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Monday Nov 14, 2022   
There was a time when the power markets traded in quarter and fifty-cent increments across the country, but those days are long gone as it is the natural gas space that has taken over the reigns of trading in such blocks.  Yes, you heard that correctly, the prompt month natural gas contract is not associated with quarter and fifty-cent moves rather than pennies and nickels.  For example, as of the early morning trading on November 14th, the prompt month Nymex contract (December 2023) is up $0.40 to place its outright level at $6.28.  This was after a holiday session the previous Friday saw the same month’s value move down roughly $0.30 on light trading. Figure 1 | Nymex Prompt Month Contract Source: CME Trading Platform There are several reasons for such volatility ... » read more
Friday Nov 11, 2022   
One problem that arises when considering the future value of a renewable resource is figuring out what the average price of electricity is likely to be over the next five, ten, or even twenty years. But even assuming that’s solved, another problem is figuring out how much of that average price a given renewable resource is likely to actually earn. Solar and wind, depending on the market, location, and a variety of other variables, often tend to generate more or less when the price is routinely higher or lower than average. For example, solar in California is only able to generate during the daytime when prices are low, or, on the other end of the spectrum, solar in Texas profits from price spikes tied to high demand during sunny afternoon hours. Estimating this can be tricky. There ... » read more
Thursday Nov 10, 2022   
Tuesday night people across the country plopped down in front of their televisions and computers as election results rolled in to watch as the lines across the map filled in blue or red with the announcement of each winner.  Americans tuned in to see if it was a red wave or a blue wave resulting after a long political campaign season.  Results are still being tabulated, but the one thing that is certain is that the Pacific Northwest won’t be dealing with a red wave where the weather is concerned. Figure 1 | 2022 House Election Map From the New York Times 2022 Election Map The region is in the midst of a blue wave of chilly temperatures and strong river flows ever since the atmospheric river swept into the region late last week.  The figure below shows a matrix of ... » read more
Wednesday Nov 9, 2022   
In the first week of November, following Nymex has been like riding a roller coaster. Usually moves are made in pennies, but the last week has been trading in quarters and 50 cent pieces. In October, Nymex wasn’t quite as volatile, but it certainly had its ups and downs. In our recent monthly report ‘Falling Only to Rise Again’, we explored the rises and falls of Nymex last month as well as power burns and other trends in natural gas and power markets across the country. Read on for a sneak peak into October’s monthly report and email if you’d like to receive the full November report straight to your inbox. The prompt month for Henry Hub fell for much of October, continuing the late summer trend as production was putting molecules onto the ... » read more
Tuesday Nov 8, 2022   
The natural gas market is absorbing the simple fact that Mother Nature is showing a cold weather pattern that will sweep across North America over the next 15-days and potentially through the end of the month.  This type of pattern has re-vitalized the front of the Nymex future market as the December 2022 contract was up over a $1.00 since Friday morning in yesterday's session.  That meant that December carried a $7.00 handle at one point in the session only to settle in at $6.94 as of Monday's close.  Prior to the polar vortex type weather making its way into the Lower 48, it is starting up in Western Canada as this week is showing well-below normal temperatures across British Columbia and Alberta.  For example, temperatures in Alberta have fallen to 28 degrees F ... » read more
Monday Nov 7, 2022   
If you recall, this past Labor Day weekend put on display some heat that pushed the CAISO power demand profile to the brink of disaster.  If it were not for the simple fact that the CAISO pushed real-time alerts to consumers for conservation, who knows how things would have turned out.  These are the times we are currently dealing with as Mother Nature continues to deliver extreme weather events that test both the power and natural gas grids across the country.  This week the script is tied to winter-like weather, not the scorching heat. Figure 1 | 15-Day Pacific Northwest Degrees from Normal Forecast Matrix The Pacific Northwest is looking at their overnight lows dipping down into the low 20’s and the further north you travel the individuals living there are looking ... » read more
Friday Nov 4, 2022   
Without ever spending much time in the spotlight, SPP is managing to rack up intervals where the amount of wind generation exceeds the total demand, which has been highlighted in the EnergyGPS daily content delivered to clients along with the Newsletter Platinum Plus Renewable Monthly Report, titled 'September/October - Gone With the Wind Part 2'.  As we roll into the month of November, the situation continues to worsen if you are a wind generator sitting on the front line as the North zone sends a negative price signal in the early morning hours as the only option is to curtail the renewabe resource.  Down in the South region, we see more local issues as the generation cannot get to the demand centers thus other resources, such as natural gas units, are needed to balance the ... » read more
Thursday Nov 3, 2022   
One week ago we wrote about the transition about to occur in the PNW hydro system.  With the month of October giving way to November, the annual Chum operation was coming back around, which marks a switch from operations to refill the reservoir at Grand Coulee Dam to extra releases from the dam in order to increase the flows and elevation further downriver.  Over the past week, things have played out as we described with Grand Coulee outflows doubling from 52 kcfs on the 30th to over 100 kcfs this Tuesday.  River flows also received some help from the weather as the Pacific Northwest also saw some decent precipitation move into the region, as every Portlander who had the pleasure of drying off sopping wet children and their costumes after making the Halloween ... » read more
Wednesday Nov 2, 2022   
Grid operators felt tricked in Alberta this Halloween as the wind fell below the forecast. The grid was already expecting some tightness for the morning ramp with wind generation expected to fall from 1.5 GW early in the morning to 0.4 GW by noon. Instead, wind played its trick by dropping to a meager 0.2 GW by hour ending 10 and under 0.1 GW by hour ending 12. Net load, shown in the third panel down in Figure 1, was supposed to peak under 9.7 GW, but instead pushed up to 10 GW with wind slowing ramping up over the next few hours. Figure 1 | Load, Wind, Net Load, Thermal Outages, and Prices Power prices signaled the scarcity by shooting into the triple-digits. As the wind fell in the morning, price moved past the forecasted pool price by more than $50 starting in hour ending 6. » read more
Tuesday Nov 1, 2022   
When the Freeport rupture occurred back in June it threw the entire natural gas market into a tailspin. in its wake the facility would be shut down for an extended duration as safety concerns itemized by the PHMSA were addressed. As a result 2 BCF per day of rejected feed gas was backed into the Gulf balancing helping the storage balances to recover from a very large year on year deficit. The last time Freeport LNG LLC provided an update to its return was back on August 23 when they predicted a start up date in early to mid November with full operations by the end of the month. Well, November is upon us and there have been no further updates from Freeport which leads us to believe that the restart continues to be on track per the original time line. But we caveat the sentiment that the ... » read more
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