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Friday Sep 1, 2023   
For me, 2023 is the year of the chicken. I’ve never thought more about chickens in my life. We all remember the short squeeze on eggs during the beginning of 2023. Google the words “price of eggs” and you will see dozens of articles bemoaning the spike in egg prices during 2022. Then you’ll see a gaggle of articles describing why the price is crashing or has crashed. The figure below shows the average price of a dozen eggs in US cities as calculated by the St. Louis Fed. Figure 1 | St. Louis Fed Egg Price Data   Prices began to rise in August of 2020 and then accelerated in November of 2021, reaching an all-time high of $4.82 per dozen in January 2023. A portion of the increase was driven by marginal cost – the price of chicken feed increased ... » read more
Thursday Aug 31, 2023   
While PJM is currently enjoying a stretch of cool weather that has reduced system load to below 100 GW for the daily system peak and should extend into the weekend, Mother Nature appears to have more summer heat in store early next week that could cause some excitement on the grid.  The temperature forecast has been trending upwards over the past several days for the period from September 4th through the 7th, starting on Labor Day and lasting through the first half of the week.  The figure below shows how the forecast has changed, displaying a matrix of each day’s 15-day outlook for a population-weighted PJM composite temperature, expressed as cooling degree days (CDDs).  Moving across the figure from left to right shows more recent forecasts, with the latest from ... » read more
Wednesday Aug 30, 2023   
Last week the ERCOT battery fleet set a new record dispatch by providing 1.8 GW to the grid. While 1.8 GW seems meager when considering total ERCOT load in the same hour was over 83 GW, it was a big jump in dispatch for the battery fleet. The previous record set on July 31st of this year was just over 1 GW, representing a bit more than half of the new high. The figure below shows the running maximum dispatch for the ERCOT fleet, as well as the average daily dispatch which still sits below 100 MW. With most of the battery fleet participating in the ancillary service market, dispatch to the grid for the growing battery fleet has been limited. The new maximum of 1.8 GW coincided with real-time prices up to the $5000 cap and a new record high net load. For more details on the event, you can ... » read more
Tuesday Aug 29, 2023   
The Alberta market was a focus last week as Monday was percolating as one of the tightest days the grid has seen all summer as heat persisted and wind generation was expected to be near its lowest levels seen in weeks.  The forecast was calling for a strong net load number during the mid-afternoon block of hours to which the system operators were needing all hands-on deck to keep things from falling apart.  With the lack of wind, Mother Nature left little doubt that the price action within the Alberta power market was going to tap the $900 plus mark for several hours on Monday.  We detailed the market fundamentals leading us to such a conclusion in the latest EnergyGPS Alberta Market Flash, titled ‘Emergency Alert Level 3 Called in Alberta’ Figure 1 | Alberta ... » read more
Monday Aug 28, 2023   
Warmer weather is back in the fold across Southern California after a week ago saw the first tropical storm moving off the Pacific Ocean water and make landfall which resulted in plenty of precipitation, flooding and landslides throughout the region and the Desert Southwest. Figure 1 | Atmospheric G2 Temperature Forecast – CAISO The mini-heat wave looks to last through Wednesday with the likes of Burbank and other LA Basin demand centers seeing triple digits while the Desert Southwest is looking at daytime highs above the 110 degree mark once again with a high of 115 degrees tomorrow.  Once the month shifts to September, Mother Nature has the temperatures transitioning to more of a blue color setting which means cooler temperatures.  The heat brings with it some concern ... » read more
Friday Aug 25, 2023   
Last Thursday, August 17th, ERCOT set a new record for peak net load, as HE19 maxed out at just over 70 GW. At 10.4 GW of combined wind and solar output, this was not quite the hour with the lowest total RE generation (HE20 had only 9.7 GW, essentially all wind), but it had the right combination of generation and load to break the net load record previously set in August 2019 by about 2 GW. This caused prices to clear at or above the $5000/MWh cap for about 1.5 of the tightest hours. Figure 1 | ERCOT North DA and RT Prices, Net Load, and Wind The graph above shows every non-Uri day since 2018 where at least one hub price averaged at least $4500 for at least one whole hour. Three of the days are from August and September 2019. Two are from May and July 2022, one is from this past July ... » read more
Thursday Aug 24, 2023   
The summer of 2023 has been a challenging one for the Pacific Northwest Hydro system.  In an earlier Newsletter Special Report back in mid-May, “Massive May MAF for PNW Hydro”, we discussed the events that transpired this spring that put the Northwest in a precarious situation heading into the summer.  In our most recent Newsletter Special Report, “Hard Summer Choices for PNW Hydro”, we break down the operations that have been used to support hydro flows and generation output this summer, and the impacts these tradeoffs could have moving forward.  Over the summer so far, hydro output has outperformed what one would typically expect the system to produce based on natural runoff over the last two months.  When looking at unregulated flows, which ... » read more
Wednesday Aug 23, 2023   
The Alberta market was off to the races yesterday (Tuesday, August 22nd) as temperatures drove up the overall power demand all the while Mother Nature delivered little wind output.  This left the net load numbers at a level that warranted higher prices in the real-time market. Figure 1 | Alberta Net Load Components – Hourly The graph above illustrates Alberta’s power demand hourly profile in the top pane where the middle pane details the real-time load deviation while the bottom pane represents the wind output.  What is clear is the system operators are thankful that the power demand from 8/17 did not show up at the same time the wind profile associated to the 22nd as the combination would have delivered a record setting net load profile.  Sticking with the ... » read more
Tuesday Aug 22, 2023   
The heat dome impacting the ERCOT grid over the past several weeks continues to hit the SPP footprint as both the North and South continue to see stout implied heat rates as the net load numbers are record-setting.  Figure 1 | SPP Net Load Profile – Hourly The EnergyGPS SPP Morning Report detailed last week how the SPP market was percolating this week as the forecast was calling for record-setting net load numbers coming out of the weekend.  The script has been playing out as Monday’s heavy load settles topped triple digits for both regions while the light load moved deeper into the gas stack.  Tuesday saw SPP-North’s heavy load settle hold at the $110 mark while SPP-South shifted down $20 to settle at $95.  Natural gas cash settles did not deviate ... » read more
Monday Aug 21, 2023   
The weather pattern seen over the past few years has changed the way we look at things as events like Storm Uri were known to hit the Midwest or Northwest in the middle of February, not the South Central (specifically Texas).  Hurricane season runs from early summer to late fall and typically has a focus on the Atlantic Ocean and the Gulf of Mexico.  Many of us remember what Hurricane Katrina did to the Gulf Coast as the massive push of water broke several levees and almost destroyed New Orleans. Figure 1 | Storm Uri and Hurricane Katrina This summer has delivered fires across Canada where the flames are destroying acres of government land and the smoke filled air is circulating around the world with a jet stream moving N to S delivering bad air quality from the Northeast to ... » read more
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