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| Tuesday Feb 21, 2023 | |
| The 2023 European winter was supposed to be a disaster as a year ago is when Russia invaded Ukraine. During the initial stages of the war, Russia intended to use its energy influence as a weapon against a European response as natural gas flows were being curtailed and news around what might be next was in play. For the first time since World War II there was conflict in Europe and the energy supply was the battlefield. The NordStream 2 sabotage sent a signal to the world that not only could pipeline flows be curtailed but the entire network into Europe could be destroyed. The risks sent natural gas prices to record levels on three continents in a scramble to secure molecules ahead of this winter. The Q1 Dutch TTF futures prices broke $101 US/MM in the aftermath of ... » read more | |
| Friday Feb 17, 2023 | |
| A simple way to describe one set of services our consulting practice offers is we help electricity assets economically plug into the wholesale electricity markets. On the supply side, this often takes the form of helping renewable projects estimate future wholesale revenues, costs, and risks. We also do a lot of work on the demand side, notably for large technology companies. They want to know the opposite side of the same coin – the cost and risk of the RECs that they are purchasing. A fun part of the consultant’s job is seeing the new solutions that are coming down the pike. We’ve looked at long distance transmission a number of times. While some of these large transmission projects will have their moment in the sun, in most parts of the country the renewable by wire ... » read more | |
| Thursday Feb 16, 2023 | |
| The Pacific Northwest is dealing with some cool weather at the moment and staring at a big block of cold up ahead starting in the middle of next week with Portland and Seattle’s temperatures expected to fall down into the low twenties overnight and below-zero temps up in Montana. Mid-C is at a premium to the other hubs in the West as the Northwest is sending a signal to keep megawatts at home with the tight grid conditions or else incentivize increased production from the region’s hydro system. So far, apart from the brief spike in output at the very beginning of the month, Northwest hydro has been very limited, averaging just 11.3 GW so far in February, more than 4 GW lower than last year. Figure 1 | PNW Daily Average Hydro Generation (MW) The current ... » read more | |
| Wednesday Feb 15, 2023 | |
| With the first month and a half of 2023 in the rearview, another deadline for the Colorado River basin states has come and gone with no consensus. Back in June, the commissioner at the Bureau of Reclamation announced to the seven states that an agreement needed to be made to reduce water usage by 2 to 4 million acre-feet (maf). The first deadline came and went in 2022 with no decision. The upper basin released a plan with no hard numbers while the lower basin states including Arizona, Nevada, and California remained silent. A new deadline for the end of January was announced. On January 30th, six states came together with a last-minute proposal for new cuts. California, the only state excluded, came forward with a different plan with lower cuts a day later. California is largest user of ... » read more | |
| Tuesday Feb 14, 2023 | |
| "Location, location, location" is an old adage that is often used in the real estate sector where the essence of the phrase states that even though you may have similar properties, the location of either makes all the difference in the world as to how they are valued. For example, two properties with the same exact footprint and square footage can have different property values given one sits on the edge of a rugged hillside overlooking the ocean while the other is on the other side of the street where the view is of the house just mentioned (not the ocean). This type of locational pricing rings true for the natural gas market as well as this winter has seen prices diverge from coast to coast as the Gulf/East Coast are suffering from high inventory conditions where the exact ... » read more | |
| Monday Feb 13, 2023 | |
| The second week of February has brought much more mild weather to Texas than the start of the month. Along with the warmer temperatures have come higher wind output and lower demand, and the low net load is (for the most part) keeping prices low. Figure 1 | ERCOT RT Dashboard, 2/5/23 – 2/11/23 The image above shows the ERCOT RT dashboard for February 5th through 11th. The top pane shows the North Hub DA prices (blue) and RT prices (orange). Though prices have spiked to a little above $100 for a couple of intervals in the evening, for the most part they’ve tended to stay quite low. One event that sticks out on the real time price graph is the deep negative block, starting in the last hour or so of February 5, and lasting through the light load hours on the morning of February ... » read more | |
| Friday Feb 10, 2023 | |
| California renewables have taken a back seat to the higher natural gas prices across the West this winter. As the sun continues to shine and the wind turbines spin, the hydro situation in the Pacific Northwest continues to allowed any type of megawatt to find a home throughout the month January. This is a typical occurrance as the power load numbers are supportive to the overall supply stack megawatts throughout the day. Once we get into the month of February, the landscape starts to change as the weather can drive the power demand numbers higher/lower depending on Mother Nature while the solar output starts to pick up as the winter days start to extend the daylight period. Figure 1 | CAISO 7-Day Renewable Breakdown - Hourly The image above displays the CAISO solar ... » read more | |
| Thursday Feb 9, 2023 | |
| With temperatures up a little this week in the Pacific Northwest after a some chilly weather to end January and start off the month of February last week, we’ve seen a marked change in PNW Hydro production. During last week’s cold the hydro system ramped up to provide over 14 GW of heavy-load generation on the first of the month. Since then, it’s pulled back sharply to give under 10.5 GW the past three days. This is more in line with the way the water year has played out with precipitation and snowpack lagging behind normal levels. Last Thursday, the Northwest River Forecast Center gave a webinar presentation with their February Water Supply Forecast Briefing—a good resource to get a sense of how the water year has evolved up to this ... » read more | |
| Wednesday Feb 8, 2023 | |
| At the start of 2023, the West was coming out of a months-long stretch of below normal temperatures while the East was recovering from deadly storms. The country breathed a big sigh of relief as January came and went with mild temperatures from coast to coast. The Northeast saw the warmest January on record with some cities seeing above normal temperatures every day. In the West, bursts of cold hit the Pacific Northwest but the ice storms were left behind in 2022. California felt the warmth in the first half of the month, but it came along with buckets of rain causing flooding, destruction, and a boost to the hydro system. In our January monthly, it’s out with the cold and in with the new year as we look at how January warming and weather impacted power and natural gas markets ... » read more | |
| Tuesday Feb 7, 2023 | |
| Back in August of 2021 the El Paso Pipeline, which runs from West Texas to the state of California, suffered a rupture along its South Mainline just south of Coolidge, Arizona. The explosion had the force of over 2000 pounds of TNT killing two people and prompting a full scale investigation by the NTSB into the root causes. The pipe was built in 1986 and was intended to carry crude oil from the Permian Basin into the West. By 2001 the pipe was converted into natural gas. This was a common practice throughout the country as the fuel gained more uses for heating and power generation. In the aftermath of the explosion Kinder Morgan, the owner of the pipeline, cut the throughput of the ruptured segment by .54 BCF constricting the gas supply into Arizona and California. Figure 1 | ElPaso ... » read more | |