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| Tuesday Mar 25, 2025 | |
| The arrival of spring marked more than just a seasonal shift—it brought a surprising change in the natural gas market, as we discussed in our latest article titled “Back to Square One”. After a long winter of steady withdrawals, the latest EIA storage report revealed a return to net injections, catching the market off guard and triggering a sharp price drop. As we head into Summer 2025, all eyes are on how demand will evolve in this new landscape. This past winter, despite global warmth, delivered colder-than-usual temperatures across much of the U.S., leading to the strongest storage drawdown seen in three years. Now, with storage volumes significantly lower than last year, the race to replenish supplies is on—offering both opportunity and volatility for producers ... » read more | |
| Monday Mar 24, 2025 | |
| In the chaotic world of power, one of the most reliable relationships is between demand and temperature. Cold temperatures generate heating demand, and warm temperatures generate cooling demand. But what about the middle? Flat average temperatures around 65 degrees, meaning a little above room temperature in the day but not to cold at night, signal a low point for demand, something of a goldilocks zone where everyone is comfortable without turning on any switches or spinning any knobs. And as we speak, the West looks very comfortable. Figure 1 | CAISO Demand (MW) vs Temperature (F), February through April Our first figure shows the relationship between temperature and power described above for California. Points in yellow represent days in 2024, and blue is 2025. Triangles stand for the ... » read more | |
| Friday Mar 21, 2025 | |
| “Everyone talks about the weather, but nobody does anything about it” goes the quip, frequently attributed to Mark Twain, but really - who knows? If the available photo catalog tells us anything, Mark, a southerner by birth, stayed cool on warm days in his senior years in signature white linen suits, enjoying a cigar, and not worrying too much about his hair. Figure 1| Mark Twain Staying Cool and Looking Cool Times have changed and today, in much of the US, people certainly do something about the weather when it gets hot: they turn on the AC. With the annual variations in weather, it can be difficult to accurately assess electric load growth. In recent weeks, EGPS released two special reports relating to ERCOT load to parse ... » read more | |
| Thursday Mar 20, 2025 | |
| The spring season brings with it volatile weather conditions, especially within the South Central region known as ERCOT. Over the past couple of days, we have seen temperatures rise to 82 degrees in Houston while inland topped the 85 degree marker, which in turn had an impact on the actual load profile. On the supply side, wind generation has been stout earlier in the week while yesterday saw a slight shift down. There has been congestion in play from West to all other trading hubs as the stout wind stitched together with some transmission constraints led to the midday and evening ramp prices to diverge from the rest of the grid. Today’s wind level has shifted dramatically lower while the power demand profile is muted as temperatures are looking to pull back ... » read more | |
| Wednesday Mar 19, 2025 | |
| In our last blog about Alberta, we focused on the cold during the month of February. It was the coldest since 2021 with over 1400 cumulative HDDs. By the end of the month, temperatures flipped warmer than normal, and the trend carried through a good portion of March. Over the weekend, there was another short stint of cold days. Heating demand rose while wind generation fell, but ultimately, the grid had more than enough megawatts to go around. Now the province is looking forward to some warm weather as the season transitions from winter to spring. Figure 1 | Actual Temperatures and Differences from Normal for Alberta Just in time for the first day of spring, Alberta is expecting well-above normal temperatures. Today highs are expected to be over 40 degrees, as shown below in the forecast ... » read more | |
| Tuesday Mar 18, 2025 | |
| The U.S. power grid is undergoing a major transformation as renewable energy adoption accelerates across all independent system operators (ISOs). Areas with minimal past renewable energy generation are now experiencing a surge in solar and wind projects, while long-established renewable markets are expanding their energy mix. This shift is reshaping grid dynamics, market behaviors, and energy price trends. However, as more solar and wind capacity is added, the value of these resources declines due to price suppression during peak generation periods, raising critical questions about long-term market impacts. Figure 1 | Renewable Market Share Over Time for US ISOs This annual whitepaper builds on our previous analysis from March 2023, incorporating two additional years of data and ... » read more | |
| Monday Mar 17, 2025 | |
| Spring is often thought of as a season of rebirth, as the greys and browns of winter turn into the greens of new leaves and the kaleidoscope of colors we catch with the first flowers. The infrastructure of both power and gas market go through their own rebirths in this stretch of time. Instead of the “season of love” we refer to this stretch of time as “outage season”. With winter over, and summer still a ways away, we sit at a consistent lull in terms of demand. That gives us all the opportunity to get done much needed repairs. However, out of action pipelines, transmission, and generators create their own challenges. With so much supply out of action, otherwise unimpressive stresses on the system can quickly create tight conditions. Spring for the power and gas ... » read more | |
| Friday Mar 14, 2025 | |
| JP Morgan recently released its 15th Annual Energy Paper titled “Heliocentrism – Objects may be further away than they appear.” The theme of the report is that energy transitions take a long time (objects may be further away than they appear) and those who believe that rapid growth in solar and energy storage (heliocentrists) will render the need for complementary thermal power generation unnecessary are mistaken. The report has a large dose of Vaclav Smil thinking and is well worth the read. The report had one figure which caught my attention. The figure below, which relies on data from NERC, shows MISO’s reserve margin declining over time. If my memory is correct, the lowest reserve margin I’ve seen from a NERC Summer Assessment or Winter Assessment is ... » read more | |
| Thursday Mar 13, 2025 | |
| Tariffs and trade wars have dominated the news cycle for much of the past two weeks, kicked into high gear upon the announcement of new taxes on imports from Canada and Mexico, including a 25% charge on many goods and 10% on trades tied to the energy space. Since then the talk among market participants has been rife with uncertainty given the back-and-forth between the Trump administration and the US’s international trading partners—each day new announcements coming of exemptions to a new set of goods or delays pushing back some of the tariffs until later in the spring. We also saw Canada announce retaliatory taxes in response, including Ontario announcing a 25% surcharge on electricity flows into the US earlier this week on Monday, only to backtrack hours ... » read more | |
| Wednesday Mar 12, 2025 | |
| The ERCOT battery fleet is close to a breakthrough as the fleet attempts to cross the 5.0 GW dispatch record for the first time. The figure below is featured in our ERCOT daily battery dashboard. The blue represents charge from the ERCOT battery fleet while the orange represents discharge. The red is real-time hub price. We’ve covered the transition of the ERCOT fleet from mostly participating in the ancillary service market to attempting to capture day-ahead and real-time arbitrage in the last couple of years. The echoing of the real-time price shape in the discharge pattern shows how far the fleet has come in entering the day-ahead and real-time markets, as higher prices result in higher dispatch from the fleet. Last Wednesday and this Monday both saw triple-digit pricing in ... » read more | |