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Friday Oct 30, 2015   
Over the course of a week, the sudden drop in the natural gas has impacted the market in several ways.  The one thing that sticks out is how the coal to gas ratio has expanded to levels seen last spring when gas was thought to be at a low point coming out of winter and Production strong across the country. Figure 1 | Coal to Gas Ratio As a result, we saw power burns jump up quite a bit as entities starting to look at their portfolio as well as lean on the less expensive natural gas market to provide them with the power they needed to balance their ... » read more
Thursday Oct 29, 2015   
What do you get when the wind is expected to blow and some precipitation up in the Pacific Northwest?  You get lower heat rates in both the Pacific Northwest and California, here is a breakout as to why. First, you get a longer grid in the region to where the marginal cost of energy has to move lower to incentivize natural gas units not to run.  This occurred in the cash market for today with the Midc heavy load indexing at $19.44 and Malin coming in at $2.17.  Up until this point, the Midc power price has been settling in the $23.50-$24.50 range with ... » read more
Wednesday Oct 28, 2015   
In the Pacific Northwest, people have been living off of borrowed time as the weather has been beautiful all Fall. Over the last few weeks, the overnight lows started to dip down to where the morning and evening ramp periods have shown an increase in demand. Figure 1 | BPA Load Profile - Hourly On the supply side, wind has been off and on since the middle of the month with Monday sitting in between 2,000 - 3,000 MW on any given hour.  As you can see in the graph above, the wind quickly shifted down yesterday and should be somewhat low today.  To keep ... » read more
Tuesday Oct 27, 2015   
The weather forecasts continue to show a warmer than normal start to November. For example, looking at the Res/Com BCF equivalent to the forecasted HDD/CDD's across the country, the first 9 days of November are adding up to 159 BCF whereas last year during the same time period was more in the ballpark of 245 total BCF (which is closer to normal).  The 86 BCF delta divided by the 9 days in the period, makes the grid roughly 9.5 BCF longer per day.  If this pattern holds true for another 10 day period, we could be looking at a 180 BCF delta year on year for ... » read more
Monday Oct 26, 2015   
As it rained here in the Pacific Northwest on Sunday, all eyes continue to be on the weather pattern forming across the country for the month of November.  As we left for the weekend, a warmer start to November was being priced into the market as the prompt month ended the day on Friday just over $2.28.  Such a close was $0.17 lower compared to where it started the week out and sliced right through a somewhat bullish EIA number on Thursday. As of Sunday morning, any white area to slightly blue (moderate to slightly cooler) across the Northeast corridor was ... » read more
Friday Oct 23, 2015   
Over the years in the NFL, video replay has been implemented and each team is allowed to challenge up to two plays prior to the last two minutes of each half and any touchdown score.  During these two instances, every play is considered to be under review as the person sitting up in the control room is in constant communication with the officials on the field to let them know they are looking at the play.  Some challenges are a no-brainer as it is obvious after seeing the play again that the runner was down by contact or the receiver did not have two feet ... » read more
Thursday Oct 22, 2015   
Prior to the open yesterday, the Nymex forward curve was down $0.04, which put it right back to where it was after last week's EIA storage number of 100 BCF injection. As the cash market started to trade lower, the front months continued to shift down as the November contract dropped below $2.40.  All this was despite the fact that over the past couple of days, the overall production numbers in Marcellus, Rockies and Midcon dropped 1.5 BCF in aggregate.  The former was the biggest culprit dropping over .9 BCF, which we believe is due to some maintenance on ... » read more
Wednesday Oct 21, 2015   
Monday's initial STP data release showed little change to the previous run (10/13). Figure 1 | STP Run on Run Comparison - 10/20 vs 10/13 Later yesterday afternoon, another set of data was released that actually pushed the most recent run's flows lower starting in November and extending out into January. Figure 2 | Latest STP Run (for the 20th) on Run Comparison - 10/20 vs 10/13 As you can see in Figure 2, the November numbers shifted down roughly 300 MWa while the December monthly average came in 570 MWa lower mid-month and over 800 MWa by the end of the month. » read more
Tuesday Oct 20, 2015   
Here is an update to a newsletter we sent out last week regarding ERCOT's load and wind profile.  This past weekend saw load shift down as temperatures across the state were cooler than the previous week. Figure 1 | ERCOT Supply/Demand - Daily As you can see in Figure 1, not only did the load shift down but the wind generation started to pick up last week Thursday and continue on through the weekend.  The net impact of both the load dropping and wind increasing was substantial, especially in the evening ramp. Figure 2 | ERCOT Net Load Profile - Hourly ... » read more
Monday Oct 19, 2015   
Portrait of Sabartes, Pablo Picasso 1933 What do you get when you cross Pacificorp and the California ISO?  PaCAISO!!  And like the real artist from Spain, PaCAISO has entered a surrealist period.  For those of you not closely following the development of energy imbalance markets (EIM) in the west, the CAISO is in the process of folding surrounding utilities into its EIM.  Joining an EIM is a light version of an ISO, where you participate in centralized real-time dispatch but ... » read more
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