal units being on the margin.  If you look at the cash markets for today, SP15's bilateral price settled in at $82.33 while Midc was just under $25.00. The $57 spread was $20 higher than what we saw for Tuesday but well below the $104 and $411 spread tied to the heat wave.  As we move into the month of September, the Western market will have its disconnects as fires inside of California continue to rage the forests and hillsides where neighborhoods are being engulfed once again. Figure 1 | West Bilateral ... » read more
Tuesday Aug 25, 2020   
This summer we are seeing a surge in nuclear outages across the Lower 48. Compared to August of last year the NRC outage report is showing an additional 5 GWa off line. Most of these outages are either forced, elective maintenance or retirements as the refuel season typically does not start until after the Labor Day weekend. The change from last year has averaged out to an additional 1 BCF per day of power burn demand month to date but this does not tell the whole story. Total power burns for the Lower 48 are averaging 41 BCF for this month which is just under where we were this time last year. That is a big shift from what we have been experiencing for most of the summer injection season.   Figure 1 | NRC Nuclear Outages for August 24 The Lower 48 power burns have ... » read more
Monday Aug 24, 2020   
Last week was one for the ages as extensive heat moved through the entire West with the coastal cities in California reaching triple digits while the Desert Southwest was over 115 degrees for the entire period.  Such heat was something that the grid has seen in prior years but this year tallied blackouts on a Friday and Saturday evening inside PGAE's system, a chaotic bilateral market as the CAISO made the decision to cut exports to surrounding balancing authorities and wildfires raged across the state.  Each one had its own dialogue and conversation that will eventually have a chapter in the book written about the California Deregulated Market. Our latest Newsletter Article titled 'The Book's Next Chapter', takes a deeper dive into the key moving parts that led up to the ... » read more
Friday Aug 21, 2020   
This week EGPS has written extensively about the situation in California over the past week, as CAISO has seen everything from rolling blackouts and curtailed exports to energy prices exceeding $1000 amid the summer heat spell that has smothered  the entire West.  Looking at the acrobatics the CAISO has been performing to try to stay on top of their demand for power makes me think of circus performers like in Cirque du Soleil, which I would have gone to see earlier this month here in Portland, if their 2020 summer shows hadn’t been canceled due to COVID-19. Figure 1 | Picture from Cirque Du Soleil: Volta Image Source: https://www.cirquedusoleil.com/volta The EIM is a key component of CAISO’s “balancing act”, easing the ability of members to find a home ... » read more
Thursday Aug 20, 2020   
I find myself scouring the website during the peak evening ramp hours to see how California is faring when it comes to balancing their system as this week will be looked back upon by economists, academic professors and the CAISO itself to make sense of how we got here, what does it mean for the near term and how will situations like this be handled in the future.  This blog is not going to go into all that but it does give you a flavor of how things are playing out.  If you sit in the California Heartland, you are working through a period of time where localized blackouts were enforced last Friday and a govenor's call for every resident to do their part by conserving the energy that was seemed to be abundant. Figure 1 | Pre-Summer CAISO Notification I went back to the archives ... » read more
Wednesday Aug 19, 2020   
It goes without saying that the Western markets have been nothing less than dull the past week or so as we have come across rolling blackouts, day-ahead exports getting cut and now the congestion between that of SP15 and NP15 was almost entirely eliminated for today's flow date.  That does not mean we should forget about what is happening on the ground level as the system operators are watching the big screens minute by minute/second by second in the bunker in/around Folsom, CA.  It is a stressfull time for many as balancing the electrical grid is never easy and with many new balancing authorities integrated via the Energy Imbalance Market (EIM).  It is an interesting puzzle that relies on several moving parts throughout the day let alone within each hour. If you ... » read more
Tuesday Aug 18, 2020   
In yesterday morning's newsletter we touched on the California power market. Today we will move over to the gas markets.  The record breaking heat has made the headlines all over the country after Death Valley posted a daytime high of 131 degrees Fahrenheit yesterday. The high temperatures have pushed the CAISO on peak load average to 50 GWa for today which smashes last year's peak load by over 6 GWa. Demand is not the only item setting records. The CAISO SP15 auction price pushed up to $667 for today's delivery which is a level not seen since the California Energy Crisis some 21 years ago.  There are rolling brown outs throughout the state as the capacity on the grid is stretched thin.  Figure 1 | CAISO SP15/SoCal CG Heat Rates for Q3 2017 - 2020 Gas demand is also at ... » read more
Monday Aug 17, 2020   
CAISO’s reliability took a turn for the worse on Friday August 15 and Saturday August 16.  High heat and high loads (approaching 47 GW) lead CAISO to initiate Stage 2 (S2) and Stage 3 (S3) emergencies on both Friday 8/14 and Saturday 8/15.  Stage 2 events represent physical scarcity of reserve margins and lead to initiation of demand response programs.  Stage 3 leads to involuntary load curtailments--i.e. rolling blackouts.  California's first in 19 years.  Figure 1 shows price patterns on Friday as the staged emergencies came and went.  At the outset it is notable that CAISO's markets saw scarcity a comin' since day ahead (DA) prices were very strong in these intervals, averaging $620/MWh for the period 18:00-21:59.   In Figure 1 ... » read more
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