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Wednesday Oct 10, 2018   
A couple of years ago, the Alberta Power Pool (APP or AESO), was a forgotten market as the supply stack was full of coal operated assets and the natural gas component was somewhat steady as the Marcellus/Utica production was keeping the price at AECO at moderate levels.  This all changed last year as the pipeline maintenance tied to TCPL impacted the gas distribution system to a point that entities could not put the molecules into storage.  This wreaked havoc in the cash market as a glut of supply did not have a home, so the only option was to price the spot market accordingly so the gas would be shut-in from the production fields.  Their was only one problem, the natural gas incremental supply was coming from associated gas plays as well as new wells in the northern part ... » read more
Tuesday Oct 9, 2018   
There is one last storm headed for the Gulf Coast before we typically end the hurricane season. The National Hurricane Center has the track moving into the Florida Panhandle. There are a number of risks from the storm effect. Production is the immediate concern with Transco, Sonat, Destin and Discovery in the vicinity of the storm. After that the damage risks extend to the coast with processing and refining facilities to the west of the track and the Southern Company service territory dead ahead.  Figure 1 | NHC Hurricane Michael Storm Track In previous storm events we have seen up to .6 BCF of volume drop off the total. As of right now we estimate only .22 BCF has been shut in. If the track shifts to the west we will see additional volume come off the system. A move towards Mobile ... » read more
Monday Oct 8, 2018   
If you have ever been to Spain, especially Barcelona, a drink of choice in the summer months is called Sangria.  It is a mixture of brandy, red wine, some lemon and orange juice, sugar and the the every popular Triple Sec liqueur all swirled together with fresh fruit in a pitcher waiting to be poured.  Triple Sec is a strong, sweet and colorless orange flavored liqueur enjoyed by many when they are out and about enjoying a cocktail other than Sangria, such as a Margarita, Kamikaze, Spiked Long Island Iced Tea or a drink called a Side Car. Figure 1 | Triple Something - Sec, H and A If you are a World Wide Wrestling fan, you might have hear of the iconic Triple H as he was once the face of the franchise during several Westlemania events across the country.  Turning to ... » read more
Friday Oct 5, 2018   
The U.S. power grid is undergoing a unprecedented transformation with the integration of renewable energy resources and the retirement of many base load fossil units, especially coal.  By most accounts this transformation is far from over: renewables are continuing to grow and batteries and other new technologies are making their way onto the grid.  With all this change in the power sector, one thing has not changed much at all: the way you connect a generator.   Figure 1 | Get In Line...... Transmission-owning utilities and RTOs have been obligated to connect generators on nondiscriminatory basis since FERC issued Order 888 in 1996.  But buying grid access is not like other utility services that have posted prices.  An interconnection request begins a ... » read more
Thursday Oct 4, 2018   
During the shoulder months, the temperatures tend to shift into a comfortable range. With demand for air conditioning and electric baseboard heating remaining relatively low, demand throughout electrical grids subside. This is when generators decide to take time to perform routine maintenance. As facilities go offline, more costly units can be pulled into the market in order to meet even below average electric demand. We have seen this occurring throughout the ISONE with several maintenance outages currently in place. With so many outages across the system, the system has performed admirably. Although the locational marginal prices have increased, the market has managed to hold it together making the best use of its available resources. The first outage was not throughout the electric ... » read more
Wednesday Oct 3, 2018   
After a summer of hot weather, the fall season usually brings the leaves changing color and plenty of football for all the college/professional fans to watch any given weekend.  What we tend to forget about is the shift in the Renewable component that is known as wind generation.  During a football game, you can see the little flags on the field goal posts indication the direction and the speed of the wind while the actual kickers making a motion with their hands on how the wind direction impacted the missed field goal. A couple of weeks ago, that was the case when the Green Bay Packers kicker missed the game winning field goal with no time left on the clock.  After the two teams tied, the kicker was talking about how the cross wind in the stadium played a roll in the ... » read more
Tuesday Oct 2, 2018   
The injection season is closing fast. There are only five weeks left before the natural gas industry switches over to withdrawals. Although most of the country adheres to the switching from injections to draws, the South Central typically injects volume through the month of November. This year that is almost a certainty as the Salt storage inventory has not seen a solid build since the middle of June and is now posting 173 BCF.  That is 123 BCF less than last year and 23 BCF less than where they were at the beginning of the summer injection season.  Figure 1 | EIA South Central Salt Storage Inventory for 2014 - 2018   Despite the jump in North American Production as well as the increase in pipeline flows to the Gulf, South Central demand has overwhelmed the balancing. » read more
Monday Oct 1, 2018   
We have discussed the two hurricanes that have turned into tropical storms in the Gulf of Mexico and the eastern seaboard along the Carolinas.  Both brought the substantial precipitation, in the form of rainfall, to both regions as well as impacting the electrical supply grid by shutting down any nuclear facility in their respective path as well as coal/natural gas units tied to flooding of some sort.  Both of the storms fell in the heart of hurricane season tied to the Atlantic Ocean. Figure 1 | Hurricane/Tropical Storm Florence's Path As we start the new month of October, the hurricane season is not over as we have seen some late storms roll into the Gulf of Mexico over the years.  As it stands right now, we need to be directing our attention over to the Pacific Ocean as ... » read more
Friday Sep 28, 2018   
As the California ISO (CAISO) continues its efforts to integrate and balance ever-increasing slugs of renewable energy (mostly solar), the other institutions which impact the CAISO markets are not doing them any favors. Figure 1 | CAISO Hourly Net Load Profile  Last April the CAISO published an excellent report titled “Second Revised Flexible Capacity Framework.” Admittedly, it has a boring title, but this report provided great detail about two inter-related challenges. One challenge was simply the magnitude of the evening ramp – the neck of the famous Duck Curve. The second, and more interesting, challenge is the uncertainty around the size of this ramp each day. They looked at 2017 data and compared day ahead schedules for load and generation and calculated for ... » read more
Thursday Sep 27, 2018   
The PJM fuel mix just reached new lows in the coal to gas ratio. The discovery of the Marcellus and Utica shale basins located within the PJM footprint have propelled the construction of new natural gas combined cycle power plants. These generators are among the most efficient facilities on the grid with heat rates that continue to decline. With cheap fuel and efficient operations, the facilities’ break even costs allow them to run as baseload generation. This has driven coal higher up the supply stack causing less efficient units to retire. Looking at Figure 1, we can see the coal to gas ratio has trended lower throughout 2018 when compared to the previous year. Earlier this month, we hit a new low as the ratio fell past the 0.6 level. Figure 1 | Year over Year Coal to Gas Ratio ... » read more
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