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Monday Oct 10, 2022   
As you get older, the days/weeks/months roll by rather quickly or so it seems as we are already looking at the October tapping the middle of the month by week’s end.  Any end of summer items still on the list to do when it comes to yard work or house cleaning should move up the priority list as before we know it, the winter conversation is going to unfold with spurts of cold weather and if the current weather patterns persist, some intense type conditions could be in play across North America and Europe for that matter. The notion of time passing us by has been front and center of the Western market water situation as it has been well documented that the Colorado River has been dealing with decades of water consumption downstream for normal daily use and agriculture where the ... » read more
Friday Oct 7, 2022   
Fall is my favorite time of year.  Cool damp mornings, leaves turning colors, and holidays around the corner.  This fall, most people in the West are discussing grid reliability.  The recent heat wave in California put this topic at the forefront of the discussion if it was ever dropped.  We covered this event in detail in a recent Monthly Newsletter titled “September’s Hub, Heat and Hurricane”.  California skated by this time, but will things get worse or better in the future?  One program is making many people optimistic about reliability in the West: The Western Power Pools (WPP) Western Resource Adequacy Program (WRAP).  The WRAP is in the final stages of being implemented with a Tariff submitted to FERC and deadlines for ... » read more
Thursday Oct 6, 2022   
As a kid, the only wrestling I knew was that where the high school science teacher would turn in his backpack for a singlet and coach a team of classmates who wanted to make weight and compete on the mat that needed to be rolled out across the gym floor.  With the evolution of cable television and the urge to cross over from the technical sport that made a name for itself in Iowa to that of more showtime, the Worldwide Wresting Federation was being formed to which many know one branch as the WWE (World Wrestling Entertainment). One of the members of the WWE is known as Triple H, who transitioned from the ring to management over the years.  Many in the space know of his as the greatest professional wrestler of all-time.  That is a tall order considering there are countless ... » read more
Wednesday Oct 5, 2022   
Since 2020, the Southeast region of the US has lost 5 GW of capacity from coal plant retirements. The region is set to lose an additional 2.75 GW in the next 3 years. As the coal plants shutter, the next resource to be relied upon is often natural gas. It offers reliable energy, not dependent on the time of day or strength of the wind like renewables, but with fewer pollutants than coal. In years past, the grid alternated between coal and gas based on economic factors, such as gas prices and rail transport costs. Now the coal to gas switching is much less flexible as the number of gigawatts from coal plants dwindles. As we head into fall, let’s look back at how coal to gas switching played out in the Southeast region in the last summer month. Figure 1 | Net Summer Capacity of ... » read more
Tuesday Oct 4, 2022   
Now that Hurricane Ian has done its damage and dissipated it is time to do some post mortem on the storm effects. The storm landed on the US Gulf Coast as a Category 4 hurricane, knocking out 2.6 million Florida customers off the grid.  After replenishing itself in the Atlantic Ocean, the hurricane made its second landfall as it created havoc across the Carolinas where another 600k customers lost service. With approximately 3.1 million customers suffering from the storm impact, the power sector has seen a big decline in supply volume.  This means that the natural gas generation piece would have to turn off in order to balance the demand needs. As a result we saw a cratering of power burns. In one weeks time, the Lower 48 power burns fell from 35 to 28 BCF per day with most ... » read more
Monday Oct 3, 2022   
The calendar turned the page over the weekend as the third quarter came to an end and now the fourth is upon us.  The page turning from September to October is when a new Water Year is upon us here in the Pacific Northwest, which means that the hydro deck gets a bit of a reset to which Mother Nature gets to take another run at things.  In the early parts of the new Water Year, the parallels to sport ring true as the first couple of months are like preseason where everyone is trying to get the kinks out from having some time off and build a chemistry with the key veterans before the regular season starts off. Figure 1 | NBA Preseason Schedule With the Pacific Northwest, the hydro year does not get the summer off per se as the power grid tends to rely on the flexibility quite ... » read more
Friday Sep 30, 2022   
With the energy crisis that is raging in Europe right now, the European Union as well as individual countries are considering a variety of capping mechanisms on gasoline, natural gas, and electricity. The history of price caps in market economies does not have a long list of happy endings. Instead, the landscape is littered with good intentions and unintended consequences. That’s not to say that discussions of temporary price controls should not be on the table, it is a political necessity to do so. But if they are going to attempt such price controls, they should fully understand the likely outcomes and consequences. The motivation for caps typically comes from three areas. The first is consumer protection – government wants to protect consumers and industry from exorbitant ... » read more
Thursday Sep 29, 2022   
Throughout the summer the Northeast and Midwest have been dealing with a significant shift in the power sphere as several coal facilities have shuttered their doors forever.  Since this spring PJM and MISO were slated to lose 5.3 GW and 4.3 GW of coal capacity, respectively, by the end of the summer.  The impacts were felt as more reliance had to be placed on alternative sources of thermal generation—primarily natural gas.  This more intense utilization of these units looks to have pushed the region's natural gas fleet to the limit.  The figure below shows how thermal resources were deployed differently this summer in PJM compared to last summer.  First, total thermal generation was quite similar, just 1-2 GW lower this June and August than last year ... » read more
Wednesday Sep 28, 2022   
‘Tis the Season’ is typically heard around the end of the year as families gather and exchange gifts, sit around the dinner table and tell stories while sitting around a fire.  In the electricity environment, we can use the slogan when describing the start of the SPP curtailment season, which has move up over the years. Figure 1 | SPP Cumulative Curtailment Volume – Year on Year Comparison The movement is on display in the figure above as each line represents the cumulative renewable curtailed volume by year starting in 2018.  As you move up the calendar to the current year, the SPP system is having a hard time placing the renewable megawatts to that of power demand; hence curtailments exist. Take for example, 2018 and 2019 was as flat of a line as there can ... » read more
Tuesday Sep 27, 2022   
On September 20th the Texas Eastern Pipeline suffered an outage at its Colerain segment in Eastern Ohio. In the EBB posting there was no reason posted for the capacity cut and TETCO indicated that the pipe would be back in service near the 28th of the month. The loss of this pipeline segment forces volumes shipped out of the region back into the Appalachias. Both TETCO and NEXUS Pipelines were forced to either cut production or back up pipeline volumes flooding storage or available space on other pipelines.  Figure 1 | Current NEXUS Pipeline Nominations   Immediately when the outage was posted the basis differentials to the Henry Hub started to diverge. Dominion South cash basis prices were settling near minus $1.00 prior to the force majeure. Afterwards due to the ... » read more
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