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Tuesday Jan 24, 2023   
Canada has been suffering the same fate as the Lower 48 for the month of January. Most of the country has seen record warmth keeping the gas demand subdued. Alberta consumption on the Nova system has averaged only 6.7 BCF per day which is .6 BCF lower than expected for a typical January. Total natural gas storage draws have been only 19 BCF through the first 24 days of the month. If the temperatures had cooperated the system would have drawn double that amount. For weeks the lack of storage activity looked as if it would erase the year on year inventory deficit. Coming into the month the inventory was at a five year low and 40 BCF behind last January's levels. That is now down to only 8 BCF after just a few weeks.  Figure 1 | Alberta NG Storage Inventory for 2020 - 2023 But that is ... » read more
Monday Jan 23, 2023   
The situation in CAISO (and much of the western United States) that is producing natural gas prices consistently above $20 per MMBtu and pushing electricity prices far above seasonal norms.  The last couple of months CAISO has been experiencing a significant deficit in import megawatts flowing into its system from the Pacific Northwest (and recently the Desert Southwest with the Palo Verde line derate) compared to previous winters.  The cold and dry weather in the Northwest produced lackluster river flows, limiting PNW hydro production and forcing the Northwest region to reduce transmission flows South to keep more of the needed MW at home.  The new Washington carbon regime has complicated transmission deals as well.  All these factors are forcing CAISO to rely heavily ... » read more
Friday Jan 20, 2023   
The rains hitting California have received a lot of news this year – and for good reason. Epic storms have caused property damage, flooding, and sadly, loss of life. The state, which has been in a multi-year drought, is getting too much of a good thing. The image below shows state-wide Snow Water Equivalent (SWE) expressed as a percentage of normal where 100% is equal to April 1st SWE on an average year. April 1st is selected as the benchmark date because that is typically when SWE hits its maximum for the season. Figure 1 | California Snow Water Percentage of Normal The SWE for this season is already above the maximum for the last several years and is about 120% of an average April 1st level. This is good news for California reservoirs and California hydro production. The figure ... » read more
Wednesday Jan 18, 2023   
It has been well documented in the local papers that California natural gas prices have been at extremely high levels since the start of the winter season.  The reason for such a move starts with the Pacific Northwest power market pricing itself to keep megawatts at home due to the regional hydro landscape fundamentals starting the new water year out quite dry.  Throw in the fact that the weather pattern was below normal throughout November and well-below normal the last month of 2022 in across the entire West.  The combination of the two weather-driven events put a lot of pressure on the California natural gas entities PGAE and SoCal Gas as their transport volume was not enough so the in-state thermal stack was needed to balance the power demand for both CAISO and ... » read more
Tuesday Jan 17, 2023   
Start your engines. Why do the largest changes in weather forecasts happen over long weekends when the market is closed? Since Friday a pattern change has been confirmed and intensified as a polar event is developing in the western half of the continent. In just a few days time the total heating degree count has climbed from 382 to 411. This change takes the HDDs back to climatology but the cold is skewed in the EIA Pacific region with the biggest departures showing up in the Rockies and Intermountains. The rest of the continent is closer to normal. As a result the pre market NYMEX HH futures are up 35 cents or 10% since Friday to $3.77.  Figure 1 | Lower 48 Heating Degree Day Forecast Matrix (Jan 2-Jan 16) Note that the cold is focused on the Western half of the continent in a ... » read more
Friday Jan 13, 2023   
It’s time for our 2022 renewable awards issue of the Energy GPS blog. What a year it was. The corporate sustainability groups are now profit centers. CFO’s at these corporations are preparing to explain to Wall Street where the millions of dollars of favorable vPPA settlements came from. The operations groups at renewable IPP’s with merchant exposure are reporting favorable results each month. The new “strategy” for renewable projects is to “go merchant” if you can. High prices can cut both ways. Some projects with regional basis risk have been crushed by the spreads – this has been especially true for projects with basis exposure in SPP North or ERCOT West. But, on the whole, a rising tide lifts all boats – and the tide was high in US ... » read more
Thursday Jan 12, 2023   
Even as the weather has started to change over the past couple of weeks, energy markets in the West continue to bear the fruit of the abnormally cold and dry fall and winter leading up to this point.  From California all the way over to Utah is enjoying the buckets of precipitation and snowfall from the atmospheric river phenomenon that has turned on the spigot to California river flows as well as snowpack in the Sierras and southern Rockies.  The entire West has seen the thermostat climb as January has delivered conditions as warm and mild as they were frosty and cold in the preceding months.  The changes are lessening the squeeze, but after a dry and frigid end to 2022 the effects are still very present in the form of depleted natural gas reserves—especially for ... » read more
Wednesday Jan 11, 2023   
Each year goes out with the bang of fireworks as people celebrate the new year across the world. The end of 2022 was marked by more than the bang of pyrotechnics with a winter storm that raged during the holidays and western natural gas prices rising at an astronomical rate. In Alberta, the Pacific Northwest, and California, the extended and bitter cold throughout the month culminated in a battle of the megawatts as the whole West felt the rising heating demand. CAISO’s thermal fleet took the brunt as high price signals in surrounding regions pulled from the ties. Alberta hit a historic record of demand triggering emergency alerts while the Pacific Northwest competed for megawatts with their own ice storm just before Christmas. The eastern side of the country saw their fair share of ... » read more
Tuesday Jan 10, 2023   
Starting around the holiday season (end of December) and continuing on into the New Year, PJM coal output has done adisappearing act. The climb seen in December 2022 can be attributed to the simple fact that the region was staring at an extreme weather pattern leading up to the holiday season.  Once that storm passed, Mother Nature reversed her course by bringing warmer weather into the fold to which quickly dropped the net load numbers across the region. Due to retirements over the years and the moderate weather, the current coal megawatt output is record breaking to start the year and it comes at a time when natural gas storage inventories across the regions have started to swell.  Since the thermal stacks have been evolving over the years as more coal plants retire ... » read more
Monday Jan 9, 2023   
The ERCOT grid has plenty of sunshine to go around, hence why so many people enjoy living in the Lone Star State.  Over the years, solar farm developers have enjoyed the blue skies as well given the overall capacity being captured by the sun’s rays has increased roughly 3.0 GW since the end of 2021 where it sat just under 7.0 GW. Figure 1 | ERCOT Monthly Solar Breakdown This is a similar growth pattern seen in 2021 which was a step up from the 2.0 GW spurt the prior year.  Once can see the ERCOT solar growth in the graph above as the cumulative peak generation is represented by the line with each year a different color.  The bars below the line are the month average generation from the solar farms whereas the top pane is what we call the capacity factor which is ... » read more
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