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Thursday Aug 4, 2022   
As we move into the second full month of summer, the Pacific Northwest hydro is at a transition point.  Each water year, sometime between the middle of July and the very beginning August the hydro system reaches the culmination of the refill efforts beginning in early spring and April showers and melting snow provide the elevated flows needed to replenish water in the reservoirs behind the major storage projects all along the Columbia and Snake Rivers.  The figure below illustrates the trend over the past four years, showing daily total MAF in storage peaking each year right as July turns into August (except for 2021, where the heat and dryness were so severe as to require supplemental releases from storage a couple weeks early).  Early in August, projects transition from ... » read more
Wednesday Aug 3, 2022   
Prices spiked to almost $1000 /MW last week in Alberta. A few factors contributed to this, including rising temperatures and a lack of wind. With another heat wave expected for AESO in the next week, let’s take a look back at what culminated when red overtook the Alberta forecast in the last week of July. The figure below from Atmospheric G2 shows the temperature forecast from Wednesday, July 27th. The day was above normal seasonal temperatures with highs in Calgary at 82 degrees. And it only got hotter over the next two days with highs in the upper 80s. The weekend and into this week cooled slightly, but still offered temperatures above seasonal norms. As always, the heat increased load as people reached to turn on their ACs. Figure 1 | Min/Max Temperatures in AESO from Atmospheric ... » read more
Tuesday Aug 2, 2022   
At the advent of the energy trading industry some 30 years ago hurricane season meant that weather events would pick up in the Atlantic Basin increasing the threat to off shore supply in the Gulf of Mexico. Market participants would assume a bullish bias on natural gas prices as storms would form in the Atlantic. That mantra has changed over the past 15 years as more supply was moved to on shore destinations with the fracking revolution. Now a hurricane development has the opposite effect. As storms make landfall they threaten shipping avenues reducing the LNG liquefaction demand along the Gulf Coast. On shore demand is also at risk as winds and heavy rains knock out power demand.  This year the hurricane season is off to a slow start. There have been no major storms in the Gulf ... » read more
Monday Aug 1, 2022   
After spending the past weekend in the Seattle area, the one thing is clear: the demand in the region is not going to be going down anytime soon in the summer months.  Especially if you consider the hot days like we have seen over the past week or so.  I say this because the new build popping up everywhere includes hotels, apartment complexes and additional buildings to existing businesses.  Each one is fitted with some sort of AC to which is being used to cool an area that once relied on the overnight coolness relieve themselves of the next round of daytime highs north of 90 degrees. Figure 1 | Pacific Northwest and its Heat The ‘staying cool in the heat’ memo that is blasted on the television in the hotel room has the top priority of finding a cool or ... » read more
Friday Jul 29, 2022   
ERCOT has been the market to watch since the beginning of this year, starting with the news about their new ORDC rules taking effect in January and continuing with what feel like constant real time price spikes. The Texas market has been so volatile that we have released around two dozen market flashes so far this year about ERCOT alone (in addition to numerous blogs, articles, and special reports). Even in the typically mild shoulder months, hubs have seen real time prices jump into the thousands of dollars per MWh. This is having a significant impact on the value of renewable generation; solar and wind values have risen to amazing highs. However, it’s important to understand the components of the value. Prices overall are high right now for a variety of reasons, including factors ... » read more
Thursday Jul 28, 2022   
ERCOT’s long-awaited (and somewhat delayed) June curtailment numbers were finally posted over the weekend.  The folks at ERCOT have had a lot on their minds over the past couple of weeks with several events with runaway real-time prices, including a trip to the $5k price cap back on the 13th, so we won’t hold the delay against them.  The new release provides some interesting insights continuing the conversation about how the growth of renewables in the region has impacted both prices and disrupted the “traditional” curtailment patterns from the past several years.  The figure below shows a running total of curtailments by renewable resource from January through December for the past four years.  Curtailments occurred at an unprecedented rate for ... » read more
Wednesday Jul 27, 2022   
Both Lake Powell behind Glen Canyon Dam and Lake Mead behind Hoover Dam are facing historically low elevations that are threatening hydropower generation in the Desert Southwest. We’ve been following updates on the lakes and the measures taken to save them here at EnergyGPS, most recently in the report titled ‘Lowering the Lows at Lake Mead’. Read on for a sneak peak of the updates and insights in this article. Recent satellite photos released by NASA show the drastic change at Lake Mead from 2000, the last time the lake was full, to 2021, and on to 2022. The changes are staggering and the impacts for the millions of people depending on the water for agriculture and power are even more so. At the beginning of this year, a Tier 1 Shortage was announced, meaning usage cuts ... » read more
Tuesday Jul 26, 2022   
Transco Pipeline was originally commissioned in 1950 and was designed to move supply from Texas and the Gulf of Mexico up into the demand centers in the Northeast. Over the years the pipeline has changed from a long haul natural gas pipeline delivering Gulf supply into New York City to a bidirectional route moving Marcellus gas south to demand centers in the Southeast. Currently up to 2 BCF per day is shipped southbound out of the Mid Atlantic into the Carolinas and Georgia. But as demand has bloomed along the path the supply has been outstripped by demand growth. Despite having natural gas production sources out of the Gulf and Northeast the Transco Pipeline is suffering an island effect throughout the Southeast where there is not enough molecules to meet the power generation ... » read more
Monday Jul 25, 2022   
Over the past year and a half, California batteries have been an active part of the conversation within the EnergyGPS construct of new market attributes within the energy sector.  We allow market participants to engage in such conversation via the EnergyGPS eCommerce platform, where individuals can subscribe to a specific package to which they receive content tied to the energy space.  The latest piece of content, titled ‘Throwing DARTS at CAISO’, detailed how the battery fleet has been adapting to the market conditions around supply/demand and constraints within the technology itself. In the article, we discuss the revenue streams that are tied to the newly minted technology of the future and what it means to the energy markets participants play in each day.  ... » read more
Friday Jul 22, 2022   
The US Natural Gas market has taken its share of prisoners since the second half of last year, and it’s showing little sign off easing off the volatility we’ve seen since then given the growth of many pressures on the supply demand balance (including geopolitical factors, changes in the production profile, and weather events) in that time span. While this volatility classically makes for a more exciting trading environment with fresh opportunities for many, it also has a singular drag on a major piece of the puzzle for most shops; maintaining liquidity. This is in part because credit facilities and exposures are often estimated, sized, and priced in proportion to the Potential Future Exposure (PFE) calculation for a given company, line of business, or trade. And that ... » read more
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