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Wednesday Jul 21, 2021   
The spreads to ship U.S. LNG abroad just keep getting stronger and stronger.  The latest lever has been a record-setting heatwave hitting Europe the past 14 days.  This perpetuates a summer of extraordinary heat both in Europe and Asia, keeping global LNG demand figures strong this summer. The EU is experiencing a heat wave with record-setting temperatures.  The UK national weather service has issued a variety of "extreme heat" warnings effective through Friday.  This is the first time in the history of the national weather office that a heat warning has been issued.  While the central and southern tier of continental EU is getting saturated with intense rains and devastating flooding, just north of that weather system record high temperatures are being challenged ... » read more
Tuesday Jul 20, 2021   
The month of July has delivered temperatures across the East, Midwest and South Central that are more geared towards the end of spring and not that of the middle of July.  As a result, the power demand numbers have been coming in below that of last year and with incremental renewable penetration across ERCOT and MISO, we are looking at net load numbers that move even lower compared to the 2019 July campaign. Figure 1 | Weather Forecast Degree Days Compared to 7/20/2021 The table above displays the current weighted average temperature for each region we monitor when it comes to weather cities across the Lower 48. The black highlighted temperature column represents July 20th, 2021 and the respective forecast, the cells to the left are the actual deviation from today's forecast ... » read more
Monday Jul 19, 2021   
There is an old saying that is referenced with one is in a hurry and needs to get out the door.  It is referenced in sports as the team that is behind needs to start making a dent into the deficit that is in play.  In essence, the reference is that something needs to be done as time is passing quickly; in simple terms it means to hurry up!!!.  In the energy market, the clock seems to ticking in the west when it comes to Mother Nature and her push to keep heat in the mix, bring on dry lightning thunderstorms and ravish the hillsides with fires that are as far north as Western Canada and all the way down into the Desert Southwest and Southern California.  Firefighters are working so hard and I am sure the feel they are up against the clock when it comes to ... » read more
Friday Jul 16, 2021   
Over a week after the flames began in Southern Oregon, the Bootleg fire remains the largest wildfire currently burning in the United States, covering an area more than 227,000 acres.  Figure 1 shows a satellite image of the Bootleg fire raging on the evening of the 14th.  As can be seen from the image, the size and scope of the blaze has been massive, interfering with transmission from the Northwest down into California as the smoke and flames led to both the AC and DC lines being derated starting last Friday afternoon.  The DC transmission was impacted until this past Tuesday, with AC transmission taking longer to be fully restored.  In the DA schedules for today, the flows along PACI into CAISO are still 800 MW below the levels seen last during the evening of ... » read more
Thursday Jul 15, 2021   
Over the past couple of years, the renewable landscape has been transitioning from purely wind and solar to that of wind, solar and batteries (Report - Batteries in the CAISO...).  We have described how the batteries first go after the ancillary service market when available as the flexibility is primed for such markets. By entering such markets, it is freeing up other resources that were once applicable to move into the energy space to which then starts changing the supply stack marginal cost all else being equal.  The progression of new battery capacity is such that when it gets to a certain point, the ancillary service prices start to shift lower and some of their original attraction (profit) is now gone leaving the battery fleet to find its riches someplace else (Article - ... » read more
Wednesday Jul 14, 2021   
The heat that has been pummeling the West (particularly the Pacific Northwest and Western Canada) has been justifiably capturing the energy market headlines over recent weeks.  Forecasts for the rest of the country have not garnered as much notice due to the absence of relatively extreme heat, plus frequent forecast revisions tending to swing cooler.  But as summer trudges along, the market is quietly registering hotter than normal, with indications the trend will continue.  Figure 1 shows forecasts for Lower 48 cooling degree days (CDDs) to the end of July as published during different times the past few weeks.  The yellow band is the range of forecasts published over the past two weeks.  The dashed blue line is the forecast for the same forecast period but as ... » read more
Tuesday Jul 13, 2021   
California has had a bad run of luck this year. The lack of rainfall and snowpack has left the state high and dry for hydro power resources. The output is approximately one third of normal which is causing the natural gas thermal generation throughout the state to make up for the difference. But this has not deterred SoCal Gas from filling its storage caverns. The utility raced ahead with injections all spring taking the inventory to just a couple of BCF from full. This is seen as a positive for a system that will have to make up for the shortfall in hydro generation. But as storage fills to the top the system flexibility falls. The ability to inject is a buffer against high inventory conditions. That was expected to be the operating condition until this week's forest fires in Oregon ... » read more
Monday Jul 12, 2021   
The West heat has been getting all the press as late given the fact that the likes of Boise, Spokane and now Western Canada are seeing continued record breaking highs and it is only July.  As we move down south, the likes of Death Valley and parts of Nevada and Arizona are feeling the sweltering heat with records breaking as well.  Such heat has wreaked havoc within the water sector as conservation has been the main theme the past couple of months given that there is not enough to go around for agriculture, consumption within cities and for the electricity hydro system.  We have all seen pictures of lakes across the region, including Lake Mead, Folsom Lake and Oroville's lake that sits behind the dam. Figure 1 | Lake Mead's Water Level With the heat conversation and it ... » read more
Friday Jul 9, 2021   
The western US is facing the tightest market conditions in twenty years. Last week the CAISO put forth its call for additional RA capacity under its emergency authority. The Northwest experienced searing heat and record-breaking temperatures. The CAISO RA program has significant flaws. The non-CAISO WECC has no RA program in place at all. The Northwest Power Pool has been working on an RA program that appears to both have a good chance of getting off the ground and largely hits the mark in terms of preliminary design features. In May, the Power Pool released a document summarizing the work done so far and the path forward. On August 3rd the Power Pool is hold an “RA Symposium” where they will ... » read more
Thursday Jul 8, 2021   
The Western power markets have been front and center for some time as the Desert Southwest has led the charge.  This all stemmed from last summer when the California market ran into a little bit of trouble balancing their grid on a Friday evening in the middle of August (2020).  The result was for CAISO to have its first energy-related rolling blackout in two decades up in Northern California.  As the weekend passed, the scramble was on to make sure there were enough megawatts available to the system operators so that the situation would not occur in the immediate future as temperatures were still rising.  The following Monday saw the market explode in the Desert Southwest as CAISO came out with the verbiage that they were cutting exports which meant that the Desert ... » read more
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