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Thursday Mar 25, 2021   
The renewable landscape tied to wind generation in SPP and ERCOT this month has been quite impressive from a potential capacity perspective as both have seen record numbers consistently throughout.  The definition of potential capacity mentioned is the summation of the actual generation from a renewable resource and the curtailed amount that occurs as the grid operators have to balance on a system and local level.  Over the years, we have migrated from the cumulative generation capacity to that of potential capacity as the should season can get a bit tricky and deceive market participants of what is to come during the months when there is enough power demand to find a home for all the renewable resources.  We discussed the curtailment situation in SPP, ERCOT and CAISO in ... » read more
Wednesday Mar 24, 2021   
It may not feel like it to Albertans with snow still covering large swaths of the province, but summer - from a gas market perspective - is just about here.  The AECO gas market is poised to flip to steady net injections over the next couple of weeks, and the current cash premium over near-term futures is likely to invert.  Near-term daily fundamentals point to a weakening of provincial gas demand and exports. Longer-range, this is the time of year the AECO market gets longer as provincial production does not start backing down for spring breakup until the end of April/early May, but demand and exports wane with seasonality. This can be seen in Figure 1, where the top row shows how production holds fairly constant until the end of April. The next three rows show demand in the ... » read more
Tuesday Mar 23, 2021   
It has been another mild winter for the state of California. Much like last year the departures were above normal for most of the withdrawal season which has led to both PG&E and SoCal Gas having an abundance of inventory heading into this injection season. The past three weeks the state saw late season cold but that is coming to an end this weekend. This cold fortunately led to a delay in the refill activity which typically starts during the middle of March. Currently total PG&E storage inventory stands at 142 BCF which leaves only 70 BCF of injection room over the next seven months. SoCal Gas is in an even more difficult situation. The caverns currently have 52 BCF leaving 30 BCF available for injections. Both inventory totals are near historical highs for this time of the ... » read more
Monday Mar 22, 2021   
Last week's special report titled 'The Curtailment Conversation -2021' dove into the details around the CAISO, SPP and ERCOT renewable curtailments and the key factors that have this March escalating the year on year cumulative volume in each market.  We followed the report up with a briefing on each market via the EnergyGPS webinar that highlighted the report's content (the video recording and pdf slides can be found on the EnergyGPS homepage).  In both the report and webinar, the foundation is set to where the market fundamentals present more than ever in each market now that we are coming out of the winter season and headed into the spring.  The California market has been picking up momentum over the past few weeks as the power demand numbers are moderating and ... » read more
Friday Mar 19, 2021   
It’s been thoroughly rehashed by now that a failure of wind energy to produce when expected was not among the causes of the disaster in ERCOT during the mid-February storm. As we and others have pointed out, wind wasn’t expected to produce much at that time, so it wasn’t devastating to the grid when it didn’t. Little attention has been paid, however, to the performance of wind before and after the storm. In order to explore this in more depth, and in order to contrast the wind performance during the event with the conditions in the rest of the month, we’ve divided the month of February into three distinct periods: before, during, and after the event. Each period is so different they almost behave like individual months. Defining “the event” is ... » read more
Thursday Mar 18, 2021   
The recent events across the middle third of the United States have brought the weather forecasting conversation to the forefront as several vendors have promoted themselves as have the tool that is able to predict what Mother Nature has in mind in the near-term and longer-term outlooks.  If you have been in the energy industry long enough, you quickly realize how volatile this process can be as there can be a whip-saw effect where one day the 1-15 day period is showing nothing but bearishness only to give way to a weather formation in northern portion of North America that gets the bulls riled up in a short period of time.  The one thing we are certain of, if this last year is any indication of what is to come, volatility and uncertainty is in order as we move out of the winter ... » read more
Wednesday Mar 17, 2021   
With global LNG demand market prices running at multi-year highs, U.S. LNG exporters are chomping at the bit to get as much gas out on the water as possible.  Recent days’ volumes are closing in on record highs and prospects look strong for those levels to be maintained through the summer.  Although spreads to ship into winter markets are even stronger than summer, U.S. exporters will have to wait to jam more volume into the market for new capacity to come online, which is not slated to happen until the end of this year.    Feedgas deliveries to U.S. LNG export terminals have returned to the 11 Bcfd level not seen since mid-December, when the single-day record high was set.  Following that event, January exports were fairly strong, though with sporadic ... » read more
Tuesday Mar 16, 2021   
In the past week we have heard a number of comments about the Texas demand destruction and how the state's economy has yet to make a full recovery in the aftermath of the energy crisis. The is being touted as reason why power burns have not performed anywhere near year ago levels. While it is true that the power burns in the EIA South Central have been a big disappointment this month it has nothing to do with ERCOT demand. If you look at the on peak demand versus temperatures for the past three years, this month is right on par with consumption in 2019 and 2020. So why is there a big drop off in the power burn component in the region? The burns are posting 1.6 BCF less than last year when COVID was impacting the economy.  Figure 1 | ERCOT On Peak Demand versus Houston ... » read more
Monday Mar 15, 2021   
The weather event this weekend had several micro systems brewing as the Midwest, Ohio Valley and Northeast all transitioned back into the winter mode after spending the past week basking in a spring-like setting.  Down in the South Central region, the wind gusts persisted as both ERCOT and SPP continue to deal with the volatile renewable resource across their respective footprints.  Over in California and the Pacific Northwest, we saw a combination of sunny skies and spurts of precipitation in the form of rainfall as temperatures were moderate as the clock changed to daylight savings.  The Rockies and Plains region was the area that received the most attention as the forecast was calling for a massive snow dump that would leave the mountains with over 4 feet of snow and ... » read more
Friday Mar 12, 2021   
As winter moves on to spring, weather turns milder, the sun comes out, and load declines, balancing the CAISO supply stack becomes a complicated problem. Because of the prevalence of solar, it’s useful to think about the daytime stack in three buckets:  Morning Ramp, Midday, and Evening Ramp.  It is the Midday period that catches the eye each and every day due to the massive influx of behind-the-meter and utility-scaled solar output there is on the grid.  The balancing act for the power demand profile is tricky as each hour is supplied with hydro, solar, wind, thermal, or nuclear generation, as well as imports from surrounding regions. The seasonal change affects this stack in more ways than one. Not only does load decline and solar increase, but snow stops piling up ... » read more
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