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Tuesday Jul 21, 2020   
Alberta's energy dependent economy is on the long road to recovery. They were hit brutally hard by both the pandemic as well as the lifting of Saudi oil limits back in April. StatsCan estimates the provincial economy crashed somewhere between 30 and 68% during the height of the lock down depending on methodology. Most of this was due to the shuttering of oil sands processing. As a result the royalty income from the sector has gone to near zero. The provincial government was already experiencing budget issues prior to this spring. Announced at the beginning of the month they now expect the shortfall to grow from 7 to 20 biillion C dollars for this year. Desperate times call for desperate measures. Premier Kenney has put forth a plan to boost infrastructure spending by ... » read more
Monday Jul 20, 2020   
Over the past few months, the world has taken on a virus like no other in the modern era as countries have shut down, economic hardship is real and individuals are trying to figure out how life will be on a going forward basis.  The United States has been a part of this movement where it seems that we are moving to the forefront of the conversation with the rising number of cases in many states that have re-opened.   Figure 1 | Daily Coronavirus Case Report in United States - CDC There was talk back at the beginning of May that the spread of the virus would slow with the summer weather being warmer and such.  It seemed to be a little premature but it was the kind of infomation the people at the top wanted to hear as re-opening states translated to the ... » read more
Friday Jul 17, 2020 Wonderful!  So said Liberace, the not-critically-acclaimed but nonetheless highly influential proto-glam-pop American artist.   And if only his consumption preferences prevailed in our chaotic-but-ultimately-rational world of power markets where value is measured with normal concave functions.  In such a world, more of a good thing is, well, worth less.  Indeed, the non-Liberace-ian view of marginal value is bearing out in a newly published assessment of long-term capacity values of renewable resources.  On July 1, California’s Investor Owned Utilities (IOUs) published new estimates of effective capacity values for renewables (SCE AL 4243-E / SDG&E AL 3560-E / PG&E AL 5868-E). As is now becoming standard industry practice, the capacity ... » read more
Thursday Jul 16, 2020   
Nicht mehr (German), Niet meer (Dutch), Pas plus (French), No mas (Spanish), No more (English) European storage is swollen and can hardly take more gas, keeping the bearish outlook for U.S. LNG exports in place.  Though major cities across the continent have had a few heat waves to lift gas demand this summer, the events have been short-lived and barely slowed the rate of storage injections.  Otherwise, weather this summer has been at- to slightly-cooler-than-normal, keeping gas demand in check.  As a result, EU storage inventories are currently sitting at levels typically not seen until late-Q3/mid-Q4.  Daily gas storage injections, withdraws, and inventory levels are reported for 20 countries, including the Ukraine and United Kingdom.  The region can store ... » read more
Wednesday Jul 15, 2020   
The day is finally upon us, it is no other than Tax Day!!!  The joyuous or dreaded day usually sits in the middle of April (15th) but with all that has happened starting in February/March, the government pushed the day back three months hence July 15th is noteworthy.  For most, both federal and state taxes are in the cards and if you are owed money the hope is that you filed early while the ones that owe go up to the brink of midnight or ask for an extension.  Extending something that has already been extended seems like a stretch but anything is possible these days.  Depending on where you live, you have to also pay some country or city taxes that get passed on during an election year. Such ballot initiatives are buried sometimes while others are front and center. In ... » read more
Tuesday Jul 14, 2020   
Over the past two weeks the COVID19 infection rates have taken a stair step higher across the country. Florida, Texas and California have all reported new daily highs for positive tests which is prompting governors across the country to take action in order to prevent overwhelming the hospital system. California is now reporting over 330 thousand cases of coronavirus prompting Governor Newsom to shut down public venues and private businesses. Restaurants, gyms, hair salons, bars and houses of worship have all been given the order to close to help prevent capacity issues. Since mid June the daily infection rate has tripled in the state. This is prompting us to look at the effects on energy demand. Since the quarantine process started back in April California has seen a dramatic change in ... » read more
Monday Jul 13, 2020   
Starting last fall, the many conversation around the renewable curtailments inside the CAISO footprint have been had to a point that they are started sounding the same.  The similarities we are referring to fall into the following buckets: More Local Curtailments Behind the Meter Solar Growth Utility-Scaled Solar Capacity Increases Transmission Outages/Maintenance Midday Must Run Thermal Generation Q2-Power Demand Low Point Each one of these is worth a Newsletter Article, to which we have written about and is tied to one of the EnergyGPS Newsletter Packages. The result of the bullet point list is summarized in the graph below as it illustrates where we are at in aggregation when it comes to CAISO Renewable Curtailments. Figure 1 | CAISO Aggregated Curtailment Daily Summary - Year ... » read more
Friday Jul 10, 2020   
These are exciting and difficult times in the electricity and natural gas markets. I'm not talking about right now -- as in how the markets are dealing with the current economic conditions. Rather, I'm talking about making good decisions related to the long term value of assets. It's exciting because de-carbonizing the grid is happening at the same time as technological and manufacturing innovation. The result is declining costs for new resources and an increasingly large buffet of things to choose from. I've always thought the "easiest" days for development were the early years of the QF contracts -- from the late 1980s to the mid 1990s. Developers had to outwork or outsmart a very sleepy utility industry. The "easiest" days for traders probably ran from 1995 through 2005 -- a ... » read more
Thursday Jul 9, 2020   
A price signal usually does the trick when it comes to getting the power and natural gas grids to balance.  The common terminology in both markets for such balancing is the word 'spread'.   If you talk to market participants, they formulate a conversation about the spread between two markets to explain how the supply/demand picture will play out.  In the gas sector, it is usually tied to the pipeline flows being max'd out and internal demand is high enough that you have to get power burns off the local system.  Once this happens, the power burn consumption resides in another region and the megawatts will be moved across the transmission lines that are in place.  If the demand for power is high enough in a region, the transmission line will meet its limit and ... » read more
Wednesday Jul 8, 2020   
The acronyms are run deep in Texas as the University of Texas goes by 'UT' while College Station graduates go by 'A&M', which formally stands for Agricultural and Mechanical College of Texas (Texas A&M).  if you drive futhur north you land in Dallas where the Mustangs of 'SMU' call home.  Southern Methodist University is famed for its football program getting caught up in a scandal that saw the NCAA dissemble the football program back in 1987.  Just to the east of SMU sits a small univeristy in Fort Worth, Texas with a nickname of the Horned Frogs or better known as 'TCU'.  The purple and white colors represent that of Texas Christian University, whcih has an enrollment of 10,500 students as any given time. Figure 1 TCU and SMU  There are several ... » read more
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