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Tuesday Oct 1, 2019   
Canadian storage has been a feast or famine story for much of the past year. Alberta, which contains most of the country's storage capacity is under duress with only 256 BCF of in ground supply available for the winter heating season. That is 59% of the storage capacity of the province. On the other side of the country, the Dawn storage cavern has just reached full capacity of 156 BCF with another 30 days left in the injection season. That is the quickest they have been able to refill the cavern in recent times. The problem is how do they balance the delivery area with no available capacity to inject excess volumes. Figure 1 | Dawn Storage Inventory for 2015-2019 The hub will have to price at a discount to surrounding areas to back off pipeline transport flows. The first to go will be ... » read more
Monday Sep 30, 2019   
Over the past few years, the electricity grid has seen its supply stack change in a way that is making the daily activities in the physical market different than what is once was.  For example, when I started my career in the energy industry (late 90's), the supply stack was made up of a baseload nuclear fleet, coal units and a natural gas fleet that was used for load following.  In the West, we had the volatility around the hydro water year that made the region unique compared to others across the country.  The reserve markets were the traditional ones such as reg up, reg down and spin/non-spin and they were tied to load profile as well within the construct of a Balancing Authority (BA) or an Independent System Operator (ISO). Figure 1 | Old Traditional Power Grid In the ... » read more
Friday Sep 27, 2019   
The smmer months in Texas have been quite exciting and volatile with the month of August giving us cap prices for a number of hours.  This was in part due to the ever growing wind capacity not seeing the light of day as the actual output dipped down to below 2 GW within the hourly 5 minute increments.  This is substantial given the cumulative generated capacity on the grid is currently 19.5 GW. Figure 1 | ERCOT Wind Breakdown - Monthly The bigger issue in my wind is tied to the overall ERCOT load growth we are seeing on a daily basis as each region has its own story.  For example, the Gulf of Mexico coastal region is tied to the growth of LNG facilities and the power demand that goes with each tran/project.  It has been estimated that each facility takes on ... » read more
Thursday Sep 26, 2019   
Three Mile Island is the latest nuclear generator to be retired. The facility originally commenced operations in 1974, but has seen its share of turbulence. Just five years after commissioning, there was an incident at Unit 2 which leaked nuclear radiation into the surrounding area. While by no means a Chernobyl event, this was enough to decommission Unit 2 for good. 40 years later, new pressure from cheap natural gas generation has lowered power prices enough to push nuclear generation out of the money. Figure 1 | Three Mile Island Nuclear Several additional facilities have also made their way offline recently. These have generally come from facilities with only one unit which aren’t able to reduce capital overhead by combining multiple units in one facility. The fallen generators ... » read more
Wednesday Sep 25, 2019   
In the coming days we will see a big shift in the North American climate. A ridge is developing right through the continent that will set up a cool west/warm east dynamic. For most of the country this will continue the above normal cooling load. But for Western Canada, this will be their first taste of winter. Average temperatures in Calgary will drop from 50 to 31 degrees which will take the Nova Intra load up from 4.8 to 5.5 BCF per day. This is going to occur when the distribution system is still undergoing summer maintenance. For most of the past seven months they have been plagued with a number of forced and planned outages that have restricted access providing a very tight balancing dynamic. As a result the Alberta gas storage inventory is posting 81 BCF behind last years refill ... » read more
Tuesday Sep 24, 2019   
if you have ever been to the doctor with someone who is afraid of getting poked in the arm with a needle for either an IV or to draw blood, you know what I mean when I say needles hurt and can make people act in a way that is different than their normal self.  The energy market in ERCOT and Califronia work the same way when it comes to market dynamics playing out where the middle of the afternoon/evening ramp show a large spike in the outright power prices therefore expanding the implied heat rates.  Such periods start to create a shape similar to a needle poking out of the hourly pricing profile that warrants the attention of many.  Most of this type of price action is driven by the load forecast demand coming in higher than expectations thus making the grid shorter while ... » read more
Monday Sep 23, 2019   
As we work out way through the last week of September and roll into October, the power grids continue to be dynamic as the power demand has spurts of warmer weather still while the supply stack is ramping up its outage season where nuclear, coal and natural gas plants are offline for their annual maintenance.  The other element that starts to disrupt the power supply stack is the transmission capacity reduction tied to work on a specific line.  Each and every one of these components starts to move the supply stack's volume in a way that impacts the marginal cost of energy. In the Pacific Northwest, the supply stack is getting longer as the AC transmission line just reduced its capacity  for some planned maintenance.  The reduction will last all week and next therefore ... » read more
Friday Sep 20, 2019   
I have to admit, it’s a lot of fun when an argument breaks out between electricity market design geeks. By “geek”, I mean people who are knowledgeable, take electricity market design seriously, and have the chops to think about these things. Last month, an outfit called Grid Strategies put out a paper titled “Consumer Impacts of FERC Interference with State Policies – An Analysis of the PJM Region”. If that’s not a New York Times best selling title I don’t know what is! This week, an outfit called Monitoring Analytics, which just so happens to be the PJM Independent Market Monitor (IMM), published a memo with an opening line that states “Grid Strategies published a report … that relies on an analysis by the Independent Market ... » read more
Thursday Sep 19, 2019   
Renewables have been a long time coming throughout the PJM footprint. While wind generation made an appearance throughout the West, total renewables still only represent a sliver of total capacity in the ISO. The tide appears to be turning over the next four years with the interconnection queue showing a large ramp in renewable capacity. Contrary to the previous wind buildout, the new renewable capacity appears to be largely composed of solar generation. Figure 1 | Sunny Weather Renewable capacity additions appear to rocket up with over 40 GWs of generation in the queue. Solar generation composes the majority of new renewables with over 35 GWs throughout the same time period. Wind generation, by comparison, is just a fraction of this with less than 5 GWs in the queue. Storage is also ... » read more
Wednesday Sep 18, 2019   
If we were in the months of October/November, the corner street drains would be filled with massive amounts of water as the leaves from the trees would not have been swept away yet.  If this was December, the conversation woud be around the Bonneville tailwater levels being quite high as the fish eggs are being laid and details around the impact of the river system as we move further into the water year.  The reality of the situation is we are now in the middle of September and it has been one of the wettest on record with 14 days to go and a forecast calling for more rain. Figure 1 | The streets of Portland and the rain I thought it would be good to give everyone not living in the beautiful Pacific Northwest a glimpse of what has transpired. First, it has been a record ... » read more
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