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Friday Sep 7, 2018   
In February 2018 NRG announced the sale of NRG’s yieldco and renewable business to Global Infrastructure Partners (GIP). According to stories published in February, the deal would include: (1) NRG Energy’s controlling stake and 46% economic interest in NRG Yield with an operational portfolio of more than 5.1 GW, (2) NRG’s O&M business which serves 2.4 GW of renewable projects, and (3) project pipeline capacity (and associated development team) of more than 6.4 GW. The deal closed at the end of August with the new entity called Clearway Energy (side note, I’m not a fan of this name, but I do like the Wayne’s World variations such as Way Clear! or Clear … Wayyyyy!!!!) The purchase price was reported as $1.375 billion in cash. The vast majority of the ... » read more
Thursday Sep 6, 2018   
While the holiday weekend came as a welcome reprieve here in Portland with comfortable temperatures sticking around the low 70s, the same cannot be said for the Midwest, Ohio Valley and Eastern part of the country. Shifting our gaze to the Northeast, the region was already being enveloped by yet another heat wave as daytime highs made their way into the 90's. ISONE was hit the hardest as complications in the generation stack forced the RTO to declare an Energy Emergency Alert with a Power Watch later being implemented. Taking a closer look, we can see what drove these actions by the grid operator and the steps it took for grid reliability. The heat wave arrived full force in Boston on Labor Day driving temperatures up to 94 degrees. This caused load throughout the grid to look more like a ... » read more
Wednesday Sep 5, 2018   
Tropical Storm Gordon is the first to hit landfall this year. The storm landed on the Mississippi coast last night at 65-70 mph and moved steadily to the Northwest. The market has not been too concerned about disruptions to Gulf supply. That is because the production in the region has dropped by more than half in the past five years to just 2.5 BCF of offshore volume. Most of that production resides west of the current storm path. By the time the storm makes it northward to the Haynesville shale feature the winds look to die down to 30-40 mph.  As a precautionary measure, platforms started to get evacuated ahead of the Labor Day weekend. Transco, Destin and Sonat Piplines have seen a .32 BCF cut in onshore flows since late last week.  Figure 1 | Gulf Production from ... » read more
Tuesday Sep 4, 2018   
The 'Dog Days of Summer' are behind us as August rolled off and September is off to a 'Laborious' start.  Out West there is a storm brewing that we discussed on our latest EnergyGPS Gold Package Newsletter Article titled, 'Now There are Two'.  The storm is tied to the current SoCal and PGAE storage levels and what could be in storage over the next two months and as we head into winter.  Ever since the Aliso Canyon leak and the reduced transport capacity into the SoCal Gas's system, SoCal Citygate has become the most volatile trading hub in the cash market.  If you recall, it was back in July (24th) when we saw the cash hub price trade just under $40.00 coming out of a weekend full of Low OFO critical notice postings.  This was the heart of summer with ... » read more
Friday Aug 31, 2018   
Last week Lawrence Berkeley National Labs published its 2017 Wind Technologies Market Report. I look forward to reading this publication each year. It is chock full of interesting graphs and data covering everything from turbine costs, geographic distribution of turbine manufacturing, length of turbine blades, capacity factors, installation trends, and market pricing. Based almost entirely on publicly available data, it is an impressive and comprehensive tome. There were two images in the report that particularly caught my attention. The first showed what wind actual wind production was worth in each market in 2017. Figure 1 below shows these results. Figure 1 | 2017 Wholesale Revenue for Wind in Different Markets LBNL Note: Price comparisons shown are far from perfect – see full ... » read more
Thursday Aug 30, 2018   
As we made our way out of the dog days of summer, Mother Nature made it clear she wasn’t done with us just yet. A high pressure system blew into the Northeast causing the hottest weather of the summer to enter the region. This drove daytime highs into the 90s as far north as Maine. If you were fortunate enough to have AC, it was cranked to the max setting. The power market also felt the heat as load in ISONE climbed to the highest levels so far this year. The market saw the heat wave in advance which kept outages at less than 1 GWa with generation doing its best to be available. However, the gas stack was not quite enough to supply the market. Looking at Figure 1, we can see fuel oil ramped into the market to solve peak demand on the 28th. Coal generation also appears to have ramped ... » read more
Wednesday Aug 29, 2018   
With everything that has been going on in California this summer and the anticipation of ERCOT blowing up in July and August, SPP has been the forgotten market.  In today's newsletter we take a look at what has been happening from a supply demand standpoint over the past week or so and how the renewable picture has shaped up this summer.  To start things off, let us take a look at the daily net load to hourly implied heat rate graph for SPP South Hub. Figure 1 | SPP Net Load and South Hub Implied Day-Ahead Implied Heat Rates - Hourly The x-axis represents the hours broken down by day while the left y-axis is in GW while the right y-axis is the implied heat rate.   The red line represents the power load forecast/actuals while the darker shaded blue is the wind ... » read more
Tuesday Aug 28, 2018   
Late last week FERC posted a notice that they have approved Rover Pipeline’s request to add an additional two laterals to the mainline receipt point that transports volumes Northwest into Michigan. The Majorsville and Burgettstown additions will bring an additional .8 BCF out of West Virginia taking total flows on the Rover Pipeline from 2.1 to 2.9 BCF. On Friday, Energy Transfer, the owner/operator of the pipe posted a notice that the pipeline would be capable of moving gas as early as this weekend. Firm subscriptions are expected to start on September 1 guaranteeing full flow of the expansions in just a few days. Beyond this coming jump in capacity, there are still .45 BCF of additional laterals in the works that will complete the 3.25 BCF per day design of Rover. Those are ... » read more
Monday Aug 27, 2018   
The last few days of August are upon us, which symbolizes the end of summer for many as they head back to school.  In Texas, the end of August gets a big sigh of relief from the system operators at ERCOT as it is typically the one month where the grid gets tight due to warm temperatures, unplanned outages and other variables in the marketplace.  The anticipation to this year was big as several coal units retired back in Q1, thus the supply stack has had to lean on the natural gas fired generation, the hope of wind showing up during the later afternoon hours and any type of demand side management tied to the loads on the grid. Figure 1 | ERCOT's Net Load Year on Year Comparison - 7 Day Rolling Average Starting with the first item on the list, natural gas fired generation.  ... » read more
Friday Aug 24, 2018   
This week the EPA proposed to replace the Clean Power Plan (CPP) with the Affordable Clean Energy (ACE) rule. Unveiled by the Obama Administration in 2015, the CPP would have required states to develop plans to meet state-specific emission reduction targets. The EPA analyzed the power sector in each state and developed what the EPA considered to be an achievable path to carbon reductions. Each state had its own bespoke limit. Since the CPP was rolled out by the Obama administration, it has been mired in lawsuits and was ultimately put on hold when Trump came into office. While I am a fan of using market mechanisms to put a price on carbon, the CPP was a pretty convoluted way of doing it. The reason for the CPP’s convoluted structure stems from the fact that the CPP is the child of ... » read more
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