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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
Thursday Jan 27, 2022   
The short sprints tied to colder weather patterns seen in the middle of December 2021 and early January 2022 across the Midwest, Ohio Valley and Northeast have transitioned into more like running the 400m or 800m race at a track meet.  If you look at the current forecast for the 6-10 and 11-15 day periods and slightly beyond, the mid-tier races are forming into the 800m and 1600m relay races that require passing off a baton within a defined length within each lane on the track.  The finally of any local track meet is tied the longer duration races such as the old school 2-mile or now better known as the 3,000/3,200m race where everyone is bunched up at the starting line and the staggering is quickly eliminated as the runners jostle for the inner most position in the closest lane ... » read more
Wednesday Jan 26, 2022   
As we move into February, the 14-day weather outlooks will start moving into a window in which year-on-year comparisons will incorporate last winter’s Winter Storm Uri.  The brunt of that event came during Valentine’s Day, triggered colossal infrastructure failures in Texas that led to fatal blackouts, and spiked gas and power prices across North America to record high levels that were multiples greater than the previous highs.  Anytime the “unthinkable” happens it moves from being “conceptual” to “possible”.  As we approach the one-year anniversary of Uri, it poses the question: what happens to ERCOT if Uri-like conditions return? Figure 1 | Weather forecasts for the start of February for ERCOT are starting to hint at cold ... » read more
Tuesday Jan 25, 2022   
Tomorrow is expected to be one of the coldest days of the year for the North American continent. Population weighted heating degree days are going to push up to 39 which eclipses the polar event experienced last February. That weather event knocked out power to millions of residents in Texas causing one of the biggest energy infrastructure failures in history. Most of the Midwest, Northeast and Eastern Canada will see average temperatures post 15 to 20 degrees below normal. Since it is the coldest day of the year it has the potential to be also the highest gas demand day of the year as well.   Figure 1 | WSI Average Temperatures and Departures for Wednesday January 26 Lower 48 heating load is forecasted to be 59 BCF per day for Wednesday January 26. That will be the highest ... » read more
Monday Jan 24, 2022   
The Alberta market has been relatively tame over the past couple of weeks as temperatures are not quite as cold as once seen earlier in the month.  The power grid’s real-time balancing act has incorporated both strong wind generation and a healthy thermal fleet along with plenty of imports from BC and Montana.  Sunday evening, the marginal cost of energy started to shift dramatically during HE 21 as the price tickers within the hour topped the $100 mark and has not looked back as the latest tick came in just under $700 for the second time since half past the hour. Figure 1 | Alberta Real-Time Price Settles As you can see from the table above, the volume in the right-most column varies while the price handle is soaring to recent highs.  Looking at the grid operations ... » read more
Friday Jan 21, 2022   
Author | Tim Belden This is my first blog of 2022. As we settle into the New Year I thought I’d take the opportunity to share some share some observations related to the trends we are seeing from the work streams that come across our consulting desk.  The Bulls are Running: We wrote extensively over the last 18 months about the bullish factors in the wholesale electricity and the renewable energy / energy transition space. On the energy price side of things, we saw natural gas prices bottom out in Q2 of 2020 and steadily rise since then. The figure below shows the prompt month natural gas futures contract over the last five years. The markets got pretty hyped heading into the winter and are off from the highs. However, the markets are up a good $1.50 ... » read more
Thursday Jan 20, 2022   
Colder weather is moving into the South Central regions, for the purposes of this newsletter blog specifically Texas/ERCOT.  This means all eyes will be on the natural gas production component along with the happenings in the control room within ERCOT as management has spent the past 11 months honing in on reliability and availability.  It should be noted that the temperatures are not as dire as Storm Uri, but the next couple of days is the coldest stretch of the winter season to date.  Figure 1 | ERCOT Net Load - 7 Day Rolling Average The graph above represents the ERCOT net load rolling 7-day flash average for each day and compares the past three years.  The grey line is the forecasted tied to the demand volume to which is the highest the grid operators have seen if ... » read more
Wednesday Jan 19, 2022   
EU storage inventories continue treading at relative record lows, but the new year-to-date has provided a bit of relief with mild weather and featuring a brief period of injections.  The deceleration of draw-downs has helped narrow some of the annual deficits, but hasn’t quite been enough to bring current inventories out of record-low territory.  And, while all of this has eased some of the price pressures on European and Asian prices, forwards remain astonishingly strong. Over the past month, we have been pushing out a series of flashes as part of our EU Storage dashboards describing how the storage situation has unfolded.  The European winter got off to a strong start weather-wise this year.   Compounding issues, Russia – a major supplier of gas to ... » read more
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