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| Thursday Aug 18, 2022 | |
| With the weather in the region hot again with temperatures nearing 100 degrees in Portland, the Pacific Northwest grid is growing significantly tighter. The Mid-C bilateral price moved up to trade more than $30 higher than SP15 for this past Wednesday—a big change from the price on Monday where Mid-C came in more than $40 below SP15—as the need was there to send a price signal to keep the MW generated in the Northwest at home instead of sending them over the transmission lines down to California. Thankfully, a change took place this week on the hydro system that has provided a boost to the supply stack in the PNW. This past Monday, August 15th marked the transition from the initial set of summer fish spill regulations to a less strict set of requirements that ... » read more | |
| Wednesday Aug 17, 2022 | |
| The SPP market continues to deliver price volatility across the two zones (North and South) as well as provide a thoroughfare for megawatts to move in/out of adjacent regions. We continue to expand the coverage of the region that moves up and down the middle third of the Lower 48; to which we have created the SPP Power Package. Such a package dives into the grid’s market fundamental supply/demand components and displays them in charting tools, dashboards and written commentary that can be found on the EnergyGPS website portal. In today’s blog, we detailed a few of the key pieces that are on display daily. Starting with the net load, the graph below illustrates a year-on-year comparison for all SPP to which we can carve into sub-regions to really see how the price ... » read more | |
| Tuesday Aug 16, 2022 | |
| One year ago the ElPaso Pipeline suffered a rupture near Coolidge, Arizona that killed two people. Immediately ElPaso shut down the L2000 segment of 30 inch pipe cutting .54 BCF per day of flows from West Texas to the California Border as repairs and inspections mandated by the Department of Transportation - Pipelines and Hazardous Materials Administration(PHMSA). ElPaso Pipeline is an older pipeline with some lengths having an age close to 50 years old. As a result extensive repairs and inspections are needed to ensure the pipe is safe to use. This past week Kinder Morgan, the owner of Elpaso Pipeline, posted a note stating the repaired segment will continue to be out of service at the behest of the PHMSA at least through the end of the year. Figure 1 | AZ Exports to ... » read more | |
| Monday Aug 15, 2022 | |
| During times of heat and the days when most homes did not have air conditioning units, the early morning hours were based on opening all the windows in the house and letting the overnight coolness penetrate the inner walls. After a couple of hours, the windows were shut, the drapes were pulled down and the curtains closed as this was the method used to keep the house cool the rest of the day. Figure 1 | Closing the Curtains – No light Shed Once moderate temperatures returned, the curtains were drawn to shed more sunlight on what was happening outside and bring in some of the rays that were once overpowering. Last week, the most recent EnergyGPS Newsletter article, titled ‘CAISO Pulls Back the Curtain on Batteries’, analyzed the new battery data being ... » read more | |
| Friday Aug 12, 2022 | |
| When we think about prices in ERCOT, we typically like to break them down into “buckets” based on the implied heat rate. Implied heat rate can be calculated in any interval by dividing power price by gas price, and gives a hint about what might be driving price formation. The lower the heat rate, the fewer thermal generators will find it economic to run. At higher heat rates, more revenue is available and less efficient plants will be able to come online. We think of intervals with implied heat rates below about 5 as oversupplied: gas isn’t what’s setting price, and there’s probably a lot more generation available than what’s needed. In contrast, heat rates above about 15 indicate scarcity. Again, the operating costs of gas plants aren’t ... » read more | |
| Thursday Aug 11, 2022 | |
| The middle of August 2022 is another example of how the Pacific Northwest and California are connected as both regions are looking at heat moving into their respective territories. Such an event is setting up a battle of the megawatts that typically flow between the two regions on both the AC and DC transmission lines on any hour for a given day. Figure 1 | CAISO 7-Day Peak Demand – Actual and Forecast Starting with California, the heat is going to be extended along the coastal region of the state to which has not been seen for over two years. When this occurs, the demand areas around San Franscisco and Los Angeles tend to consumer a substantial amount of energy for AC cooling and the grid has exposure to sub-regional bottlenecks around getting megawatts from source to ... » read more | |
| Wednesday Aug 10, 2022 | |
| The beginning of August has shaken up the SoCal gas world with SoCal CityGate pricing more than a dollar over PG&E CityGate. It’s the first time this summer we’ve seen a premium for SoCal like this, contrary to previous summers when SoCal has priced over frequently to move power burns up north. Last week, we published a monthly report, titled ‘July 2022 Fireworks’, that detailed the fundamentals in July that led to SoCal’s low pricing last month. Let’s review the fundamentals from July to understand our starting point for this month. The weather in California remained mostly mild in July, even as the surrounding regions experienced summer highs. For those betting on SoCal needing gas to meet demand for some hot summer days, this July was a ... » read more | |
| Tuesday Aug 9, 2022 | |
| This has been one of the most eventful years for trading commodities especially natural gas. The issues in Europe combined with the underlying supply/demand tightness have kept a fire burning under the price support. But one of the biggest events of the summer was the loss of the Freeport LNG terminal to a rupture in mid June. The shut down of the facility backed 2 BCF of liquefaction gas back into the daily balancing. Each turn of the saga between the Freeport operators and the Department of Transportation-Pipelines and Hazardous Materials Safety Administration(PHMSA) has been the basis for more price volatility. While Freeport has maintained a quick turn around from the repairs with operations expected by the end of October the PHMSA has pointed out several issues and a need for a root ... » read more | |
| Monday Aug 8, 2022 | |
| As the Pacific Northwest is dealing with a mini-heatwave, California is taking on the challenges congestion showing up between the North and South zones. Such an event basically islands off the LA Basin region as the lifeline transmission lines tied to the DC intertie, Palo Verde and Mead are either delivering less volume or netting export volumes to help serve their respective power demand profile. This is especially true across the heavy load block of hours (HE7-HE22), with the focal point being during the evening ramp block (HE17-HE20). Figure 1 | CAISO Day-Ahead Marginal Congestion Component (MCC) The graph above illustrates what we are talking about when it comes to the congestion between SP15 and NP15 over the past nine days. The x-axis represents the hours within ... » read more | |
| Friday Aug 5, 2022 | |
| Over the last few months we’ve observed a significant uptick in inbound requests for information about deal structuring and nodal pricing in the Energy Imbalance Markets (EIM) outside of the CAISO balancing authority footprint. While we routinely have clients seeking to understand how transmission costs, scheduling, and logistics works outside of the CAISO, we are seeing increasing interest in understanding how to manage busbar price exposure if selling at an EIM node. The increased interest at EIM nodes is driven by QF deals where energy settles in the EIM, corporate deals where corporate off-takers wish to settle at an EIM hub and the project bears the EIM node to EIM hub risk, as well as merchant exposure post-PPA time period or projects with nameplate capacity in excess of the ... » read more | |