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| Thursday Sep 16, 2021 | |
| European and Asian forward market prices just keep marching higher. EU storage inventories simply have not been able to muster much momentum rebuilding this summer. The EU injection season started with inventories at a hefty deficit to normal levels following a cold winter; summer gas demand in both Europe and Asia was strong due to excessive heat driving cooling loads; and supply issues have plagued European and Russian production. Though recent news has indicated some supply relief may be arrive this winter with the startup of Nord Stream 2 pipeline, there is significant doubt as to when those supplies will become available to the market and growing expectations they may come too late. As winter forwards have surged, several European countries have begun adopting ... » read more | |
| Wednesday Sep 15, 2021 | |
| As everyone has one eye on the Gulf of Mexico storms, the power supply stack outage storm is ready to hit the market as we cross over from the first half of September to the back half. Such a storm has been around for years where it comes and goes in both the spring and fall portions of the calendar year and covers pretty much most of the Lower 48. Figure 1 | Lower 48 Nuclear Outages – Year on Year Comparison The graph above illustrates the megawatt volume tied to the Lower 48 nuclear fleet that has units offline each and every day. The dark black line represents the current year while the other colored lines are tied to the five previous years with the data set tied to equivalent units. Stated another way, if a nuclear unit has been retired and is not represented ... » read more | |
| Tuesday Sep 14, 2021 | |
| Tropical Storm Nicolas developed very quickly in the Bay of Campeche this weekend. Once the storm was organized the path turned directly north towards the Texas Gulf Coast. The original National Hurricane Center (NHC) track had TS Nicholas running over Corpus Christi through Austin and into the Midcon. But each model run after the storm developed turned the track eastward and now the feature is running right along the Texas Gulf Coast following the curve of the landscape towards New Orleans. Even though this is still just a tropical storm, the location presents a big threat to the natural gas industry. In the path is the coastal natural gas infrastructure that runs east from Matagorda Bay to the Houston Shipchannel, Beaumont, Lake Charles ... » read more | |
| Monday Sep 13, 2021 | |
| The renewable space continues to get the headlines as the push for a carbon free environment starts at the federal level given that global warming is front and center on everyone mind after a summer that has been filled with fires and heat domes across part of the country that are not usually in the conversation. The state level is not standing down either as many are in the process of passing bills tied to the carbon initiative which in turn stimulate renewable growth/mandates that will accomplish what is in front of us. California is of course the front-runner when it comes to the push tied to both a renewable mandate and a carbon initiave as both are in play at this time. Now each is not issues but one has to appreciate how California keeps forging ahead despite ... » read more | |
| Friday Sep 10, 2021 | |
| This past week has seen another miniature heat wave in much of the Western US. While it’s miniature in the sense that temperatures aren’t soaring to record-breaking highs as they did earlier in the summer, it’s having an outsized impact on the CAISO grid and prices due to a number of intersecting factors. Yesterday we wrote about SoCal Citygate gas and the strain that the El Paso pipeline explosion in Arizona during the middle of August has placed on the regional gas system. As the blog mentions, under mild weather conditions this wouldn’t be an issue as the constraint from the rupture is relatively small. However, Wednesday and Thursday this week saw demand in excess of 40 GW in the CAISO as a result of the regional heat. Still, loads over 40 GW aren’t ... » read more | |
| Thursday Sep 9, 2021 | |
| It has been nearly six years since the Aliso Canyon storage cavern rupture just North of Los Angeles but since that moment SoCal Gas continues to see impairments of all kinds that threaten the utility's ability to manage the franchise demand. Although the rupture of Aliso Canyon has been largely rectified with the cavern receiving a clean bill of health back in 2019, the restrictions on the cavern withdrawals remain in place. This is just the tip of the iceberg. Since that moment in 2015 there have been a series of outages, some planned and some forced that have cut the ability to receive gas from interstate pipelines that connect to California. The latest is the El Paso Pipeline rupture/explosion outside of Coolidge Arizona on August 15th. Figure 1 | ElPaso Pipeline Map from Kinder ... » read more | |
| Wednesday Sep 8, 2021 | |
| With the passing of Labor Day, it is time to put away the sparkly whites and seer-suckers and accept that the transition to fall is underway. Weather forecasts and energy markets now embark on the transition from cooling-degree days (CDDs_ - in which heat drives demand for electricity to power air conditioners - to heating-degree days (HDDs) in which cold temperatures drive demand for natural gas and electricity to run furnaces and heaters. The transition typically moves latitudinally, starting earliest in the Canadian energy markets over the next few weeks before HDDs become firmly entrenched by the end of the month. As this transition takes place this year, it will provide a good environment to see the effects of structural changes in the Alberta gas ... » read more | |
| Tuesday Sep 7, 2021 | |
| The long Labor Day weekend has come and gone but not is all lost in the long holiday weekend memories as it symbolized the start of college football, gave the children one last period to hang out with their friends before digging deep into the books and getting to sleep in one extra day instead of waking up on East Coast time on the West Coast. As we turn the corner and look forward to the fall season, there is a lot going on in the energy markets from a fundamental standpoint as a hurricane whipped through the Gulf and knocked out power along the Gulf Coast. The remnants from the storm moved up the Atlantic Coast and drenched the Northeast where the region saw massive flooding that will take time to fully recover from. Out West, the battle of the fires is ... » read more | |
| Friday Sep 3, 2021 | |
| This year SPP has enjoyed an impressive showing from the renewables portion of its supply stack, with average wind generation exceeding 12.5 GW in March and April, and 10.8 GW in May. After dipping in June and July to levels comparable to 2020, August saw a resurgence as wind again reached 10 GW on average, over two GW higher than the previous year. Accompanying this explosion of wind generation has been a similar explosion in wind curtailments, as heavy wind production brought down net load numbers compared to previous years. Figure 1 shows cumulative SPP wind curtailments for each of the past four years, with 2021 shown in blue. Starting in February curtailments diverged from the prior three years, rising sharply throughout the spring and then leveling off in late ... » read more | |
| Thursday Sep 2, 2021 | |
| The summer months in ERCOT have been quite different compared to previous years for a lot of reasons but the one that sticks out the most is tied to the real-time price action across the board. For example, the forward curve always put a premium to July and August as the power demand hourly profile was at its peak given the fact that AC units usually ran around the clock for long periods. On the supply side, the supply stack would work through the lower cost units only to be left with the units that sat in the steeper portion of the curve. Throw in the fact that ERCOT had the Operating Reserve Demand Curve (ORDC) uplift charge incorporated into their model/calculation. The trigger for such the uplift charge was when the reserve levels reduced to a threshold that ... » read more | |
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