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Thursday Mar 2, 2023   
Things are changing quickly for the Pacific Northwest Hydro system, with the signs all pointing to an increasingly dire situation for the month of March and into the spring.  After a mixed experience over the month of February that included very low levels of precipitation in central Oregon and Washington as well as much of southern Idaho but also some much-needed rain and snowfall up in the higher elevations in British Columbia and the Upper Snake, the outlook is dry for the first 10 days of March.  Even with the pockets of strong precipitation high in the system, river flows through the month of February were quite limited, keeping generation quite modest.  The figure below shows precipitation for the month of February in the left-hand pane, while the right-hand pane ... » read more
Wednesday Mar 1, 2023   
The cold winter days in Southern California are offering a unique opportunity for SP15 batteries, but the fleet doesn’t seem to be taking the bait. As we saw at the end of the fourth quarter in 2022, blue in the forecast often translates to higher heating demand and higher prices for the morning ramp. We covered how batteries responded in November to the morning price peaks in ‘Batteries and the November Blues’. Now Southern California is facing a 15-day forecast awash with below-normal temperatures through the beginning of March after an unusually wintery weekend with snow falling in LA. The trend of higher SP15 real-time morning prices is present, sometimes even surpassing evening peak prices. With the ongoing cold, the trend looks to continue. In this article ... » read more
Tuesday Feb 28, 2023   
One year ago the Lower 48 natural gas storage situation was vastly different than what has developed this year. The inventory ended the winter season at 1.6 TCF which was below the historical average. But because of the lack of production growth, demand gains and the pull of LNG exports the forecasted inventory for the end of the 2022 injection season was at a historical low of only 3.25 TCF. Along the way to filling last summer a number of changes occurred including the Freeport shut down which backed 2 BCF per day into the storage balancing. From the date of rupture to the end of the injection season the balancing was positively affected by a total of 270 BCF allowing the end of season to end up at 3.6 TCF. This year the inventory does not need a Freeport Hail Mary to have adequate ... » read more
Monday Feb 27, 2023   
The colder weather pattern hit Southern California over the weekend as snow flurries were reported in counties that have not seen such in decades.  In the Pacific Northwest, Portland folk woke up to 18-degree temperatures to which is a record for this time of year while Seattle was a few degrees colder.  Looking down the Columbia River Gorge, La Grange showed an overnight low of 9 degrees with a high tapping 21 degrees.  Watching the local news, the meteorologists described what is in store Sunday morning of which ended up being summarized with 1-4 inches of new snow with the coastal region getting 6-8 inches while inland is not going to see much when it comes to flurries but will remain quite cold. Figure 1 | Atmospheric G2 NWPP ... » read more
Friday Feb 24, 2023   
Back in December of last year, we published a Newsletter Special Report discussing SPP curtailments. At the time, curtailments for 2022 had just reached 10,000,000 total MWh. The year finally ended with right around 15,000,000 MWh of curtailed wind energy. Figure 1 | SPP Renewable Curtailments, 2018 – Present    This graph shows cumulative renewable curtailments for each year from 2018 through the present. Since it’s SPP, the curtailed MWh are overwhelmingly wind (solar penetration in SPP has been sitting right around 0.2% for several years). The current year is visible as the brightest blue line, and so far it’s tracking the 2022 curtailments closely. Given this, we wanted to take a closer look at SPP’s wind penetration rates and the corresponding price ... » read more
Thursday Feb 23, 2023   
The attention on CAISO supply stack has been intense so far this winter, with the ISO needing to focus more on within-state generation sources than is typical.  We’ve documented over the past six months the transition that is taking place in the West where structural load increases and changes to the Pacific Northwest hydro system such as stricter fish spill requirements have left the Northwest facing tight grid conditions more often than in the past.  Throw Washington’s carbon program into the mix as well along with a dry and low 2023 water year and the result is a state of affairs that has Mid-C pricing over California’s hubs on a regular basis.  In our recent Newsletter Special Article, “California’s Healthy Hydro”, we dive into ... » read more
Wednesday Feb 22, 2023   
Volatility was the name of the game in Alberta last week. Peak power pool price ran over $400/MWh in 6 out of the 7 days from Monday, February 13th to Sunday, February 19th. For three of those days, price ran over $790/MWh. All of these highest peak price days saw volatility in the wind generation (second panel down in Figure 1) which dropped significantly during some of the highest demand hours of the day. On Monday, the expected drop in wind generation came a few hours early, causing havoc as net load jumped 600 MW higher than planned for. Valentine’s Day saw the highest peak net load at 10.8 GW bringing pool price to $792.26 while Saturday’s prices sat under $50 for most of the day before hiking over $800/MWh when wind dropped. Figure 1 | Alberta Hourly Breakdown – ... » read more
Tuesday Feb 21, 2023   
The 2023 European winter was supposed to be a disaster as a year ago is when Russia invaded Ukraine. During the initial stages of the war, Russia intended to use its energy influence as a weapon against a European response as natural gas flows were being curtailed and news around what might be next was in play. For the first time since World War II there was conflict in Europe and the energy supply was the battlefield. The NordStream 2 sabotage sent a signal to the world that not only could pipeline flows be curtailed but the entire network into Europe could be destroyed. The risks sent natural gas prices to record levels on three continents in a scramble to secure molecules ahead of this winter. The Q1 Dutch TTF futures prices broke $101 US/MM in the aftermath of ... » read more
Friday Feb 17, 2023   
A simple way to describe one set of services our consulting practice offers is we help electricity assets economically plug into the wholesale electricity markets. On the supply side, this often takes the form of helping renewable projects estimate future wholesale revenues, costs, and risks. We also do a lot of work on the demand side, notably for large technology companies. They want to know the opposite side of the same coin – the cost and risk of the RECs that they are purchasing. A fun part of the consultant’s job is seeing the new solutions that are coming down the pike. We’ve looked at long distance transmission a number of times. While some of these large transmission projects will have their moment in the sun, in most parts of the country the renewable by wire ... » read more
Thursday Feb 16, 2023   
The Pacific Northwest is dealing with some cool weather at the moment and staring at a big block of cold up ahead starting in the middle of next week with Portland and Seattle’s temperatures expected to fall down into the low twenties overnight and below-zero temps up in Montana.  Mid-C is at a premium to the other hubs in the West as the Northwest is sending a signal to keep megawatts at home with the tight grid conditions or else incentivize increased production from the region’s hydro system.  So far, apart from the brief spike in output at the very beginning of the month, Northwest hydro has been very limited, averaging just 11.3 GW so far in February, more than 4 GW lower than last year. Figure 1 | PNW Daily Average Hydro Generation (MW)  The current ... » read more
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