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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
Thursday Mar 11, 2021   
The one market that continues to take a backseat to both California and ERCOT is the Southwest Power Pool (SPP).  The name is a bit deceiving as one might attribute the footprint to the Desert Southwest, New Mexico and Nevada as these are the states that are tucked into the geography of the United States-Lower 48 as California stretches north to south and is identified by itself. Since the east and west electric grids are basically separated for reliability purposes, this leaves the former with say two-thirds of the country and since ERCOT's situation of being isolated from the rest of region has come to light over the past few weeks we have a similar situation as the latter where SPP is tucked away in the southwest corner of the outlined East region (left image) in Figure 1. Figure ... » read more
Wednesday Mar 10, 2021   
Just a few weeks after ERCOT set a 'theoretical' winter power demand record the thermal fleet was going to be pushing out generation that would have topped any record setting high water mark during a heat wave in July/August.  As we know, due to Mother Nature blasting the Lone Star State with extreme cold temperatures, such a scenario never came to light. As we settle into the month of March 2021, the grid could not be more 'polar' opposite as the power supply/demand picture is now showing the thermal fleet facing the potential for new low-side generation records.  Today through Sunday hosts the likelihood for hourly thermal generation levels drop to unprecedented lows as wind and solar surge to record highs. The upcoming event is not simply a function of weather ... » read more
Tuesday Mar 9, 2021   
Each quarter of the year we get to review a summary of the financial performance of the publicly traded natural gas production firms when they report quarterly earnings. The first quarter of the year is particularly important because they go over the volumetric forecast for the rest of the year. This can then be aggregated across the industry to create a production expectation. It is particularly useful in the Marcellus and Utica production zones where the incentives are aligned. The earnings presentations and subsequent transcripts also provide other useful information. It is a check on infrastructure, maintenance and hedging performance for the balancing equations.  The big three in the Northeast production are Cabot Oil and Gas, Range Resources and EQT. Together they make up over ... » read more
Monday Mar 8, 2021   
The Pacific Northwest is quite unique when it comes to the energy sector, specifically the electricity sector as the hydro system comes into play each and every month.  Prior to the solar penetration in California, Mother Nature was already placing the original renewable resource at the forefront of everyone's mind. The science was all about figuring out when the snow was going to melt off the mountainsides and push enough water through the turbines that the transmission lines were full down to California and you needed to price coal and natural gas units offline to make sure the system balances.  This meant that the bilateral price for both the heavy and light load Midc would gap down from the $20-$30 level to low single digits.  This was the volatility that set the region ... » read more
Friday Mar 5, 2021   
While ERCOT has been busy grabbing all the headlines over the past several weeks, Texas was not the only region impacted by what is now being referred to by many as Winter Storm Uri.  On Tuesday, February 16, almost three quarters of the continental U.S. was under cover of snow.  With that in mind, let’s take a quick look at how different ISOs across the country were impacted by the events of February 13-17.  Figure 1 | U.S Snow Cover from Winter Storm Uri, Tuesday February 16 Source: NewsNation It’s been recounted ad nauseam how the combination of spiking energy demand due to the cold, along with weather-induced supply disruptions from wind to natural gas brought ERCOT to the brink of collapse.  But how did other regions fare?  Figure 2 shows ... » read more
Thursday Mar 4, 2021   
A couple of weeks make a big difference when it comes to balancing the grid across the Plains and the Lone Star State.  It has been well documented in the press and at the hearings in front of the State Senate committee on how close the ERCOT's electrical grid was to going dark as the frequency was at dangerous levels for over four minutes.  At nine minutes, the generators that were still operating would have been basically forced to turn off to make sure they were not permanently damaged to which it would take weeks if not months to replace key parts and get them back onto the grid.  What we have not heard much about is the balancing act the SPP operators had to incur as they watched their thermal fleet suffer along with their respective wind turbine blades ... » read more
Wednesday Mar 3, 2021   
authored by Rick Margolin Despite years of resistance I have recently caved in to the advice of my wife and friends whose advice I trust.  I started wearing slimmer fitting jeans.  It is not my native habitat.  I resisted out of concern that such garments would really limit my movement and freedom.  But I was wrong (thanks in large part to the interlacing of spandex into the denim fibres).  I have been able to reclaim a few style points and am no longer worried that the tightness will dangerously impede my movement. These are the thoughts that came to mind this week when checking in on the LNG market.  Spreads to ship U.S. LNG to European and Asian markets this summer have been tightening like a pair of skinny jeans in recent weeks, but are far from risking ... » read more
Tuesday Mar 2, 2021   
Now that the Lower 48 is on the downside of the seasonal heating degree day curve it is time to do maintenance on the energy infrastructure. Pipelines, storage facilities, transmission and generation will all start outages in order to keep the equipment in order for the summer cooling season. In the past week nuclear outages across the Lower 48 have climbed from 5 to 10 GWa in what is expected to be a robust and prolonged refuel period. Last year due to COVID lockdowns, many elective maintenance issues were stalled in an effort to preserve public health. In the coming weeks look for total NRC outages to climb to 20 GWa.   Figure 1 | NRC Outages for 2016 - 2021 The Southeast and West are typically the regions that ramp up outages first during a maintenance season as mild ... » read more
Monday Mar 1, 2021   
It has been over a week since Mother Nature put an end to the extreme cold weather pattern that swept deep into Lone Star State.  The fallout is quite extreme as many load serving entities are now seeing the their meter readings, key members of each company is sitting in front of the hearing committee members and telling their stories to which the narrative is consistent across the board on the electical front and ERCOT Board Members are resigning from their post.  These three do not stop ERCOT from doing their daily duties of balancing the grid from a day-ahead scheduling and real-time settlement standpoint.  Figure 1 | ERCOT Real-Time Breakout - Hourly The chart above details the ERCOT real-time key components and what the grid has been dealing with over the past ... » read more
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