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Thursday Dec 17, 2020   
In the movie 'The Good, the Bad and the Ugly', three men set off during the American Civil War to find two hundred thousand dollars in buried gold coins.  The film was marketed as the third and final installment in the Dollars Trilogy following a Fistful of Dollars and For a Few More Dollars.  It was a financial success growing over $25 million at the box office and it is credited with having catapulted Clint Eastwood's acting career and eventual stardom for decades to come. Figure 1 | The Good, the Bad and the Ugly In the energy space, this week has presented a similar trio that has not made it to the box office yet but definitely the internet and conversations across the internet as everyone continues to either work from home or in an office that is currently at no ... » read more
Wednesday Dec 16, 2020   
The idea of having white ground cover over the holidays might actual happen in the Midwest/Ohio Valley and definitely the Northeast region as Mother Nature is sprinkling some colder temperatures along with precipitation which equates to snow hitting the ground. The former definitely has a lower percentage of sticking around as the light dusting can go away with a couple of degree swing in the forecast as current temperatures are having around the freezing level during the day and dipping slightly lower at night.  Currently in Minneapolis, there are light flakes coming down as temperatures sit at the 18 degree level with its daytime high expected to get up to 29 degrees.  In the likes of Cincinnati and other Ohio cities the current temperature is more like 29 degrees going on ... » read more
Tuesday Dec 15, 2020   
The warm weather conditions have been the story line for Lower 48 natural gas balancing for the first month and a half of this winter. November saw record above normal temperatures which delayed the onset of seasonal storage draw downs into this month. November ResCom demand would normally average 29 BCF per day. This past November posted at only 24 BCF per day. The warmth has been ongoing for about a year which was the last time the continent saw a sustained below normal event. The storage in the United States remains well above normal but that is not the case abroad. After reaching full capacity this summer European storage is on a pace for a record inventory draw. And because of the differing balancing dynamics between the two continents, futures prices have lost all ... » read more
Monday Dec 14, 2020   
As we all have our lists made and we start checking them twice during the holiday season, the EnergyGPS Newsletter Offering, Consulting and Subscription parts of our business continue to add to our list of reports and offerings to both clients and prospects alike.  As part of the Newsletter Offering, we have a three tiered approach with the Silver package allowing individuals access to historical blogs like this one.  As one steps up in level, the previously mentioned packages are include.  Next up is the Gold package, which allows the client to access EnergyGPS Articles, which tie in pertinent topics/focal points in the energy space.  Some of the recent articles released touched on NP15 Battery Pricing, Unlucky and Scariness - Friday the 13th and Saved by the ... » read more
Friday Dec 11, 2020   
One of my uncles is the resident holiday Grinch for my extended family.  Each year as fall turns to winter he will be heard to loudly complain that the decorations are going up to too early in the stores and on people’s houses.  Lights and trees and the like, he strongly maintains, are not appropriate until at least the first of December—and December 15th would be better.  I and the rest of my family largely ignore his tirades.  Imagine my surprise, when I learned that tinsel and lights had been sighted at his house the year mere days after Thanksgiving! He may not be the only one to have gotten a jump-start on their holiday festivities.  The Washington Post, among other news outlets have suggested that weariness from a year filled with worries about ... » read more
Thursday Dec 10, 2020   
Since the start of December 2020, the Natural Gas Futures curve has shifted down with the Prompt Month leading the way as it has gone from $2.88 down to the $2.40 mark only to bounce back the last couple of days to currently sit at $2.45.  Most of this change was driven by the above normal temperatures throughout the month of November, especially given that the two previous starts to winter have been quite chilly.  During the first week of the new month, the 1-15 day weather models were showing a quick winter snowfall in the Northeast only to give way to above normal temperatures.  All the local weather channels throughout the Midwest were calling for a not-so white holiday season while the South Central was going to be swinging in/out of chilly weather to above normal and ... » read more
Wednesday Dec 9, 2020   
If you have been active in the electricity market with a focus on the West, California tends to come to the forefront of the conversation as there is always something happening  worth talking about.  The history is endless but we will pick it up at the time I started my career in the space (late 1990's).  All eyes were on the California legislation and utility commissions as deregulation was in the works and ready to make a splash in April 1998.  The drastic change in how the utilities operated was deemed an instant success only to be take a drastic turn due to the construct of the rules and policies which include freezing the retail rates for customers, not allowing the utilities themselves to place bilateral long term hedges and real-time price caps not aligned to ... » read more
Tuesday Dec 8, 2020   
The story line during the early part of this winter has been the persistent above normal weather the hemisphere has experienced. It has been over a year since the continent has seen a major below normal event. The lack of heating load during the month of November has kept the EIA storage inventory close to 4 BCF. In order to work off the supply abundance the market has sold off the Q1 NYMEX futures almost $1.00 in the past two weeks. The 30% move in the NYMEX pricing has started to lift heat rates as more gas generation gains merit in the electric grid dispatch.    Figure 1 | CAISO SP15, PJM and SPP Heat Rates for Q1 2021 Since the first of December power burns across the Lower 48 have moved from 23 to 32 BCF per day. Part of that is the recovery of power demand for ... » read more
Monday Dec 7, 2020   
In last weeks special report, 'CAISO Value Stacking 101', we delved into the delicate balancing act that a grid scale battery needs to perform in order to maximize its revenue while providing multiple services with unique requirements. In order to move energy from low priced hours to high priced hours (energy arbitrage), you need to utilize both your battery’s inverter capacity (MW) and its storage capacity (MWh) to make that happen. However, both of these assets are also required in order to provide regulation services. For example, when a battery clears the energy market at its bid price, the range of deviations it can make from its awarded energy activity will change. As the battery charges, it will be able to provide more upwards regulation (RegUp) because it can stop charging ... » read more
Friday Dec 4, 2020   
EGPS has been developing and refining a model for solar plus storage assets for the last few years. We’ve developed an elegant model that uses a single day-ahead, hourly price curve to value the solar and provide a baseline for the storage asset. Then the storage asset receives additional value stemming from the real-time price arbitrage and ancillary service sales. The day-ahead hourly prices form the key nexus between solar and storage assets plus the day-ahead prices represent important storage hedging opportunities in the wholesale markets. In this blog, we focus on the important differences between day ahead and real time prices, where as our featured special report for the week will detail the foundations of this modeling approach.  To access the special report, you ... » read more
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