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Tuesday May 18, 2021   
Last Thursday the Center for Disease Control (CDC) made an announcement that those who have been vaccinated are able to resume indoor and outdoor activities without the need to wear a mask or social distance. Many states had already lifted such restrictions but now that the official guidance has been released a number of states, particularly in the center of the continent lifted the mandates that were imposed more than one year ago. It only took a few hours for the public to react. Over the weekend I was out on the town and most if not all people across Cincinnati had dropped the masks and were enjoying the sunshine. Sidewalk cafe's were packed and local news stories showed lots of smiling faces as communities were allowed to gather once again.  Figure 1 | The ... » read more
Monday May 17, 2021   
The power grid continues down the path of moving towards more renewables across the country and the push to retire the likes of coal, old inefficient natural gas and in some cases nuclear facilities.  In today's blog, we dissect the MISO market where there are some subtle shifts that are noteworthy as well as they lay the foundation of what is to come over the next few years as the push to retire coal is real and it is being replaced by the likes of solar and the new technology of batteries.  Figure 1 depicts the EIA-860M January Release, the red arrow in 2022 panel shows 6492 MW of coal plants planned to retire in MISO. The same arrow in Figure 2, depicting EIA-860M February release, shows a fall in these planned retirements to 6222 MW. This delta in MW can be attributed to the ... » read more
Friday May 14, 2021   
We recently discussed the increasingly serious dry conditions in both the Pacific Northwest and California towards the end of last month in our Newsletter Article “Drought(ing) the Summer……”.  Throughout the first half of May, the situation in the Pacific Northwest has only grown more extreme.  Precipitation for the entire Columbia River system for the month so far is under 50% of what we see in an average year.  Since the beginning of March, the Northwest River Forecast Center’s (NWRFC) forecasted water runoff at The Dalles for the April through July period has fallen steadily, reaching a new low since the beginning of the water year last October with Thursday’s forecast.  Let’s focus in on the Snake River Basin, where the ... » read more
Thursday May 13, 2021   
Many of you probably already receive Gary Ackerman’s newsletter, the Friday Burrito, if your employer is a member of the Western Power Trading Forum (WPTF). For those of you who don’t, it is a thorough and grounded but often humorous look at the weekly hot topics in the Western US energy markets, and we highly recommend giving it a read, even if you must land a “hot” copy from a friend. This year, a few of us analysts here at EnergyGPS have decided to have a bit of fun and really hone our guesses for the annual CAISO curtailment competition. Every year, Gary offers a cash price for anyone who can accurately predict the total quantity of renewables that will be curtailed in CAISO by the end of the year. We were in the mood for some light-hearted analytics, and we ... » read more
Wednesday May 12, 2021   
The AESO market has featured some unprecedented price strength and volatility this spring, largely due to an enormous amount of gas-fired generation capacity on outage.  However, those outages are winding down, which should take some of the steam out of the Alberta Power Pool pricing until summer kicks in. AESO daily flat average power prices this April and May have been their strongest for those months in at least six years.   While loads are showing a modest recovery to last year, they have not yet outpaced 2019 or 2018 levels.  Wind generation for both April and this month-to-date has been in line with previous years.  Yet, daily and hourly wind output has remained highly volatile.  When it drops, the burden of serving load shifts to AESO's thermal ... » read more
Tuesday May 11, 2021   
It has been one year since the pandemic hit. Lives across the world have been in an arrested state as school closures, work from home orders and travel restrictions hit our continent. By and large these measures are lifted across the country but has daily behavior and the economy recovered? At EnergyGPS we get the privilege to talk to market participants all over the continent and one of the central themes over the past year is the impact of the restrictions on daily life and of course energy fundamentals of the immediate region. By looking at some of the temperature regressed power demand the conclusion is that the impacts are a mixed bag. Some areas of the continent have made more than a full recovery and some, due to ongoing societal restrictions are yet to see demand ... » read more
Monday May 10, 2021   
Depending on your age, there are several places that the saying 'Game On, Game Off' come into play. In my case, it goes all the way back to the Wayne' World where an intense version of one-on-one street hockey took place only to be disrupted by honking cars.  Wayne and Garth would ultimately grab the hockey net and move it to the side of the street as they watch the car go by (Game Off), only to drag it back into the middle of the residential street and yell 'Game On' to which the 'match' continued only to be disrupted my many other things over a period of time. Figure 1 | Game On, Game Off If you are a football fan, specifically a Baltimore Ravens or San Francisco 49ers loyalist, you can recall the 2013 Super Bowl where the two Harbraugh brothers (John and Jim) coached against each ... » read more
Friday May 7, 2021   
ERCOT forward pricing has always been a 'tale of two curves'. As anyone who tracks the ERCOT market knows, forward prices in the prompt year or two are based on expectations of marginal cost combined and scarcity. After the first couple of years, the forward curve rapidly declines, often reaching low levels in the out years. Figure 1 depicts the forward ERCOT North Peak (blue) and Off Peak (orange) curves as of January of each year. That is, the top pane shows forward curves as of January 2018 where the y-axis shows price in $ per MWh and the x-axis shows future years, the next pane shows curves as of January 2019, and so on. The pattern is consistent. The front of the curve is high and the back of the curve is much lower, regardless of the overall price level.   The front of the ... » read more
Thursday May 6, 2021   
Since the start of the year, the market conditions in California have been such that the Diablo Canyon Unit 2 facility was sitting on the sidelines most of Q1 and then the refueling period occurred as we rolled into Q2-2021 as well as the fact that the lack of hydro generation was being formed by Mother Nature.  Both of these took what we know as baseload energy off the grid that was essentially a price taker when it comes to putting megawatts on the grid each and every hour.  The nuclear output is pretty consistent at 1.15 GWa while the hydro hourly profile has flexibility where the midday period is the low point while the evening ramp kicks into the highest gear the operators have as they try to capture the higher priced hours as the sun is setting. Figure 1 | ... » read more
Wednesday May 5, 2021   
Mexico is hot again, both literally and figuratively.  Daily exports to Mexico have been repeatedly topping 6 Bcfd, lifting month-to-date levels about 0.9 Bcfd above last year, including many recent days of new record highs.  With another early-season heat wave currently hitting the country, chances exist for another round of record-breaking border flows.  In addition to the Mexican summer – the country’s peak gas demand season – approaching, there are a handful of structural influences that will contribute to driving year-on-year export growth.  This is putting Mexico back atop the list of big market discussions this summer, a notable return from the past couple of years when interest in Mexico seemed to taper.  Political changes in the country ... » read more
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