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Wednesday Sep 14, 2022   
The phrase ‘Wild, Wild West’ conjures up images of gunslinging cowboys and bustling saloons, but in this case, ‘Wild, Wild West’ refers to the events in the natural gas and power markets covered in our monthly report on the western side of the continent. The background is the same with climate change creating arid conditions where tumble weeds blow across dried up lake beds, but our cast of characters is a little different. Rather than a ragtag team of men on horses, we looked at the CAISO, the Desert Southwest, the Pacific Northwest and more. In this blog, we’ll be focusing on the wild (Pacific North)west, but check out the monthly, titled ‘Wild, Wild West’, to read about the rest of the characters. Figure 1 | Wild, Wild West The Pacific ... » read more
Tuesday Sep 13, 2022   
There is only seven weeks left to the end of the injection season providing little time for many storage caverns across the Lower 48 to make up ground on their year on year deficit. While most of the attention is devoted to the South Central caverns, particularly the salt storage inventory, the issue is also present in the Midwest and East regions. According to the last EIA inventory report the combined Midwest and East storage levels are 122 BCF behind last year and a combined .7 TCF from capacity. But breaking down the individual caverns in each are tells a better story on where the deficits are going prior to the start of winter. Looking at DTI and TCO caverns, which are the largest cavern systems in the East region, suggests the deficits will continue to expand.  Figure 1 | ... » read more
Monday Sep 12, 2022   
The big sigh you heard over the weekend came from the CAISO system operators as the grid finally saw a break in the overall heat that smothered the state all last week.  It was a time when the system alert process did not have to send out any emergency notices with a numeric number that when increasing indicates the CAISO is one step closer to resorting to rolling blackouts as the only solution left in the handbook. Figure 1 | Energy Emergency Alert (EEA) Notice The good news is that CAISO was able to avert the rolling blackouts by turning on every thermal generating unit at its disposal within the LA Basin, up through the middle of the grid (Kern) and that of PGAE.  These units needed to be running during the middle of the day to make sure there was enough power for the ... » read more
Friday Sep 9, 2022   
This past Tuesday, September 6, California broke its all-time demand records when it peaked above 51 GW in the early evening. According to the CAISO’s peak load history going back to 1998, load has only ever broken 50 GW twice, once in 2006 and again in 2017. Even in 2020, the maximum observed load was only around 47 GW. Figure 1 | CAISO Forecast, DA, and RT Load, 9/4/22 – 9/8/22 The record-breaking demand on the 6th was immediately followed by loads on the 7th that would have at least come close to the record (and maybe set it) if not for the bar set by the 6th, and at the time of this writing demand on the 8th is still climbing. Figure 2 | DAM and RTM Prices at NP15 and SP15, 9/4/22 – 9/8/22   As demand has escalated, so have prices. The graph above shows NP15 ... » read more
Thursday Sep 8, 2022   
Even after a sharp drop of inflows into the US portion of the river system over the latter half of August, the Pacific Northwest proved it has at least one more rally in it this summer.  The PNW hydro system has responded in a big way to the current heat wave blanketing the West producing record-breaking temperatures in California over the last several days.  As heat rates in SP15 and NP15 yesterday reached 28.8 and 36.4, respectively, calling every available thermal unit in the Sunshine State into action and lingering heat in the Northwest left the region needing every available MW as well, the hydro system sprang into action.  It reversed the course that had heavy load generation falling from 13 GW on the 1st of September to below 10 GW last Saturday.  The figure ... » read more
Wednesday Sep 7, 2022   
As California prepared for tight grid conditions over Labor Day weekend, the state legislature was hard at work attempting to preserve an important source of supply. The Diablo Canyon nuclear plant was set to retire completely by 2025 with the first unit retiring in 2024. Debates have raged in the past few years over extending the retirement date. Supporters of the plant point to the importance of the plant’s 2,250 megawatts in meeting the state’s ambitious clean energy goals, as well as maintaining grid reliability during times of high demand like this week. Opponents ask important question regarding safety during earthquakes and disposal of nuclear waste. Last week, the California Senate voted to extend the life of the plant for another five years. Figure 1 | Diablo Canyon ... » read more
Tuesday Sep 6, 2022   
News headlines across the country are noting the current power grid issues in California as a heat wave descends upon the state. The California Independent System Operator (CAISO) has sent out several notices depicting the resource shortfall for yesterday and today's delivery. Record breaking temperatures of over 110 degrees in the Bay Area have brought the peak hour demand for today up to 51 GWa. That is three GWa higher than yesterday indicating the grid will be short 2 GWa over the evening peak to meet demand obligations. Under that balancing scenario CAISO would have to utilize demand response as well as load shedding to avoid a grid catastrophe. This is a precarious moment for the entire West as any disruption to generation or transmission is likely to trigger rotating black ... » read more
Friday Sep 2, 2022   
This summer, the Operating Reserve Demand Curve (ORDC) has been quite active. In July, this was to be expected. July was particularly hot, which means more demand and strain on the grid as Texans use air conditioning to escape the heat. To contrast, August has been relatively mild, both in terms of temperature and demand. Despite the mild conditions, there has still been frequent price action in August. We’ll take a look at a a few days from last week that experienced only moderate demand but still saw significant price adders. Graph 1| LMP, ORDC and SPP, 8/21 – 8/27, ERCOT North Hub Above is a graph of ERCOT North’s locational marginal prices (LMP) shown in blue, the ORDC adder shown in orange, and the resulting settlement point price (SPP, the sum of the LMP and the ... » read more
Thursday Sep 1, 2022   
Conditions have been tight in the Pacific Northwest this week, as hydro flows have been on the decline to finish off the month while at the same time temperatures have soared across the region.  Flows into the US from British Columbia at International Boundary dropped to 80 kcfs as of Monday (down from 110 kcfs just last Friday) while the temperature in Portland reached 98 degrees yesterday.  This left Mid C trading more than $50 over SP-15 on Tuesday, reducing MW flowing out of the Northwest down into California over the transmission lines.  River flows at International Boundary appear to have settled down for the time being, which should help slow the hydro slide.  Now CAISO and the Desert Southwest are entering the mix, with the entire Southwest gearing up for a ... » read more
Wednesday Aug 31, 2022   
This summer, EnergyGPS has put out several market flashes on the heat wave and corresponding price spikes in Alberta. Over the last couple of weeks, the 15-day forecast has been awash in red for Calgary, Edmonton, and other western Canadian cities. Only over the weekend has the forecast toned down with red fading to orange as the month transitions to the beginning of September. As fall approaches, we’ll take a look back at how this atypical August compared to those in previous years. Just how hot was this year compared to previous summers? The figure below shows daily average temperatures for July and August over the last five years. This year is represented in the bottom panel with the second highest print on the board. Average temperatures for this August stand at 67.3 degrees ... » read more
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