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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
Tuesday Jul 7, 2020   
It has been a long three months of social distancing and lock down for my family (Stebbines). The efforts to avoid COVID contact started back in February when we had several neighborhood doctors warn elderly residents about the coming pandemic. By and large we have been disciplined about hand washing, face masks and avoiding unnecessary trips into public. It has worked. My family and those that live around me have been able to avoid catastrophe. But the cost has been the lack of comfort we have previously enjoyed. Prior to the outbreak we could come and go as we pleased never giving care to transmitting a virus. This has taken a toll on the teen age kids. They miss their friends and have become anxious about increasing contact this fall when they go back to school.  Because we got so ... » read more
Monday Jul 6, 2020   
As we start the first full week of July, the summer heat is upon us as the Midwest is topping the 90 degree mark as daytime highs while the likes of New York and other surrounding demand centers are looking at highs in the upper 80's with plenty of humidity.  In fact, over the next 48 hours, the weather pattern is going to bring some thunderstorms to the region that is shifting up its power demand load profile. Figure 1 | NYISO Daily Power Demand Profile - Next 7 Days The heat is not isolated to the Midwest and Eastern seaboard as the Southeast and South Central felt some wamer weather over the long 4th of July weekend.  The upcoming week is going to give way to higher wind generation which in turn will actually drive down the overall net load profile within ERCOT and ... » read more
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