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Tuesday Oct 18, 2022   
Yesterday's NYMEX was one of the most violent sell offs we have seen in the history of the market. Futures fell 45 cents which was 7% of value in just hours taking the prompt contract down to just $5.99. The move continues the slide that began in late August just prior to the September bid week when as a comparative fuel, the price of methane has usurped the price of ethane. For a practical matter, the two are not perfect substitutes as the differences in heat and water content make the ability to push ethane into the natural gas stream a limited endeavor. Since it can be accomplished in small doses, ethane can also be used as a substitute for natural gas in industrial sectors daily operations if the supply can be readily secured.  Back in August the appreciation of NYMEX ... » read more
Monday Oct 17, 2022   
Over the past year, EnergyGPS has been covering the evolution of the CAISO battery fleet as part of the Platinum/Platinum Renewable packages we offer on our website.  We started out laying out the different markets to which the new technology had at its disposal, which are the ancillary service markets, real-time energy and the day-ahead auction clears.  It was clear that the fleet was going to attack the markets in the order mentioned as the 12-month coupon tied to capacity is ideal but as they capacity continued to grow, the margins tightened to which the only option left was the energy space.  Figure 1 | CAISO Battery Operations – Hourly The graph above is an illustration of the CAISO battery charging pattern (blue shaded area), discharge (orange shaded area) and ... » read more
Friday Oct 14, 2022   
In early 2021, we released an article that gave a high-level overview of the performance of wind and solar across all the US ISOs (plus the Pacific Northwest). We revisit the Renewables Awards once again for 2021, only 9 months late! This blog will focus on one category of the competition: the generation-weighted price that each resource earned. The table below shows the gen-weighted real time price of solar and wind resources across various markets in the US[1], sorted by 2021 values, from highest to lowest.  Figure 1 | Weighted Average RT LMP List by Market, Location and Resource - 2020 through Q3-2022 The lowest valued renewable resource shown here is SPP North Wind, winning first place in the category of Cheapest Renewable Resource just as it did back in 2020, with a weighted ... » read more
Thursday Oct 13, 2022   
The first 10 days of October took the wind out of the sails of a lot of folks in SPP country.  The last week brought a crushing blow to college football fans across the states of Kansas and Oklahoma.  The Jayhawks football squad came into last weekend with a 5-0 record and ranked the number 19 team in the country in the AP top 25 poll, their first time as a ranked team since October of 2009.  Their dreams of a truly special season were obliterated on Saturday as their star quarterback suffered a grade 3 shoulder separation during a 38-31 defeat versus TCU.  Their conference mates to the South may have been even worse off, as last Saturday’s Red River Showdown rivalry game between the Texas Longhorns and Oklahoma Sooners left the Sooners reeling after ending the ... » read more
Wednesday Oct 12, 2022   
Early in the morning on September 20th, a fire broke out at the PG&E Elkhorn battery located at Moss Landing in Monterey, California. Firefighters stood back and let the blaze burn itself out while working to prevent spread, adhering to the current protocol for battery fires. There were no reported injuries and the fire was contained to a single Tesla battery Megapack. However, the nearby highway was closed until the evening and residents were forced to hunker down in their homes. The Shelter-in-Place lasted most of the day as there were concerns over the presence of hazardous materials in the air. Recent reports released indicate there was no risk to human health. The event represents the most recent fire in a string of battery incidents across the globe and shows the progress made ... » read more
Tuesday Oct 11, 2022   
For the past thirty years I have had the same morning routine. I wake up, stretch, look at the weather forecast and then check the CME page to see where the HH futures are trading prior to getting into the shower. It has become as important as anything I do in my day. Most days the weather changes and corresponding futures price action are uneventful. October is typically the time of year where the country transitions to winter weather with most of the upper latitudes seeing the rise in heating degree days. Due to unseasonal warmth in 2020 and 2021 the slide to winter was delayed. The past few mornings have confirmed a transition to unseasonal cold for the most populous region of the Lower 48. As a result last night's CME overnight session was up 14 cents to $6.58 ... » read more
Monday Oct 10, 2022   
As you get older, the days/weeks/months roll by rather quickly or so it seems as we are already looking at the October tapping the middle of the month by week’s end.  Any end of summer items still on the list to do when it comes to yard work or house cleaning should move up the priority list as before we know it, the winter conversation is going to unfold with spurts of cold weather and if the current weather patterns persist, some intense type conditions could be in play across North America and Europe for that matter. The notion of time passing us by has been front and center of the Western market water situation as it has been well documented that the Colorado River has been dealing with decades of water consumption downstream for normal daily use and agriculture where the ... » read more
Friday Oct 7, 2022   
Fall is my favorite time of year.  Cool damp mornings, leaves turning colors, and holidays around the corner.  This fall, most people in the West are discussing grid reliability.  The recent heat wave in California put this topic at the forefront of the discussion if it was ever dropped.  We covered this event in detail in a recent Monthly Newsletter titled “September’s Hub, Heat and Hurricane”.  California skated by this time, but will things get worse or better in the future?  One program is making many people optimistic about reliability in the West: The Western Power Pools (WPP) Western Resource Adequacy Program (WRAP).  The WRAP is in the final stages of being implemented with a Tariff submitted to FERC and deadlines for ... » read more
Thursday Oct 6, 2022   
As a kid, the only wrestling I knew was that where the high school science teacher would turn in his backpack for a singlet and coach a team of classmates who wanted to make weight and compete on the mat that needed to be rolled out across the gym floor.  With the evolution of cable television and the urge to cross over from the technical sport that made a name for itself in Iowa to that of more showtime, the Worldwide Wresting Federation was being formed to which many know one branch as the WWE (World Wrestling Entertainment). One of the members of the WWE is known as Triple H, who transitioned from the ring to management over the years.  Many in the space know of his as the greatest professional wrestler of all-time.  That is a tall order considering there are countless ... » read more
Wednesday Oct 5, 2022   
Since 2020, the Southeast region of the US has lost 5 GW of capacity from coal plant retirements. The region is set to lose an additional 2.75 GW in the next 3 years. As the coal plants shutter, the next resource to be relied upon is often natural gas. It offers reliable energy, not dependent on the time of day or strength of the wind like renewables, but with fewer pollutants than coal. In years past, the grid alternated between coal and gas based on economic factors, such as gas prices and rail transport costs. Now the coal to gas switching is much less flexible as the number of gigawatts from coal plants dwindles. As we head into fall, let’s look back at how coal to gas switching played out in the Southeast region in the last summer month. Figure 1 | Net Summer Capacity of ... » read more
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