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Monday Jun 17, 2019   
This past week, EnergyGPS presented at a conference up in Seattle where the focus was on the new technologies needed to keep the grid sustainable as Renewables, Carbon and Retirements all come into play. in fact, it was only last week when Pacificorp announced it was going to move up the retirement of two Colstrip units to the end of the current calendar year.  Down in California, the discussion surround the solar profile and what impact it is having on the hourly price signal in the marketplace.   It was not more than a week ago when the CAISO real-time price screamed higher as the power demand on the grid saw a massive ramp up between the midday period and the evening ramp.  In fact, there were days when the grid needed to find over 11 GW of power supply from the ... » read more
Friday Jun 14, 2019   
When I was young, I don’t remember being asked this question.  The scoop of ice cream I was handed was on a “cake” cone.  At some point, I was given a choice: “cake” or “sugar”?  (Why the former cone was called “cake”, rather than “cardboard”, I do not know.)  When the super premium ice creams appeared, many ice cream parlors started making “hand made” waffle cones, always with an up-charge.  They smelled delicious and looked tasty, but I usually stayed with the sugar cone, as it was sweet and did not cost extra. I’ve been in the energy analysis business long enough now that when I think of “cone”, my mind also goes to "CONE": the Cost of New Entry. CONE is a ... » read more
Wednesday Jun 12, 2019   
While nuclear subsidies continue to make headlines, power markets across the Northeast are still seeing retirements of nuclear generators. The latest in the string of retirements is the retirement at the Pilgrim nuclear facility that dropped off the grid with the commencement of June. This facility helped provide power to New England. Similar to the other retirements, the generating station only had one unit causing it to become uneconomic without the ability to combine overhead like some of the other multi-unit facilities. However, the recently lost capacity is expected to be replaced by the Bridgeport Station combined cycle (485 MWs) expected to come online this month. Figure 1 | Pilgrim Nuclear Station Taking a look at the real time fuel mix, we can see that Pilgrim began to ramp off ... » read more
Tuesday Jun 11, 2019   
There has been a radical change in the Lower 48 natural gas balancing since the beginning of the injection season. The EIA storage inventory has moved from a 228 BCF deficit to now a 182 BCF surplus and we are not even half way through the injection season. That flip in storage inventory has taken all fear out of the ability to fill the natural gas storage complex prior to the start of next winter. As a result the Q1 2020 NYMEX futures have drifted down from $3.04 at the beginning of April to now a settle of $2.74. The bearish benchmark NYMEX action has sent ripples throughout the country with fixed price basis following suit. There is one area that is not enjoying the price slide. Following record cold, a boost in native gas demand and ongoing system maintenance Alberta continues to ... » read more
Monday Jun 10, 2019   
Mother Nature has full control on how the energy markets play out as she can turn up the heat in the summer as well as blow arctic air down from the North to create what has been labeled as a 'Polar Vortex'.  She can also flip things around and deliver below normal temperatures in the summer and above normal levels in the winter session.  On top of if all, Mother Nature brings precipitation to regions in form of rainfall and/or snowpack.  Not a day goes by without talking about the impact weather is having on the grid, so recent times are no different.  In this week's Newsletter Article titled 'Champion of the Energy Sector', we took a look at how the weather pattern as of late has impacted the overall natural gas grid. In the article, we dove into the detail ... » read more
Friday Jun 7, 2019   
Energy markets are full of duplicative or confusing names, or at least in the west they are. For example, the transmission line connecting the Pacific Northwest to Northern California is called variously: Paci, the AC intertie, Path 65, COI, Malin500, among other names. While all of these names refer to the same general set of wires, the precise way those wires are being considered varies based on the different names, sometimes in significant ways. This issue doesn’t just apply to transmission lines from the Northwest to California. Palo Verde is another example of the issue. Palo Verde could refer to a 3.5 GW nuclear plant in Arizona, a transmission line running from the aforementioned plant to Southern California, a pricing node within the CAISO model, or a bilateral trading hub ... » read more
Thursday Jun 6, 2019   
The state of Ohio is now considering adding legislation that will subsidize the nuclear fleet which would go into effect in 2021. Four nuclear subsidies are already in place in Illinois, Connecticut, New York, and New Jersey with a fifth currently being considered in Pennsylvania. These subsidies generally create a price collar for the nuclear fleet keeping the facilities at their economic break even after all is said and done. However, the Ohio legislation, known as HB 6, is slightly different with the ratepayer fee poised to replace existing charges for renewable generation and peak demand reduction. Figure 1 | Davis-Besse Nuclear Generator The bill would add at least $1 to ratepayer’s monthly charges and grow depending on the customer’s classification. It would also ... » read more
Wednesday Jun 5, 2019   
Cameron LNG announced their first commissioning project one week ago with sendouts at the facility moving up from zero to .5 BCF per day. the site even got a visit from President Trump. The liquefaction demand did not last long. Prior to the start of June the facility has dropped its activity back to zero which took total LNG liquefaction back from 5.5 to 5 BCF. This drop off in demand had a big impact on the cash prices in the Houston Shipchannel. Since the beginning of April the HSC cash prices have fallen from $2.75 to $2.35.  Figure 1 | LNG Sendouts for May 28 - June 4 While this was a big announcement for the start up of the facility, Cameron also had some disappointing news. The second and third trains, which were expected to start up at the end of this year have now been ... » read more
Tuesday Jun 4, 2019   
It is coming up to almost nine months to the day that the Enbridge Pipeline explosion occurred up in British Columbia.  On that nice fall day back in October 2018, the market was humming along when all of a sudden a big ball of fire rose up from the ground and the natural gas grid popped into emergency mode as the 36 inch pipe that connected the British Columbia production to the Pacific Northwest via the Sumas compressor. In fact, this is the point that Spectra BC /Westcoast Pipeline hands over the keys to Northwest Pipeline.  It is the artery that feeds the demand down through Seattle/Tacoma area, heads down I-5 and touches several power plants along the way and eventually has a look at Jackson Prairie storage of heads out to California and/or back to the Rockies via the ... » read more
Monday Jun 3, 2019   
Heading into last summer, ERCOT's implied heat rates were beyond levels needed for every natural gas to be running as the grid was exposed to the coal retirements seen to start the year (January 2018).  As it turned out, all hands were on deck as the grid was able to keep the lights on without really feeling too frantic most of the summer.  When you look back on it, Mother Nature was in a good mood when it came to how much wind she would have hitting the grid during the month of August. Figure 1 | ERCOT's Monthly Wind Breakdown If you look at the chart above, the top pane represents the calculated capacity factor for all the wind that showed up in ERCOT by month since 2016.  The bottom pane illustrates the two components of the capacity fact, the first being the ... » read more
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