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Wednesday Aug 18, 2021   
LNG forward spreads continue widening, recently drawing strength from Europe’s lethargic storage refill rate taking another punch to the chin.  Last week we published a Flash to our LNG subscribers describing how Russia’s Gazprom has had to withdraw volumes from its Ukrainian storage inventories in order to meet its delivery obligations to the EU.  A fire at a Gazprom processing facility in Russia in late July cut Gazprom’s ability to deliver gas to the EU via its Yamal pipeline, forcing Gazprom to turn to storage gas in the middle of summer.  Figure 1 shows Ukrainian gas storage inventories, which we track and chart on a daily basis along with northern European, southern European, and U.K. regional inventories as well in our EU storage package.  ... » read more
Tuesday Aug 17, 2021   
It has been over a year of pandemic demand recovery. Some areas of the country have recovered their demand as anticipated and others like the Alberta province continue to surprise. The province is hitting on all cylinders as all factors of the economy are booming. But the record electric and natural gas demand is more than just a jump in economic activity. Record temperatures and oil sands processing have all been big factors which has led to a increase in natural gas demand by .7 BCF per day which is a 14% gain over last year (more than half the gain has come from the latter which has been incentivized by the recovery in global crude prices. Figure 1 | Alberta Natural Gas Demand versus Temperatures for 2019(red), 2020(orange) and 2021(blue) in BCF/d On the back of economic ... » read more
Monday Aug 16, 2021   
The western power markets have been at the forefront of the conversation most of the summer as the price signals leading up the period of question took on scarcity as Palo Verde's forward curve priced in actions from last summer and took into account recent coal retirements and Desert Southwest heat.  The Pacific Northwest rallied prior to the summer really kicking in as  Mother Nature delivered an unique Water Year in the Pacific Northwest along with a heat dome for the ages.  California on the other hand, tried to go with the two market mentioned but as CAISO system operators came out with tariff changes and comments of cutting exports, the market participants knew the market was not going to be drive off of economics per se but off of pre-emptive actions of procuring ... » read more
Friday Aug 13, 2021   
This summer, Energy GPS is excited to have partnered with LevelTen Energy and Intersect Power for the first year of what we hope and plan to be an annual internship program. Seven students from all over the country have spent two weeks (remotely) with each of the three companies, in addition to a few weeks of training. Each of the firms has different focuses and strengths, so this was intended to let students get as wide a variety of experience in the energy industry as possible. At Energy GPS, our collective strengths are our analytics, our comprehensive historical data for every ISO in the US, and our wholesale market experience. We decided that the best way to leverage these for the interns would be in the form of a trading game. The interns’ results at trading to meet load for a ... » read more
Thursday Aug 12, 2021   
The Pacific Northwest is starting another heat wave as temperatures in Portland reached 101 degrees late Wednesday afternoon and Thursday is expected to top 106 degrees.  Seattle is not as hot but anything above 95 degrees is sweltering to a region that stated back in June that 33% of the households had air conditioning.  That percentage might have moved up ever so slightly since the record breaking heat event earlier in the year so they can cool off this go around. Inland, we have Spokane and Boise back above the century mark, which is breaking newly found records as their summer is the hottest on record in the recent era.  The bottom line is that Mother Nature is not letting up on the gas pedal when it comes to the Pacific Northwest as the temperatures are expected to ... » read more
Wednesday Aug 11, 2021   
In Exelon’s most recent earnings call they confirmed they are pushing ahead with retiring two major nuclear facilities starting next month.  The news is noteworthy for the nature of the retirements: the loss of highly utilized baseload power. Between now and the end of the year, the volume of new nameplate capacity to be introduced to the U.S. power market will be more than three times greater the amount of nameplate capacity to be retired in that time. However, the different nature of the retiring capacity versus new capacity makes the net delta tighter than it would appear by simply looking at nameplate alone. In essence: the market will be retiring capacity that tends to run more consistently and at higher utilization rates, while the new additions will be heavily weighted ... » read more
Tuesday Aug 10, 2021   
California is in the middle of its biggest drought in history. But this issue was not borne from just poor snowfall from last winter. It is a problem that has been decades in the making. The population has swelled and little to no infrastructure has been added to accommodate the jump in usage. After what was a record snowfall in 2019 filling all reservoirs to capacity, it only took two consecutive years of poor snowpack in order to flip the problem in the other direction. The state is now scrambling to repurpose water deemed for agriculture use over to the general population as there is now a fear that the problem can persist into next year or beyond. With no other sources of water the supply is almost entirely reliant on the weather.  Figure 1 | Northern California Snow Water ... » read more
Monday Aug 9, 2021   
As part of the EnergyGPS Newsletter Platinum Renewable Package, the CAISO and ERCOT power markets are the frontrunners when it comes to analyzing the technology that is changing the supply stack.  The former has its Renewable Procurement Standard (RPS) that was implemented over a decade ago while the latter has utilized an economic signal to market its renewable growth.  Both have endured some hardships over the past year as CAISO is coming up on the one year anniversary of its first energy related rolling blackouts in two decades while ERCOT has been tethered to the February 'Freeze-Off' that has had ripple affects throughout the state where consumers, suppliers and energy providers continue to dig themselves out of the hole that was created.  Focusing in on ERCOT,  ... » read more
Friday Aug 6, 2021   
As the battery fleet in the CAISO continues to build out, it is fun seeing how the dispatch of the fleet changes. I happened to be looking at one of the Energy GPS battery dashboards this morning and the image below grabbed my attention. Figure 1 | CAISO Hourly Battery Dispatch Last 14 Days Two things stand out from this graph. The first is obvious, the battery activity in CAISO this years (orange line) is massive compared to 2020 (blue line). Part of this stems from higher installed capacity, where there were several hundred MW installed in 2020 and about 2,000 MW installed today. The maximum average fleet output exceeds 1,000 MW on many days. To put this into context, had this number of batteries been on-line in the summer of 2020, CAISO may have avoided some of the blackouts. The ... » read more
Thursday Aug 5, 2021   
As we move into the latter half of gas storage injection season, most western markets are sitting on inventories at or above normal levels, with the notable exception of Alberta's AECO market.  SoCal started the injection season with inventories at five-year highs.  From mid-June to mid-July, though, inventories fell below year-ago levels as heat-driven demand rose.  We discussed in a series of flashes such as here and here explaining that more power demand had to be met from sources within the SoCal region due to wildfires in Oregon cutting the ability to import megawatts from the north.  As the lines were restored and SoCal temperatures and demand eased, the past week has seen a reversion to year-on-year surplus.  SoCal inventory builds tend to slow (or even ... » read more
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