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Monday Jun 14, 2021   
Over the past few months, the focal point in the renewable energy space has been tied to the battery technology making its way to the grid, starting in California where the integration is key due to the solar penetration over the years.  We have discussed how the new capacity is saturating the ancillary service markets and at times trickling into the real-time energy markets (Batteries in CAISO RT Market, where has all the cream gone?) as the midday to evening ramp price delta is present within the market conditions.  Some of the contributing factors tied to the price level continue to be the behind the meter and utility-scaled solar generation profile but there is another supply component adding upward pressure and that is the biggest battery on the grid which is better ... » read more
Friday Jun 11, 2021   
This morning before she left for work, my wife poked her head into my home office and said something to me that would have been unthinkable last week: “It’s cold!”.  After her declaration, I looked down and realized that I was sitting at my desk wearing a sweatshirt instead of the shorts and t-shirt that was my uniform just a few days prior.  This week brought the PNW a brief respite from the summer weather that jumped into high gear at the beginning of June.  The cool weather is coming to an end, however, as the entire West is facing another heat wave as we move into next week, with scorching hot temperatures across California, the Desert Southwest, and much of the Rockies.  The Pacific Northwest is taking a step back from joining in on the party ... » read more
Thursday Jun 10, 2021   
Over the past couple of years, the newest renewable technology to enter the conversation has been battery storage as the penetration of wind and/or solar across CAISO, ERCOT and SPP has been plentiful thus causing intraday volatility when it comes to balancing the system.  With several gigawatts of thermal generation tied up in the ancillary service sector of the grid and coal retiring in the South Central, each grid has been looking for the technology to save the day.  In the West, California still has the old-fashioned resource of hydro generation that is baked into the equation via the transmission lines from the Pacific Northwest as well as that of in-state facilities.  Since the California hydro system is much smaller and the transmission capacity is limited and the ... » read more
Wednesday Jun 9, 2021   
The results of last weekend's Mexican congressional elections were watched closely by the energy sector.  While only time will tell, the outcome was moderately bullish for energy trade between the U.S. and Mexico. Mexico’s president’s effort to rollback the nation’s recent energy reforms was dealt a blow this weekend when congressional elections revoked his party’s super-majority.  As a result, future efforts by the president to re-nationalize energy assets and market control will now be substantially more difficult, if not impossible.  In the immediate term, this would be regarded bullish U.S. natural gas exports to Mexico on the assumption that no new roadblocks to the country’s transition to a natural gas-fired power sector will not be ... » read more
Tuesday Jun 8, 2021   
Over the past ten years big strides have been made to move the production volume out of the Marcellus and Utica out of the region to consumption areas in the Gulf, Midwest and East Coast. New pipelines like Nexus and Rover have been completed. Compression on Tennessee gas Pipeline, Columbia, TETCO and Transco have been reversed allowing volume to move down to the Gulf Coast region. These regions receiving the gas have now become dependent on the Northeast for this supply. The pipelines each carry an enormous amount of gas, most over 2 BCF per day, which puts a large amount of risk in the hands of just a few assets. When disruptions happen it causes ripples as the receipt and delivery points both have to adjust to the large changes. Sometimes the changes in pipeline flows are forced ... » read more
Monday Jun 7, 2021   
The start of June in the Lone Star State has produced plenty of cloud cover across the Houston region as a front moved in and would not leave.  It was not an ordinary storm as the local weather experts did not see that much movement in the Gulf of Mexico, which typically would move the clouds out and bring the sunny skies usually seen as we roll out of May and into June.  As a result, the region about Houston and the southern part of the state saw Pacific Northwest type weather where plenty of precipitation was in play and the cloudiness brought greyness to the days that saw well below normal temperatures. Figure 1 | Houston's Start to June 2021 - Rainy and Overcast The indicator that this stint of weather has been quite unique is the fact that the state's wind generation has ... » read more
Friday Jun 4, 2021   
By Tim Belden I came across an interview with John Arnold earlier this week that is well worth a listen. The interview appears on the “Digital Wildcatters” platform which discusses energy, technology, and finance. The interviewers had good questions and a friendly, easy-going style. This enabled some great story telling by John Arnold. https://www.digitalwildcatters.com/john-arnold-on-oil-and-gas-startups/ John Arnold needs no introduction for anyone in the energy trading business. Coming out of college in the mid 1990’s he really wanted to land a job in investment banking. When he couldn’t land that job, he accepted a job at Enron. Within 12 months he became an assistant trader. Within 24 months of graduating from college he was trading a Texas basis book (nat ... » read more
Thursday Jun 3, 2021   
If there was just a bit more humidity in the air and some fire ants crawling up my legs while sitting in the lawn chair watching a youth soccer match, one would think they were sitting in Texas as the temperatures were hot enough in the Pacific Northwest as June rolled around.  If you were sitting in Texas, the feel is more like a typical Portland, Oregon day where the skies are overcast and the rains persist to a point that you are scouring the deals from airlines to fly further south to Mexico or east as the Florida coast looks more attractive. Figure 1 |Houston Short-Term Weather Forecast From the looks of the Houston forecast above, the pattern is not going to be changing anytime soon as thunderstorms and heavy rains are likely from today through next week Tuesday with the days ... » read more
Wednesday Jun 2, 2021   
In a recent Newsletter we discussed how structural changes in the ERCOT power market are leading to a series of surprising real-time performance figures.  ERCOT is not the only market experiencing structural shifts with visible results.  They occur in a variety of markets across North America, often for unique reasons, and sometimes rather unexpected.  Alberta is a good example. This week, Alberta power loads could set new June records because of the coincidence of structural demand shifts being amplified by some of the hottest weather for this time of year in several years.  Typically, when I hear “heat” in Alberta, I think of nothing more than a few days were you can pair flip flops with shorts and a tee.  It certainly doesn’t conjure up images ... » read more
Tuesday Jun 1, 2021   
This was a very unusual Memorial Day Weekend. Much of the Midcon and Midwest saw average temperatures range 4-12 degrees below normal which brought very cool weather to the holiday weekend. Normally these regions are making the turn to summer weather with daytime highs in the mid 80's. This turn of events combined with the stormy Gulf weather took the country's power burn total down from 32 to only 23 BCF. But this may be the calm before the storm. In the coming days the CDD total for the country will jump from 2 to 10. The Midwest will have heat indexes in the low 90's as the humidity takes its effect.  Figure 1 | Lower 48 Cooling Degree Day Forecast and Last Year The nuclear fleet is much healthier as the month of May is when the refueling season typically comes to an end the back ... » read more
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