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Thursday Sep 24, 2020   
The volatility is real when it comes to the natural gas prompt month movement.  It all started post Labor Day and accelerated at the start of the week when it dropped from just over $2.00 to $1.83.  The cash basis markets followed suite as we saw prices down around the production cutoff point while other regions were shifitng down to levels that expanded the implied heat rates for natural gas-fired generation to take over market share in both MISO and PJM.   Figure 1 | Nymex Prompt Month Volatility The South Central was hit with Tropical Storm Beta along the Texas Gulf Coast where flooding was inevitable and with ERCOT net load down due to the lack of power demand and low wind, the natural gas was looking for a home.  Up in the Northeast, the grid was loose ... » read more
Wednesday Sep 23, 2020   
As we drill down into the the deeper market fundamentals tied to the auction clears in the CAISO market, the focus is usually on the flex ramp time perriod between HE16 and HE20.  These are the hours when the sun starts to set (solar profile shifts lower) and the power demand profile is still quite high as all the virtual workers are trying to finish up work, get dinner ready an turn on the AC units so they are comfortable for the rest of the evening.  It is a period of time when the Desert Southwest has to compete for megawatts under tight circumstances therefore creating a price shape in the CAISO day-ahead auction that has HE19/20 a premium to the middle of the day. Figure 1 | CAISO SP15 Day-Ahead Auction Result Breakdown - Day on Day Change (9/22 vs 9/21) The graph above ... » read more
Tuesday Sep 22, 2020   
Since the beginning of the summer injection season the total net pipeline flows from Canada into the United States has been posting near 5 BCF. This was.3 BCF below last year. Maintenance and construction on GTN and Westcoast Pipelines trimmed volume delivered into the Pacific Northwest. But since the beginning of September the total net pipeline volume has made a downshift to just 4.3 BCF. That is 1.5 BCF less than September 2019. There are a number of factors for the decline in volume but the foremost is the fact that downstream markets in the US just do not need the gas. Lower 48 gas markets especially in the Northeast and Midwest have too much gas at the moment. Cash markets are doing their best to price out imports. This will help avoind oversupply conditions for the next ... » read more
Monday Sep 21, 2020   
Fall is in the air across the northern portion of the country while the Gulf of Mexico/South Central region is looking at yet another hurricane to move onshore later today.  The constant movement of the jet stream across North America keeps each region on its toes as both power and natural gas balancing is still dealing with the pandemic fallout.  This includes students settling into their virtual classroom settings and watching sporting events that have no fans (or very little) in the seats.  The National Basketball Association (NBA) saw an amazing Game 2 of the Western Confernce Finals between the Los Angeles Lakers and the Denver Nuggets.  Without going into too much detail, Denver erased a double digit deficit in the final two minutes of the game to go up by 1 ... » read more
Friday Sep 18, 2020   
EGPS’ recent work in the battery space has been enlightening to say the least. More so than any other market we’ve looked at, the value drivers of batteries are not well understood and there is a tremendous disparity in people’s views of battery revenue opportunities in the future.  In today's blog, we take a look at a couple of trends to which led us to publish Newsletter Article titled 'Battery Ecosystem' where we go in-depth on how the battery market is evolving within the CAISO markets.  If you would like to purchase the report outright, you can click on the link provided with the title.  If you would like to receive future articles along with historical ones written, they are a part of our Newsletter Gold Package.  We offer a Platinum ... » read more
Thursday Sep 17, 2020   
In the energy space, getting a handle of what Mother Nature has up her sleeve is important as it is a key driver to the overall supply/demand picture when it comes to the electricity supply stack and the natural gas storage levels.  When you think about the electricity landscape, the days of putting degree days into some regression model to come up with an hourly demand profile have been replaced with taking into account wind speed/direction, humidity and cloud cover to get as good handle on both wind generation and the solar profile for a given day.  The former has changed the landscape of the West, Texas and many part of SPP as each region is a leader in output depending how you slice the data.  The latter is something that has established itself as the goto renewable ... » read more
Wednesday Sep 16, 2020   
Sports have been around for ages and fun to watch.  Being a loyal Green Bay Packer fan, nothing is better than watching the 'Green and Gold' take on the might 'Purple' team to the northwest (Minnesota Vikings) and come out victorious during Week 1 of the National Football season (NFL).  It is ironic that the weekend was filled with ravaging wildfires hitting both Oregon and Washington state while California was seeing a 27% increases in their early fire season causing evacuations throughout where close some were able to hunker down at nearby the residence of nearby family members.  Talking to one friend, her parents left their home in Oregon City with their cat and stayed a couple of nights.  The Sunday was filled with watching football, eating pizza and tracking ... » read more
Tuesday Sep 15, 2020   
Today is landing day for Hurricane Sally. The storm is expected to hit as a category 2 hurricane on the Alabama Coast and immediately weaken back to a tropical storm. Unlike Hurricane Laura this storm is going to move over land very slowly dropping heavy rains throughout the Southeast. As a result NOAA is forecasting "catastrophic flooding" on their latest discussion with rainfall totals exceeding 6 inches from the Alabama shore all the way into the Carolinas. We will have to wait until next week before the the remnants have cleared out to the Atlantic Ocean. Electric demand will suffer during the event with Entergy, Southern Company and Duke Energy all seeing downward revisions in load.  Figure 1 | NHC Track for Hurricane Sally The storm effect will compound what we see as an ... » read more
Monday Sep 14, 2020   
It has been a couple of weeks since Hurricane Laura rumbled through the Gulf of Mexico and made landfall in the heart of Cameron Parish, LA.  The point where the winds and rain swirled from water to land was at the heart and center of the Liquified Natural Gas (LNG) facilities known as Cameron and Sabine.  A couple of days prior to the storm moviing onshore, thre region was evacuated where both facilities shut down operations which saw their gas noms shift down to zero.  This left anywhere from 2 to 2.5 BCF of natural gas swirling around the grid and needing to find a home, along with the molecules that were tied to the power plants and processing plants in the region that were hindered by power outages and flooding. Figure 1 | Cameron Parish - Hurricane Laura Since the ... » read more
Friday Sep 11, 2020   
I see a lot of numbers in a day – prices, volumes, heat rates, spreads, shape values, and many more. Sometimes the numbers are harmonious with one another. Sometimes there is dissonance. In the last couple of weeks, if the numbers that I’m looking at were musical notes, they would sound more like a third-grade school band concert than the New York Symphony. Nothing gets under my skin faster than what I call a “jacked up vendor curve.” What is that you ask? There are a small number of “bankable” curves put out by large energy analytics shops. These vendors publish hourly curves going out through 2050. Some provide 8760 hourly values for each year. They have an hourly price for Hour Ending 13 on January 16th 2042 and a different hourly price for Hour ... » read more
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