Featured Articles
| Friday May 18, 2018 | |
| REsurety and EnergyGPS recently released a report analyzing the efficacy of the “P99 wind hedge”, which is the most commonly used wind hedge structure, most frequently used in markets such as ERCOT and SPP. The report is free and can be downloaded here: https://gallery.mailchimp.com/104613d0ee66cc3dcc6a3820d/files/b98da7c4-4d93-45f1-a586-76df5ed905fa/The_P99_Hedge_That_Wasn_t_a_REsurety_and_Energy_GPS_White_Paper.pdf For those readers not familiar with the standard transaction structures in the wind industry, there are two reasonably standard structures: As-Generated (or unit contingent) sale at the project node or a market hub. The project generates and delivers the energy as it is produced to the buyer. This structure is most common for utility off-takes and corporate ... » read more | |
| Thursday May 17, 2018 | |
| AESO just can’t seem to catch a break as the grid was short on supply entering this week causing the LMP to jump to the price cap of $1000 for several peak hours on Monday and Tuesday. As we had mentioned in our newsletter last week, the amount of generation AESO is able to keep on the grid is key to avoiding these price spikes, but AESO is still trudging through maintenance season. With several large facilities offline at the beginning of the week, we can see that this event was no exception. Figure 1 | AESO Hourly LMP May 14-15 Three major coal units were offline as we entered the week reducing coal capacity by 1.2 GWa. Sundance #4 was previously offline for maintenance, but Keephills #1 and Sundance #6 both went off at the beginning of the week which moved coal outages up ... » read more | |
| Wednesday May 16, 2018 | |
| The CPV Valley Energy Center is a newly built 670 MW natural gas fired generating station in Orange County, NY. The plant was scheduled to come online this summer and the construction of the facility itself seemed to be humming along without much delay. There was however considerable debate and delays regarding the 7.8 mile natural gas pipeline lateral that will run from the Millennium mainline to the plant. Figure 1| Valley Lateral Pipeline Map There were various environmental issues that needed to be resolved in order to complete the pipeline which appeared to delay the pipe construction long enough to potentially miss the expected 6/1/2018 startup date. However, multiple articles have been released that quote CPV, confirming the June start up, indicating ... » read more | |
| Tuesday May 15, 2018 | |
| Call it an annual case of bad timing but it seems like once in spring the country gets hit with an early bout of summer just as generation outages are peaking. This week the Northeast and Midwest are the unlucky ones with heat indexes pushing to the mid 90's. That is taking the on peak net load in PJM from 80 over 100 GWa this week. MISO is fairing similarly with the net load moving from 75 to 87 GWa. With many generators removed from the stack for outages, the regions are having to meet the jump in load with natural gas generation. Burns are already extraordinarily high versus last year's comparison due to the ongoing conversion of the coal fleet. Figure 1 | PJM Net Load for April 24 to June 1 - Dotted Line is Forecast The move up in load is usually reserved for a hot day in ... » read more | |
| Monday May 14, 2018 | |
| Each quarter the CAISO releases a report that summarizes the economic benefits of the energy imbalance market (EIM). On April 30th, the most recent release of the report was sent out, and can be found here. It concludes that this past Q1 there was $42 million in gross benefits, and that since the EIM's inception in November of 2014, there have been $330 million in benefits. While these numbers are wonderful, and certainly prove that the EIM is overall a good thing for its participants, one should question what is at the core of these benefits. To start off let's look at the last six days of EIM transmission flows, as seen in Figure 1. Figure 1 | CAISO > PNW (AC) Flows (top) and CAISO > DSW Flows (bottom) - Negative Flows are Moving Out of ... » read more | |
| Friday May 11, 2018 | |
| CPUC's Green Book on Customer Choice: Looking for Solutions in All the Wrong Places? On May 3, the California Public Utility Commission (CPUC) released its highly anticipated report entitled “Customer Choice: An Evaluation of Regulatory Framework Options for an Evolving Electricity Market.” Dubbed the "Green Book," the draft report contains an in depth discussion of the issues faced by California as it simultaneously grapples with (1) the transformation of its energy stock reflecting its RPS and decarbonization targets and (2) increasing customer load migration to non-utility suppliers via customer choice. The Green Book is the culmination of a year-long, multi-agency proceeding, dubbed the California Customer Choice Project. CPUC Green Book staff have ... » read more | |
| Thursday May 10, 2018 | |
| All eyes were on Alberta at the beginning of April as prices soared into the triple digits. The jump in prices was a result of several factors acting in synergy to push AESO to its limits. Not only were temperatures more than 20 degrees below average, but spring had officially begun with baseload generating units coming offline for maintenance. Both Shepard (890 MW) and Genesee #2 (400 MW) were down for maintenance causing the grid to be 1.3 GWa shorter. Wind also fell below average during the period which pushed the grid closer to the edge, and the reduction in imports from Saskatchewan was the final straw as Alberta’s neighbor didn’t have any excess energy to send over. The marginal megawatt shifted over to BC, putting said imports on the margin. Figure 1 | Calgary ... » read more | |
| Wednesday May 9, 2018 | |
| Over the years, the Pacific Northwest entities in the power sector have figured out how to best keep the wind in the region from being curtailed. Some of this is tied to moving power from the Pacific Northwest up into Canada while two other elements have direct ties to turning off thermal generation or reducing the output from the lone nuclear facility known as Columbia Generating station. The final piece of the puzzle goes into the hydro system and how system operators handle the spill at each facility. This becomes tricky as fish spill season is in play and the Total Dissolved Gas (TDG) levels are being monitored closely. Figure 1 | Total Dissolved Gas (TDG) Levels - Daily The table in Figure 1 illustrates the daily TDG levels at key dams along the Lower ... » read more | |
| Tuesday May 8, 2018 | |
| As we start to work out way through the work week, it is sometimes nice to see what is going on in the real-time market as wind generation can wreak havoc depending on if it is coming in above/below the expected forecast. In previous newsletters, we have discussed the increased wind capacity throughout the Lower 48, specifically SPP and ERCOT. In a newsletter article, we detailed how curtailments played out at the end of April and early part of May as well. Figure 1 | Year Wind Cumulative Max Generation - SPP and ERCOT The top pane is SPP's cumulative yearly max generation output on the grid while the bottom pane represents ERCOT. If you look at SPP, the last two years are identical as there was a big uptick in December 2017 as a new transmission line was in play that ... » read more | |
| Monday May 7, 2018 | |
| Temperatures out west are warming up this week. While you can't see it in Figure 1, last week was quite mild in the region, with normal temperatures spanning from the Pacific Northwest (PNW) down through California, and over to the Desert Southwest (DSW) and up to the Rockies. Moving forward the entire region for the better part of the next two weeks, barring a couple day cool down in the PNW, is going to be above to much above normal. The two interesting items to note with such a ridging pattern is with regards to wind generating and load. For the most part, when ridges like this set up, the wind output is generally quite low. For most parts of the WECC, wind output and warmth do not generally go together. Towards the middle of this week the PNW ... » read more | |
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