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Tuesday Aug 24, 2021   
Dominion Transmission, which is now called Berkshire Hathaway Energy, is the regional utility for Western Pennsylvania. It is also the native utility for the major producing area of the Marcellus shale basin. Since the start of the production boon more than a decade ago, the receipts on the system have overwhelmed the demand and export capabilities often leading to full storage conditions at the end of the refill season in September and October. This was an annual problem because it also timed with fall maintenance work. These two conditions bound up the ability to handle the surging production volumes sometimes leading to producer shut-ins. It has happened so often that the basis futures have built in a large discount on the curve as if this was as regular as the sun rising in the ... » read more
Monday Aug 23, 2021   
California continues to be in the spotlight as the 2021 summer months were touted as one for the ages given the grid saw rolling blackouts a year prior and the request for more capacity needed came at the end of June as summer was fast approaching.  Since that time, the California system operator (CAISO) has been able to keep the overall auction clears substantially low compared to that of their neighbors to the north and east.  It should be noted, with moderate temperatures in all three regions as of late, neither the Midc nor Palo Verde has been able to get off the ground either as the former has plenty of hydro and wind hitting the grid while the latter is hedged near the peak of a load profile that was anticipating the daytime highs in Phoenix and surrounding areas topping ... » read more
Friday Aug 20, 2021   
Last week we wrote about the high but stagnant CAISO prices and their implications for battery operations. This was coming off the tail end of a few pretty eventful weeks in the region—high temperatures meant high loads, thermal units running around the clock, and gas prices which for most of the summer have been trending above last year by a wide margin. The graph below shows SoCal Citygate gas pricing from June through August for 2020 (yellow line) and 2021 (blue line). Figure 1: SoCal Citygate gas prices for June-August 2020 and 2021.  Heading into this week, there were a lot of factors working against balancing the CAISO grid. It started with a constraint on the transmission line between southern California and Palo Verde, where the CAISO tends to import power on a daily ... » read more
Thursday Aug 19, 2021   
Texas has seen more precipitation this past week as we reached the middle of the third quarter. Such weather has been a common trend most of the summer along the Gulf Coast region of the state while the other areas of the Lone Star state have dealt with consecutive high wind days met with a couple of days where the hourly profiles pulled back.  Solar continues to be the biggest delta change year on year as the middle of the day has roughly 6 GW hitting the system compared to roughly half of that last year. Figure 1 | ERCOT Monthly Wind/Solar Profiles - Hourly The figure above is one that is present in the ERCOT Real-Time Dashboard that details what is going on within the ERCOT footprint on a daily basis in the real-time setting.  The top two panes represent the monthly hourly ... » read more
Wednesday Aug 18, 2021   
LNG forward spreads continue widening, recently drawing strength from Europe’s lethargic storage refill rate taking another punch to the chin.  Last week we published a Flash to our LNG subscribers describing how Russia’s Gazprom has had to withdraw volumes from its Ukrainian storage inventories in order to meet its delivery obligations to the EU.  A fire at a Gazprom processing facility in Russia in late July cut Gazprom’s ability to deliver gas to the EU via its Yamal pipeline, forcing Gazprom to turn to storage gas in the middle of summer.  Figure 1 shows Ukrainian gas storage inventories, which we track and chart on a daily basis along with northern European, southern European, and U.K. regional inventories as well in our EU storage package.  ... » read more
Tuesday Aug 17, 2021   
It has been over a year of pandemic demand recovery. Some areas of the country have recovered their demand as anticipated and others like the Alberta province continue to surprise. The province is hitting on all cylinders as all factors of the economy are booming. But the record electric and natural gas demand is more than just a jump in economic activity. Record temperatures and oil sands processing have all been big factors which has led to a increase in natural gas demand by .7 BCF per day which is a 14% gain over last year (more than half the gain has come from the latter which has been incentivized by the recovery in global crude prices. Figure 1 | Alberta Natural Gas Demand versus Temperatures for 2019(red), 2020(orange) and 2021(blue) in BCF/d On the back of economic ... » read more
Monday Aug 16, 2021   
The western power markets have been at the forefront of the conversation most of the summer as the price signals leading up the period of question took on scarcity as Palo Verde's forward curve priced in actions from last summer and took into account recent coal retirements and Desert Southwest heat.  The Pacific Northwest rallied prior to the summer really kicking in as  Mother Nature delivered an unique Water Year in the Pacific Northwest along with a heat dome for the ages.  California on the other hand, tried to go with the two market mentioned but as CAISO system operators came out with tariff changes and comments of cutting exports, the market participants knew the market was not going to be drive off of economics per se but off of pre-emptive actions of procuring ... » read more
Friday Aug 13, 2021   
This summer, Energy GPS is excited to have partnered with LevelTen Energy and Intersect Power for the first year of what we hope and plan to be an annual internship program. Seven students from all over the country have spent two weeks (remotely) with each of the three companies, in addition to a few weeks of training. Each of the firms has different focuses and strengths, so this was intended to let students get as wide a variety of experience in the energy industry as possible. At Energy GPS, our collective strengths are our analytics, our comprehensive historical data for every ISO in the US, and our wholesale market experience. We decided that the best way to leverage these for the interns would be in the form of a trading game. The interns’ results at trading to meet load for a ... » read more
Thursday Aug 12, 2021   
The Pacific Northwest is starting another heat wave as temperatures in Portland reached 101 degrees late Wednesday afternoon and Thursday is expected to top 106 degrees.  Seattle is not as hot but anything above 95 degrees is sweltering to a region that stated back in June that 33% of the households had air conditioning.  That percentage might have moved up ever so slightly since the record breaking heat event earlier in the year so they can cool off this go around. Inland, we have Spokane and Boise back above the century mark, which is breaking newly found records as their summer is the hottest on record in the recent era.  The bottom line is that Mother Nature is not letting up on the gas pedal when it comes to the Pacific Northwest as the temperatures are expected to ... » read more
Wednesday Aug 11, 2021   
In Exelon’s most recent earnings call they confirmed they are pushing ahead with retiring two major nuclear facilities starting next month.  The news is noteworthy for the nature of the retirements: the loss of highly utilized baseload power. Between now and the end of the year, the volume of new nameplate capacity to be introduced to the U.S. power market will be more than three times greater the amount of nameplate capacity to be retired in that time. However, the different nature of the retiring capacity versus new capacity makes the net delta tighter than it would appear by simply looking at nameplate alone. In essence: the market will be retiring capacity that tends to run more consistently and at higher utilization rates, while the new additions will be heavily weighted ... » read more
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