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Wednesday Nov 24, 2021   
I first got started in the natural gas world in Summer 2010.  That November, weather across the Lower 48 was trending fairly warm; no significant cold bursts had hit.  As December approached, I recall the more seasoned veterans in our group exclaiming: “If we weather doesn’t show up in the next couple of weeks then winter is over.”  Being new to the gas world, the idea that a season could be over before it ever really got started struck me as quite odd.  But this was a few years into the heart of the shale boom, so I needed to get my head around the fact that there was so much production about to hit the market, that – at some point – if enough space was not cleared out of storage, there would be no need for prices to print premiums over ... » read more
Tuesday Nov 23, 2021   
Last week we presented an issue with the coal operations in the Midwest and Mid Atlantic where output had fallen in response to recent announcements that supply chain issues have constrained operations. Combined PJM and MISO around the clock coal output fell 14 GWa combined during the second week of October. Since then the dispatch of coal on the grid has stayed near all time lows set during the COVID pandemic in Q2 2020. The switch in the dispatch has also set new records for October and November power burns in the two regions. Combined the natural gas consumed for generation is posting 2.7 BCF per day higher than last year. As of yet there is no end to the coal curtailments and as heating demand ramps up into December the power burns are set to continue the record levels absent a ... » read more
Monday Nov 22, 2021   
We’ve seen the impact of the expanded wind capacity in SPP throughout 2021.  With about 2 GW of wind buildout compared to this time last year, average generation from wind in the region was 1.8 GW higher this past September than in September of 2020, 1.3 GW higher in October, and 500 MW higher so far through the month of November.  The easiest place to see the impact of the increased number of wind projects in SPP, however, has been in the curtailment numbers.  Wind curtailments during October represented nearly 12% of all potential wind generation, an all time high.  Furthermore, 34% of all wind generation occurred during hours when the SPP North LMP was less than $0.  During November the numbers have dropped slightly to just under 9% of all potential wind ... » read more
Friday Nov 19, 2021   
The Northwest Power Pool (NWPP) hosted a webinar this week on the Western Resource Adequacy Program (WRAP), formerly known as the Northwest Resource Adequacy (RA) Program.  The WRAP is progressing forward and entering the first non-binding Forward Showing (FS) program (Phase 3A). Figure 1 | The WRAP timeline Source: NWPP Important upcoming activities include getting FERC approval for the program and demonstrating results from the first non-binding compliance period.  Here’s a summary of some of what is at the forefront of people’s minds. Governance | There were a lot of comments and discussion on governance of the program.  Some concerns include representation of members of Load Serving Entities (LSE) who currently do not have representation other than ... » read more
Thursday Nov 18, 2021   
The flooding in the Pacific Northwest has received a lot of attention over the past couple of days given neighborhoods and highways look like scenes from Texas, Louisiana and/or Mississippi in the aftermath of a hurricane.  Similar to such a storm that swirls from the Atlantic Ocean into the warmer waters known as Gulf of Mexico, the Pacific Bomb Cyclone that has dumped an enormous amount of rain in the northwest corner of Washington State and British Columbia leaving residents and observers like myself wondering what it going on with the weather patterns as the summer delivered a city north of the border a record high temperature of 108 degrees and seven months later a new record when it comes to the number of centimeters of rain within a 24 hour period. Figure 1 | Western ... » read more
Wednesday Nov 17, 2021   
If you’re a macro-economics geek like we are, you’ve surely been following some of the discussions around inflation.  Much debate centers on the causes: is it supply chain disruptions?  Overly loose monetary policy?  Demand markets running too hot?  There are also discussions around when it will correct.  In this realm, many fret that, if current inflation trends continue for too long, consumers will gradually be accustomed to higher prices and re-set expectations for what constitutes low and high prices. The energy world is seeing this latter theme play out in real-time.  Last February, North American gas markets got walloped by prices that not only broke record highs, but annihilated the previous records by hundreds – and in some markets ... » read more
Tuesday Nov 16, 2021   
Late last week the meteorological discussions started to report a change in the weather pattern over the continent. The zonal flow pattern which keeps the jet stream moving in a west to east progression is starting to get more amplified due to the set up of two ridges. The first, over Alaska, was going to allow more southerly air to enter the west and Rockies keeping a broad warm and wet pattern over the region. This would also allow air from the northern latitudes to descend upon the eastern half of the country. But another ridge is developing over the North Atlantic. This is more of a blocking event which will prevent any reformation of the jet stream. This will further amplify the jet stream and prolong the duration. The result is a much colder change in the coming days which has ... » read more
Monday Nov 15, 2021   
The EnergyGPS Canadian Natural Gas and Power product has gotten a lot of attention lately as the market fundamentals in the energy sector continue to being elements to the table when it comes to the Lower 48 balancing act along with making sure Alberta has enough molecules come the coldest portion of the winter strip.  On the power side, we have a shifting thermal stack to that of natural gas while wind capacity is such that the 2.1 GW can swing from just under its capacity to that of below .100 GW across a couple of hours.  Such volatility does not sit well on a system that carries anywhere from 9.5 to 10.5 GW of load on a given heavy load hour. Figure 1 | Alberta Power Market Summary – Price/Imports/Wind Such volatility comes from the grid operators relying on the ... » read more
Friday Nov 12, 2021   
  I have come across two entertaining pieces of media in the last couple of weeks that readers may want to check out if you haven’t seen them already. The first is a satirical web site titled “Sunion.” Fashioned after the Onion, it provides fake news stories that are fashioned after real-life events with the goal of entertaining the reader. Their tag line is Satirical Renewable Energy “News” That You Can Trust. Indeed, for those familiar with the renewable energy industry, this is laugh out loud kind of material.  https://www.thesunion.com/ I first heard about this site a week ago when a friend emailed me “someone at work just shared this (site) with me, freaking hilarious.” On Saturday morning another friend was furiously texting ... » read more
Wednesday Nov 10, 2021   
Since early April, Alberta gas production has been frequently breaking record highs.  In addition to the frequency of new records being established, the deltas at which previous records are being bested has at times been quite astonishing.  This is a theme we’ve discussed in depth over the past year with clients of EGPS’ Canadian energy reports, and remains relevant today as we head into winter.  This Thursday, we will be hosting a webinar to discuss this topic alongside a dive into our views on how Alberta gas and power markets will balance this winter.  This week, gas production hitting the TC Energy Nova system in Alberta (NGTL) reached a new daily record high of 12.97 Bcfd.  This was the 8th day this year in which a new all-time record has been ... » read more
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