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Friday Oct 4, 2019   
It has been almost a year to the day that the 36 inch Enbridge pipeline ruptured and sent a ball of fire into the air.  Since that time, there has been a lot of volatility at the Sumas gas hub where last March it all came to a head as the daily index shot up over $160 per mmbtu.  This past week, the regional supply/demand fundamentals on both the power and natural gas sides of the equation were such that the Sumas cash price needed to move up to make sure the molecules stayed on the pipe for the abnormally large rescom volumes and not go to some of the power plants on Northwest Pipe.   If you would like to know more about the content within the EnergyGPS Special Report titled 'The Sumas Story' click on the link provided.  Within the content page you can purchase ... » read more
Friday Oct 4, 2019   
It was a busy week for resource planners in the Pacific Northwest this week.  On Wednesday, the Northwest Power Pool (NWPP) held a day long symposium on resource adequacy in Portland Oregon.  Hundreds of people attended, including professionals from all sectors of the Pacific Norwest energy industry, elected officials, environmental representatives, and the media.  The Power Pool’s purpose for holding the symposium was to convey to a broad set of stakeholders the looming resource shortage that the Pacific Northwest (PNW) region faces and the need to create and implement a regional resource adequacy program.  Enthusiasm at the symposium was high but, given the multitude of balancing authorities in the PNW and the lack of any regulatory authority or law that ... » read more
Thursday Oct 3, 2019   
Despite the official start of autumn having already made its way onto the board, temperatures climbed throughout the weekend and into the start of this week with areas breaking into record highs. Summer struggled to give way to a new season with what appears to be the last bit of resistance before fall truly sets in. The heat spell drove less efficient generation onto the grid which resulted in rising heat rates across the region. Taking a look at PJM, we can see the market’s reaction to the recent heat wave. Figure 1 show thermal generation during real time (area) compared to heat rates for major hubs (lines). As the week started, over 15 GWa of thermal generation was brought online during on peak hours. While eastern heat rates held relatively low during as the warm air made its ... » read more
Wednesday Oct 2, 2019   
If you are a football fan and happen to be a Dallas fan, the words 'how bout them Cowboys' ring true back in the 90's when Jerry Jones and Jimmie Johnson were winning championships. In fact, the slogan itself has taken on a life of its own as it is now apart of the NFL's advertisement campaign as the Dallas Cowboys are a brand that the compassionate fans, Jerry Jones the owner and the NFL executives cannot live without as the team is striving to bring home another Vince Lombardi trophy and the NFL is in a race to keep market share with all its television network agreements and sponsors. Figure 1 | How Bout Them Cowboys Sticking with the state of Texas and the them of 'how bout them Cowboys', we have ERCOT and its daily day-ahead and real-time participants subconsciously murmering ... » read more
Tuesday Oct 1, 2019   
Canadian storage has been a feast or famine story for much of the past year. Alberta, which contains most of the country's storage capacity is under duress with only 256 BCF of in ground supply available for the winter heating season. That is 59% of the storage capacity of the province. On the other side of the country, the Dawn storage cavern has just reached full capacity of 156 BCF with another 30 days left in the injection season. That is the quickest they have been able to refill the cavern in recent times. The problem is how do they balance the delivery area with no available capacity to inject excess volumes. Figure 1 | Dawn Storage Inventory for 2015-2019 The hub will have to price at a discount to surrounding areas to back off pipeline transport flows. The first to go will be ... » read more
Monday Sep 30, 2019   
Over the past few years, the electricity grid has seen its supply stack change in a way that is making the daily activities in the physical market different than what is once was.  For example, when I started my career in the energy industry (late 90's), the supply stack was made up of a baseload nuclear fleet, coal units and a natural gas fleet that was used for load following.  In the West, we had the volatility around the hydro water year that made the region unique compared to others across the country.  The reserve markets were the traditional ones such as reg up, reg down and spin/non-spin and they were tied to load profile as well within the construct of a Balancing Authority (BA) or an Independent System Operator (ISO). Figure 1 | Old Traditional Power Grid In the ... » read more
Friday Sep 27, 2019   
The smmer months in Texas have been quite exciting and volatile with the month of August giving us cap prices for a number of hours.  This was in part due to the ever growing wind capacity not seeing the light of day as the actual output dipped down to below 2 GW within the hourly 5 minute increments.  This is substantial given the cumulative generated capacity on the grid is currently 19.5 GW. Figure 1 | ERCOT Wind Breakdown - Monthly The bigger issue in my wind is tied to the overall ERCOT load growth we are seeing on a daily basis as each region has its own story.  For example, the Gulf of Mexico coastal region is tied to the growth of LNG facilities and the power demand that goes with each tran/project.  It has been estimated that each facility takes on ... » read more
Thursday Sep 26, 2019   
Three Mile Island is the latest nuclear generator to be retired. The facility originally commenced operations in 1974, but has seen its share of turbulence. Just five years after commissioning, there was an incident at Unit 2 which leaked nuclear radiation into the surrounding area. While by no means a Chernobyl event, this was enough to decommission Unit 2 for good. 40 years later, new pressure from cheap natural gas generation has lowered power prices enough to push nuclear generation out of the money. Figure 1 | Three Mile Island Nuclear Several additional facilities have also made their way offline recently. These have generally come from facilities with only one unit which aren’t able to reduce capital overhead by combining multiple units in one facility. The fallen generators ... » read more
Wednesday Sep 25, 2019   
In the coming days we will see a big shift in the North American climate. A ridge is developing right through the continent that will set up a cool west/warm east dynamic. For most of the country this will continue the above normal cooling load. But for Western Canada, this will be their first taste of winter. Average temperatures in Calgary will drop from 50 to 31 degrees which will take the Nova Intra load up from 4.8 to 5.5 BCF per day. This is going to occur when the distribution system is still undergoing summer maintenance. For most of the past seven months they have been plagued with a number of forced and planned outages that have restricted access providing a very tight balancing dynamic. As a result the Alberta gas storage inventory is posting 81 BCF behind last years refill ... » read more
Tuesday Sep 24, 2019   
if you have ever been to the doctor with someone who is afraid of getting poked in the arm with a needle for either an IV or to draw blood, you know what I mean when I say needles hurt and can make people act in a way that is different than their normal self.  The energy market in ERCOT and Califronia work the same way when it comes to market dynamics playing out where the middle of the afternoon/evening ramp show a large spike in the outright power prices therefore expanding the implied heat rates.  Such periods start to create a shape similar to a needle poking out of the hourly pricing profile that warrants the attention of many.  Most of this type of price action is driven by the load forecast demand coming in higher than expectations thus making the grid shorter while ... » read more
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