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Tuesday Apr 23, 2019   
Easter weekend not only brought eggs and candy to the Lower 48. It also brought a lot of wind. Wind turbine output pushed towards 50 GWa and combined with the holiday loads took the net load down to just 306 GWa. That is 70 GWa lower than what we are seeing today and one of the lowest net load days we have seen in the past two years. This was led by the South Central region which carries most of the wind capacity across the country. Figure 1 shows just how dramatic the change was for the region's power burn total.  Figure 1 | South Central Power Burns It has been a banner month for SPP and ERCOT wind generation. The monthly average for the two combined areas is posting almost 2 GWa higher than this time last year. But typically April and may are the two biggest wind generation ... » read more
Monday Apr 22, 2019   
Q2 is the season for RTO assessments of market performance for the prior calendar year.  PJM’s market monitor released its report for 2018 a few weeks ago and, by June, we’ll see the 2018 reports for the rest of the U.S. RTOs.  This year, I’ll be particularly interested the insights from Team Southwest Power Pool (SPP).    Wind energy and its uncertainty associated with its production in the day-ahead time frame has put SPP power prices on a pretty wild ride—a topic that will undoubtedly be addressed in this year’s report. SPP price volatility is easily explained.  Growth in wind energy production has been rapid--SPP’s 21.5 GW of installed wind generation now produced over 5 million MWh/mo--almost a quarter of the ... » read more
Thursday Apr 18, 2019   
Climate goals continue to move forward throughout the Northeast with New York and Massachusetts leading the charge. While Massachusetts has already set generator limits on carbon emissions as we discussed in our previous market flash, New York is still in discussions on how exactly to implement the social cost of carbon. The policies will force fossil fuel based generators to reduce output to keep emissions under the limit. The drop in output will eventually need to be replaced by another source of energy with many policy makers looking towards offshore wind. The New York Governor Cuomo tripled offshore wind capacity target moving from 2.4 GWs to 9 GWs by 2035. Figure 1 | Offshore Wind Farm New York’s lofty goals have put a tailwind behind offshore projects. However, the region ... » read more
Wednesday Apr 17, 2019   
Go Blazers!!!!  While I was in college, I followed the Portland Trailblazers as their point guard was no other than Terry Porter who played along side Clyde 'the Glide' Drexler, Buck Williams and Jerome Kersey.  This team was really good, the only reason they are not an iconic team is due to the fact that they ran into the Chicago Bulls during their prime years, who just happened to have a player by the name of Michael Jordan.  Now that I live in the the City of Roses (Portland), it is like old times as the Portland Blazers have Damian Lillard, who is a perennial all-star surrounded by CJ McCollum and the newly acquired Enos Kanter who has replaced the injured Jusuf Nurkic in the middle.  I had the opportunity to go see Game 1 live at the Moda Center on Sunday and it ... » read more
Tuesday Apr 16, 2019   
We have heard a great deal of the associated gas production in the Permian Basin. The jump in natural gas volumes has stripped out the take away capacity leading to a catastrophic drop in cash gas values throughout the Southwest United States. Associated gas production increases are not confined to just the Permian Basin. The Bakken basin in the Dakotas has also seen its boom in volumes. And because it has its own pipeline capacity constraints it is causing a big change in the way Canada is exporting natural gas from Alberta into the Upper Plains. Northern Border Pipeline is a good representation of these issues. Over the past two months production has increased by .2 BCF per day and because that volume has already been utilized by upstream production in Canada the only outcome ... » read more
Monday Apr 15, 2019   
Last year at this time, ERCOT's summer months were on everyone's radar screen as the start of the New Year reinforced the fact that the coal retirements throughout the state were going to have an impact on the marginal cost of electricity once the electrical demand kicks in.  In fact, we wrote a couple of articles on how the 'Eyes of Texas are upon you all the live long days...'  As it turns out, the grid operations were able to manage the system as the implied heat rates in the forward curve were telling every natural gas fired generated to be online.  As we got into the actual 'dog days of summer' months, all eyes quickly turned to the wind generation on the grid as Mother Nature would need to step up to keep the real-time markets from venturing into scarcity pricing ... » read more
Friday Apr 12, 2019   
It is not uncommon for the key river across the Upper Midwest to flood in the spring time as the snow makes its way down the iron range slopes in Northern Minnesota or the several feet of accumulation that sits in North Dakota near the Red River.  If you have every been to Fargo, ND or north to Grand Forks in the spring, it is likely that you have seen the banks of the river overflowing to a point that the both city downtown areas are underwater and everyone is scrambling to try an keep the rising water levels from entering their business or residential dwelling. Figure 1 | Red River Flooding  As you makes your way east of Fargo, you start to get into the Mississippi River territory where the added water can be seen causing issues downstream as you start to get into Iowa and ... » read more
Thursday Apr 11, 2019   
Pennsylvania is currently considering a bill that would subsidize nuclear generation which we touched on in our previous newsletter. It appears that the seeds have grown roots as a companion bill was also introduced to the State Senate earlier this week. The Senate version of the bill, SB 510, mimics most of what was set forth in the original house bill, but will require energy sources purchased be between 17-23% be from non-nuclear generation like wind and solar. Legislative representatives continue to debate the merits of the bills citing economics on both sides. With only a couple months before the Three Mile Island begins its decommissioning process, time is critical if the proposed legislation will save the unit from retirement. Taking a look at the nuclear fleet’s ... » read more
Wednesday Apr 10, 2019   
If you live in the Midwest, you are scrabbling to get your sleds back out of the garage attic as Mother Nature is preparing to drop its second 'bomb cyclone' throughout Minnesota, Wisconsin and other states in the region.  This type of weather patter occurred around last year at this time as the Lower 48 was in the midst of one of the coldest April months on record.   Figure 1 | Mother Nature and her 'Bomb Cyclone' In fact, some forecasters are calling for up to 30 inches of snow in parts of Wisconsin just east of Minneapolis.  This should continue to create flash flooding within the region so once the sleds are put away after this week for the final time, it will be time to take out the paddle board or canoe. Speaking of weather and sledding, if you have ... » read more
Tuesday Apr 9, 2019   
Canada has had a history of reliable natural gas supply to the United States. Much of the natural gas infrastructure north of the border is specifically designed to take advantage of the well developed markets in the States. It was just two summers ago when the pipeline flows set a new record but this year will be very different. There are a number of factors that have turned the tide and should drop the net flows at almost every major interface. Over the next seven months the drop in volume will have a net effect of over 100 BCF on the US Supply/Demand balancing compared to last year's totals.   Figure 1 | Total Net Pipeline Flows from Canada to the Lower 48 There are a number of factors and challenges that will shift the pipeline supply. Some of these are structural ... » read more
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