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Thursday Feb 10, 2022   
As part of our Newsletter Platinum Renewables package we break down the market fundamentals in different regions across the country each month, with a focus on the events most relevant to the renewable landscape.  Our most recent Renewable Monthly report, titled “Mild West, Frigid East” drills down into the mild weather and excess storage that has accumulated in the SoCal Gas system throughout the month of January as well as the changing CAISO supply stack.  The report also discusses the frigid winter weather that has blanketed much of the Midwest, Ohio Valley and Northeastern United States in recent weeks.  Down in the South-Central region, we drill down into ERCOT, touching on structural changes in ERCOT load and how these changes and high gas prices are ... » read more
Wednesday Feb 9, 2022   
Former president George W. Bush sometimes slipped up his words when giving impromptu speeches.  One famous gaff came when he tried giving a phrase about learning from mistakes.  He said, “There’s an old saying that says, ‘Fool me once, shame on…shame on you.  Fool me – you can’t get fooled again.”  While he didn’t exactly get the phrasing right, those familiar with the phrase knew what he meant: if you don’t learn from your mistakes, its on you.  Last week’s ERCOT power market seemed to show it wouldn’t get fooled again by a winter storm.  There were a few major factors that enabled the market to weather last week’s winter storm that featured the coldest temperatures to hit Texas so far ... » read more
Tuesday Feb 8, 2022   
Heading into this winter it was assumed that the record natural gas production levels in Alberta would more than offset gains in demand and exports leaving the province with plenty of storage inventory prior to next summer. Total natural gas receipts were posting 1 BCF per day higher at 14.3 BCF. That was 1.2 BCF per day more than the previous year thanks to increased pipeline capacity out of the British Columbia foothills.  It was the single largest year on year increase in production which started the music for a large sign up in export capacity on TransCanada Pipeline and Gas Transmission Northwest. This was expected to be an orderly balancing year for Alberta with receipts posting at record levels.   Figure 1 | Nova System NG Production But then December ... » read more
Monday Feb 7, 2022   
ERCOT continues to lead in conversation with the first real cold weather test passing with flying colors.  As it stands, both the power and natural gas markets did what they needed to so that the heating demand and power consumption was met across the state.  In fact, many took it as a bearish signal as the natural gas spot prices did not jump above the $6.50 mark at Houston Shipchannel and stayed in a nice low double digit level in West Texas (loss of production).  As we like to say around here at EnergyGPS, natural gas needs higher power prices to escalate the bottom line indices or if molecules are actually scarce.  At the end of the day, neither of the two were in play as the renewable sector in ERCOT saw wind show up in groves and the solar output pick back up ... » read more
Friday Feb 4, 2022   
Last May, we published a blog about the Friday Burrito’s annual CAISO curtailment-guessing competition. We’ll reiterate here—the Burrito is an excellent weekly newsletter from Gary Ackerman that is available to those working at a member of the Western Power Trading Forum (WPTF). The competition involves guessing, at the beginning of May, the total amount of MWh that will be curtailed in CAISO over the year. All those who get within 1% of the total split the $250 prize pool. As you may have already guessed from the fact that we’re bringing this up… we won! We had to split the prize pool with the two other winners, but the real prize is the bragging rights. The actual number turned out to be 1,504,676 MWh, with our guesses a little above and a little ... » read more
Thursday Feb 3, 2022   
Slightly less than a year ago now, the middle vertical third of the Lower 48 footprint was under siege by Mother Nature with the focus being on the Lone Star State.  This was due to the short-term forecast building up a block of days where temperatures sat below the freezing level on average during the day from Dallas/Ft Worth all the way down to parts of the border to Mexico. Such an event has never been seen in the magnitude that was formulating and as it unfolded, the weaknesses of the power and natural gas grid became apparent as ERCOT was on the brink of total catastrophe one Saturday evening while pipelines lost production along with key compressors due to power failure or some other issue tied to the extremely cold temperatures.   As it stands right now, the past 11 ... » read more
Wednesday Feb 2, 2022   
I had a buddy in college who, whenever we would encounter a totally ridiculous, unimaginable situation, would remark: "Well.  This is what we trained for."  Well: this week's cold front moving into Texas is what ERCOT has trained for.   The ERCOT grid will face its toughest test of reliability since last February's Winter Storm Uri.  So many of the themes we've been discussing through the year in our ERCOT power and South Central gas market reports are lining up to participate in this week's events, posing the risk of elevated and volatile prices.  The governor and other state politicians have staked their careers on the efficacy of reforms put in place since Uri triggered widespread and fatal blackouts, with the governor issuing a guarantee the lights will ... » read more
Tuesday Feb 1, 2022   
In the never ending saga for SoCal Gas and the Aliso Canyon storage cavern this week saw a turn where the utility admitted they now have too much gas heading into the final months of the withdrawals season. Prior to the start of winter SoCal Gas was charged with injecting more volume into storage in order to have enough withdrawal capacity to meet the peak demand days of winter. The beleaguered Aliso Canyon cavern added 7 BCF taking total inventory on the SoCal system to 89 BCF. But an increase in import capacity combined with a mild turn in the weather this December thwarted efforts to get gas out of the ground.    Figure 1 | SoCal Gas Storage Inventory for 2018 - 2022 Part of the rules instituted by the California Public Utilities Commission for Aliso Canyon Withdrawal Usage ... » read more
Monday Jan 31, 2022   
Storms come in all varieties as the South Central and Gulf Coast deal with hurricanes throughout the summer while just north of these regions take on tornadoes as high/low pressure system collide and create the swirls that have nicknamed parts of Oklahoma as tornado alley.  Out West, we have the Santa Anna winds and wildfire risk that are unique ‘storms’ these days as they create devastation unlike no other.  Up in the Pacific Northwest, the latest type of storm to enter the region was that of last June/July when temperatures reached 118 degrees in many cities that maybe hit triple digits a handful of days throughout the entire summer months.  This was labeled as a ‘heat dome’ and with the warming global environment; it could be considered a new age ... » read more
Friday Jan 28, 2022   
The hydro system in the Pacific Northwest has been off to a strong start so far this winter.  The precipitation was heavy and frequent throughout the month of December, leading to flows in the Upper Columbia 50% higher than is usual.  Mountains all across the region got a head start on snow accumulation and hydro generation averaged 16.3 GW for the month.  Through January so far, the average flat generation is even higher at 17.3 GW, well above the past several years.  The warmer temperatures and drier conditions seen in the Northwest starting a few days into the month have had an effect on system conditions, however.  The figure below plots the snow water equivalent (SWE) in the Cascades over time, with a blue line for the current water year.  Figure 1 | ... » read more
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