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| Wednesday Sep 11, 2024 | |
| CAISO’s big heat event, which overlapped with triple-digit temperatures in the Pacific Northwest, occurred last Thursday and all eyes were on the California grid to see how it would handle the heat. In the days before the event, we covered the fundamentals and all the pertinent information in several of CAISO market flashes. We discussed the record-breaking coastal heat, as well as the flexible generation found in CAISO hydro and batteries. In the aftermath, we’ve covered the role of batteries in the event more in depth in two battery reports. In the first report, published last Friday and titled ‘A Supporting Role for the CAISO Fleet’, we covered the disappointing real-time arbitrage opportunities for batteries, as well as the lack of overall discharge. The figure ... » read more | |
| Tuesday Sep 10, 2024 | |
| In August 2024, escalating congestion costs at the SPP South hub significantly impacted the grid, drawing widespread attention. Demand was strong this August, surpassing 2022 levels and matching August 2023. However, increased wind generation contributed to a lower net load than in the past two years. Figure 1 | SPP 12x24 Supply & Demand Profile From a heat rate perspective, this August witnessed substantially higher day-ahead heat rates at the South hub compared to the past two years, with HE17 reaching an average of 56.8. In contrast, the North hub's day-ahead rates dipped slightly below the August 2023 level of 44.6, averaging 30.3 for HE17—26.5 points lower than the South hub. Figure 2 | SPP Marginal Cost of Congestion (MCC) Profile The graph above in figure 2 ... » read more | |
| Monday Sep 9, 2024 | |
| Last week saw extreme heat hit Southern California’s coastal region creating a once-every-couple years event for power demand within the Golden State. The simultaneous heat in the Desert Southwest and Pacific Northwest moved the scarcity conversation to the forefront of conversation amongst market participants. This makes sense given that years past have seen the start of September deliver fireworks as the natural gas space was constrained by restrictions tied to Aliso Canyon’s storage and transport capacity. The power sector was limited by flexible generation as lower hydro years and lower battery capacity were in play. The outcome over the past few days is interesting as the price levels hit the highest of the summer but were nowhere close to the ... » read more | |
| Friday Sep 6, 2024 | |
| The end of summer is near… although the heat is not quite done in the West yet. Temperatures are rocketing up in the short term with new highs for the summer, especially in Southern California. In the Pacific Northwest the Mid-C bilateral price just reached the highest mark since the start of summer. During these tight events the question of Resource Adequacy (RA) comes into play, and, in the case of the PNW we look at the Western Power Pool’s (WPP) Western Resource Adequacy Program (WRAP) as a program designed to improve reliability not only in the PNW but across the West. Figure 1 | West Daily Average CDDs by Region, Last Month and 15-Day Forecast The WRAP had a bit of a setback earlier this year with the announcement that the first binding season ... » read more | |
| Thursday Sep 5, 2024 | |
| The great divide is in play this week as the regional temperatures east of the Rockies are moderate while all regions to the west are dealing with extreme levels, including the coastal areas within Southern California. The population weighted average temperature level is record setting for the Golden State, topping the heat wave that moved through the state in early July 2024. Figure 1 | California Flat Average Temperature (F) Forecast California is not the only region displaying such heat as Alberta and British Columbia are quite hot for this time of year starting today and the Pacific Northwest peeled off the 100-degree highs last week for a day or two only to have such weather return on Wednesday and again on Thursday/Friday. It goes without mentioning that the ... » read more | |
| Wednesday Sep 4, 2024 | |
| It’s a story we’ve been following for a quite a while, since before the CPUC made their final decision on increasing the amount of gas allowed in Aliso Canyon. The ultimate decision made last fall was to increase the limit, leaving SoCal with an abundance of gas this spring and summer. Now, we’re entering the last few weeks of the summer season with the unofficial end to summer, Labor Day weekend, in the rearview. The story of SoCal’s excess natural gas storage isn’t done yet; it continues to impact the market as California braces for the next and, possibly, last heat wave of the quarter. In our most recent article, titled ‘Storage Galore and Demand No More’, we walked through the key shifts in market behavior and the nitty gritty details of the ... » read more | |
| Tuesday Sep 3, 2024 | |
| As summer draws to a close, energy demand typically begins to decline, leading us into the shoulder season. During the summer months, high temperatures drive up electricity consumption, resulting in higher load levels. This period is also characterized by typically lower wind generation, which raises net load (calculated as load minus renewable generation) and tightens grid conditions. Historically, as load decreases from its summer peak starting in September, wind generation begins to increase. To illustrate these dynamics, let’s examine the 12-month by 24-hour graph below, which shows load, wind generation, and net load over the past three years in SPP. Each year is represented by a different color line: blue for 2022, orange for 2023, and red for 2024. Figure 1 | 12x24 SPP ... » read more | |
| Friday Aug 30, 2024 | |
| In a previous blog this week, we referenced the growing amount of solar generation installed on the MISO grid, and how it is starting to have an impact on price formation. But just how much solar generation is there? Figure 1 | MISO Maximum Solar Generation by Year and Month The figure above shows the maximum solar output in MISO, in each month from 2020 through 2024 YTD (MISO reports zero solar generation until December of 2019). The reference line in each pane indicates the overall maximum solar output for the entire year. The image shows that solar buildout is happening at a rapid pace. The step up in maximum observed solar generation from 2023 to 2024 is the largest in MISO’s history so far. Between 2021, when solar first started getting added to regions besides the South, and ... » read more | |
| Thursday Aug 29, 2024 | |
| The underwhelming prices in ERCOT have been a frequent topic of conversation so far this summer, as even with new records reached in load and net load the day-ahead and real-time settlements have failed to live up to the hype. We have written about the supply components on the renewable side and how that has played out in price formation in our recent Special Report, “A Different Summer in ERCOT”, while recent market flashes have touched on the recurring underperformance of load relative to day-ahead forecasts this summer. Our latest Battery Report, “Clouds on the Horizon for ERCOT Batteries?” walks through the battery revenues in ERCOT this summer compared to 2023 and how bullish and optimistic expectations from earlier this year in the spring have ... » read more | |
| Wednesday Aug 28, 2024 | |
| In our blog last week, we wrote about the CAISO and ERCOT battery fleets breaking all-time dispatch records this August. This might make you think there were impressive arbitrage opportunities on those days, incentivizing more batteries to take advantage. This was certainly part of the story in Texas when real-time prices exceeded $1000/MWh. However, the real-time arbitrage opportunities for CAISO batteries weren’t exceptional on August 14th when the record was broken, although they were higher than other opportunities this August. In our latest battery report, titled ‘CAISO Fleet Growing Pains’, we discuss the conditions of the day and of August so far. Keep reading for a preview of the report or click the link above for access to the full writing. Figure 1 | Price ... » read more | |