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| Thursday Dec 15, 2022 | |
| Growing up as a kid right here in Portland, Oregon, every December was the same story of waking up each morning with fingers crossed in hopes of the rare event of a snow day, to spend the morning making snow angels and chucking snowballs instead of normal school drudgery. With the forecast turning even chillier on the other side of this weekend, the Northwest is looking at this possibility next week. As we reach the midway point of the month of December the conversation continues around energy and natural gas markets in the West, and the Pacific Northwest in particular. The extended period of cold temperatures that have settled over the western US continues to put system operators and traders alike in the position of weighing the immediate needs of today versus the ... » read more | |
| Wednesday Dec 14, 2022 | |
| It was a race to the cap in Alberta during the peak hours on December 12th, 2022 as the real-time settles blew past $500/MWh in the early morning hours, stayed over $700/MWh for several hours in the morning, and peaked just under the cap at $987.89/MWh in hour ending 18. The grid is no stranger to these conditions, as below-normal temperatures have smothered the region since early November and wind generation continues to display volatility that tightens the supply stack. An example of such tightness was on display at the end of November 2022 when the system operations sent out emergency alerts that were heightened to the most extreme level before matters were going to be taken into their own hands for grid reliability (EEA Levels 1-3). Over the course of the last ... » read more | |
| Tuesday Dec 13, 2022 | |
| The western half of the Lower 48 has garnered plenty of news of late as fears of gas shortages have developed ahead of a coming polar event. Prices for physical gas have soared from $7 to $90 as of Friday's close. But now the same polar event that is expected to dominate the West is now progressing across the continent. Recent weather model runs have moved the pattern over the Midwest and into the Mid Atlantic prompting fears of zonal binding in the metro delivery areas along the East Coast. The pipeline in the crosshairs is the Transco Pipeline which runs from the Gulf up to the New York metro area. Transco is prone to binding as demand outstrips supply during extreme events. This past summer saw Zone 4 and Zone 5 binding causing price spikes throughout the ... » read more | |
| Monday Dec 12, 2022 | |
| The West natural gas market has been on an upward trajectory since the start of the month as the balance of the month settled near $90 as of Friday, December 9th, 2023. This is after the cash market moved out from the $15 level to $45 for the three-day weekend package. As a result, the power sector is now seeing the bilateral market clear north of $425 and the CAISO auction deliver a $440 print in NP15 for today (Monday). Figure 1 | SoCal Gas Sendouts and Storage The storyline for the natural gas movement all starts with the uptick in the overall demand in certain areas of the West and what it means to their respective storage levels. For example, the figure above displays the SoCal Gas Sendout levels in the left graph while the right graph represents the total natural gas storage ... » read more | |
| Friday Dec 9, 2022 | |
| Come December, the power demand profiles across the country start to take on the double hump shape on the colder days, which means the morning and evening ramp block of hours rise more than the early morning and midday periods. This is due to everyone waking up and consuming energy between HE7 and HE9 while the evening period includes the good ole holiday lighting surge seen during this time of year. On warmer days, the hourly shape is more like a typical fall day a gradual incline throughout the heavy load hours. The former exposes the energy market differently than the latter as different types of units are needed to balance the system when short periods of time have higher/lower demand. Throw in the fact that every grid has some sort of renewable generation megawatt ... » read more | |
| Thursday Dec 8, 2022 | |
| This past weekend brought the city of Portland its first snow of the season, with the flakes picking up a little after nine in the morning and lasting through the late afternoon. School-age children stomped their feet and cursed the skies for not waiting one more day before the snow arrived so that they could enjoy school cancellations but for the rest of us it was simply an emblem of how things are evolving all over the west this fall. The pattern has been in place since the start of November as the area stretching all the way from Alberta and British Columbia up in Canada down to Southern California and the Desert Southwest have been facing very cold weather that only intensified during the last week. The region is currently in the midst of a slight reprieve, with ... » read more | |
| Wednesday Dec 7, 2022 | |
| In November 2022 blue was the dominant color in the forecast for the west coast. Both the Pacific Northwest and California saw a significant increase in heating degree days over the 5-year average for the month. This was an extra chill on top of already falling normal temperatures as we move closer to winter. As we enter December, there is even more blue on the horizon for both regions. In one of our latest CAISO market flashes, ‘The Natural Gas Landscape – Cali Conundrum’, we discussed how the increased demand for the Pacific Northwest means fewer megawatts on the ties coming into CAISO. With imports lacking and nuclear outages tied up in refueling, CAISO felt thankful for their thermal stack this November as much of the difference was made up by burning more natural ... » read more | |
| Tuesday Dec 6, 2022 | |
| This winter was supposed to be different. Just six months ago the natural gas market was struggling with a bevy of bullish factors that were expected to cause record high prices to last through this winter. The winter NYMEX HH futures strip was priced at $9. Storage was expected to enter the withdrawal season at only 3.1 TCF, almost 1 TCF below capacity. Power burns from electric generation were at the highest levels in history despite the soaring prices. And the comparative price signal from Europe to North America suggested these record high prices were still the best value on earth. But then all these sentiments started to turn with the loss of the Freeport LNG export facility. The back up of 2 BCF of intended feed gas into the Gulf had an immediate effect on storage ... » read more | |
| Monday Dec 5, 2022 | |
| The renewable sector continues to take front and center in the California, Texas and Central Midwest power markets as CAISO has its battery fleet while ERCOT and SPP are deep into wind capacity growth over the years. We cannot forget about the solar influx seen with both behind-the-meter and industrial growth in CAISO while ERCOT is now taking on its own harvesting of the sun’s rays. At the end of the day, the renewable sector is keeping everyone on their toes as it creates volatility around the balancing act; to which the marginal megawatt comes into play as the market fundamentals are discussed amongst market participants. Figure 1 | ERCOT Net Load Actuals and Forecast – Hourly As part of the EnergyGPS eCommerce packages, we offer individuals interested in ... » read more | |
| Friday Dec 2, 2022 | |
| The US natural gas pricing environment has softened a bit over the past couple of months, but it was not too long ago that double digit prompt month ticks were part of the daily conversation. In other parts of the world, they wish their natural gas price was in price range but with the push for renewables, coal retirements and now the Russia/Ukraine war, the fact of the matter is Europe went into the winter with high prices and concerns over not having enough if the weather turns cold, let alone extremely cold. The massive natural gas spreads that have extended over the Atlantic have led to the US now fully invested in the liquified natural gas (LNG) sector with the first wave of facilities up and running and an incremental 6.5 BCF of nameplate capacity under construction and ... » read more | |
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