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| Monday Sep 16, 2024 | |
| September in the West came in like a lion and now looks much more like a lamb. Extreme heat quickly faded to average to below-average temperatures. Nowhere has this been more true than southern California, where the LA basin hit highs in the 100s just over a week ago and now the forecast calls for a long stretch maxing out in the mid-70s. SP15’s power markets went through the same see-saw with those 7 days making the difference between the highest prices of the year and negative settles. Figure 1 | SP15 DA & RT LMP The above figure shows SP15’s hourly LMP in the day ahead market (blue bars) and two stages of the CAISO real time market (yellow and red lines). For the first time in a while the day ahead market hit negative settles, then the subsequent real time market ... » read more | |
| Friday Sep 13, 2024 | |
| In reviewing the August Monthly Renewable Report, I was reminded of a scene from Woody Allen’s 1977 Academy Award Best Picture Winner, “Annie Hall”, shown in Figure 1. In the film, two elderly ladies are complaining about the food at their hotel in the Catskill Mountains. One mentions that the food is terrible, to which the other responds, “I know, and such small portions!” Figure 1| Annie Hall Movie poster, 1977 What’s the connection? The last three months for solar as-gen pricing in CAISO and ERCOT have seen smaller and smaller slices (capture ratio) from a shrinking entrée (RTC), as illustrated for ERCOT in Figure 2 below. The solar weighted price for ERCOT Houston in August 2024 was $32.32, compared with ... » read more | |
| Thursday Sep 12, 2024 | |
| It has been well established that renewable penetration in market leads to changes in thermal dispatch. Increased solar capacity in particular leads to a glut of supply in the middle of the day, drives down midday net load and stretches the net load/thermal demand evening ramp as solar falls off a cliff in the late afternoon. We have observed the pattern clearly in ERCOT so far this year. Most of the attention for changes to thermal dispatch behavior usually falls on an ISO’s natural gas fleet. But in ERCOT, starting back in the final quarter of last year, we saw significant changes to how the states coal units were utilized. This was the topic of a Special Report back in January, “ERCOT’s Hazy Horizon”. Our latest Article ... » read more | |
| 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 | |