Energy Solutions - Research, Trading and Management Contact Us Client Login
Featured Articles
Thursday May 28, 2020   
ERCOT has become the leader when it comes to wind capacity hitting the grid across the Lower 48.  Since that is the case, more conversation is being had about the changing intraday directional wind and the speed to which it is being gauged.  These two components have a big impact on how ERCOT's real-time supply is dispatched as certain types of units are needed as a quick response time is essential for balancing.  When you throw in the fact that the power loads have some swing to them with any deviation from a temperature forecast the grid's real-time picture starts to look quite different from that of the day-ahead market.  Wednesday, May 27th  2020, was a day that saw the real-time net load profile come in lower than the day-ahead and as a result the hourly ... » read more
Wednesday May 27, 2020   
It has been an amazing set of events this past spring. The coronavirus impacts nearly collapsed the world economy. The contagion forced populations on every continent to find shelter in their homes. Commerce in almost every major industry came to a standstill. The largest impact on the world stage was leveled upon the petroleum industry. The combination of lock down mandates and the failure of OPEC quotas left the world awash in oil. West Texas Intermediate prices fell from the mid $40's to minus $36 in less than six weeks. Producers slashed volumes, workforce and CapEx budgets in an effort to stay alive. As of right now it looks like their efforts have worked. WTI prices have recovered to $34 per barrel as of this morning.  Figure 1 | NYMEX WTI (CL) Continuous Contract Prices ... » read more
Tuesday May 26, 2020   
The past week 10 days has seen the Pacific Northwest hit is peak hydro flows on the system, which led to hydro generation numbers that averaged over 18.0 GW across the heavy load period.  We detailed how system operators managed the supply/demand balance in the following article, 'Water Just A Spillin'.  This led to the Midc bilateral market trading down around $0.00 for both the heavy and light load periods as the wind generation was additive to the already robust hydro output mentioned.  Down in California, prior to the renewable solar movement, the grid operators embraced the times less expensive supply would travel north to south on the AC and DC transmission interties as it would help displace thermal generation being produced in across the state. Figure 1 | CAISO ... » read more
Friday May 22, 2020   
The phrase "sucking wind" comes to mind when I take a look at recent ERCOT wind-weighted pricing. By this I mean the Urban Dictionary's third definition which is "In business, to perform poorly." Energy GPS has advised on a lot of wind deals in Texas -- we've represented sellers, buyers, capital providers, and merchant projects. We do settlement validations for a number of VPPAs scattered around the US -- including some in ERCOT. In recent months we've noticed that the corporate buyers have been cutting checks to projects due to the low price environment. ERCOT wind VPPAs that have been signed in the last few years have been in the $17 to $19 per MWh range, broadly speaking. Most settle at ERCOT North. Figure 1, below, shows the wind-weighted price for ERCOT North (using ERCOT North Wind ... » read more
Thursday May 21, 2020   
Growing up as a child in Western Wisconsin, the memories in the spring were tied to the snow melting and the local river tributaries rising to where the water actually starting flowing over the bridge out of town.  When this occurred, it was time to grab a group of friends and head to the entry point upstream with our canoes. As we entered the water, the conversation was all about how we needed to navigate the waters that were our version of high rapids. Figure 1 | The Spring Activity on the River I start this blog out with this story as the Midwest and other parts of the country are experiencing such flooding that starts with the Mississippi River and all it's tributaries that run through many small towns from Minnesota down throught Lousiana.  As we move to the east, the ... » read more
Wednesday May 20, 2020   
The bilateral price signal at the Midc for today is representative of the old days when Mother Nature would provide enough water in spring where the need for coal and natural gas-fired generation would not be needed across the entire 24 hour period.  When this occurs, both the heavy and light load settles shift down to the $0.00 mark with many of the end of day transactions shfiting into negative territory.  For today, the heavy load ended up settling at $0.09 while the light load came in at a negative $0.28 which tells us there is not much more the system can do but turn to the renewable/baseload sector within its own region. Figure 1 | Midc Bilateral Settles  Looking at the key components for such a downturn, look no further than the hydro and wind generation as the ... » read more
Tuesday May 19, 2020   
Spring is not the typical time of year when we expect to have extreme heat rate moves in the Northeast power markets. That situation is usually reserved for the West with the large hydropower swings and early heat events. But this year due to a number of circumstances there have been some very volatile swings that are typically not seen until we get to Q3. The swings have been quite wild with the rates moving from and expectation of an 8 during Q1 to over 12. Then virus lock down effects, swings in weather, pipeline ruptures and a production shut-ins have all fueled more volatility.  Figure 1 | PJM/M3, On Peak Cash Heat Rate Settles for Q2 2020  Here are some bullet points for the events this spring: A record warm winter dropped ResCom demand and cash gas prices. This led ... » read more
Monday May 18, 2020   
The ground rules have been set for some time and now that we are moving into the back half of May 2020, the battle between the key supply/demand components will be playing out in the cash market.  The components are production on the supply side and power burns, rescom and LNG on the demand side.  Starting with production, the price signal that laid into the month of May at the month end settle is showing its hand as the trend has been downward at a decent slope.  A lot of the decrease can be tied to associated gas but as we saw over the weekend, there is some firect impact to the natural gas shale regions like the Marcellus/Utica basin. Figure 1 | Production in the Marcellus/Utica Basin Turning to the rescom demand, the colder weather that showed up two weeks ago has ... » read more
Friday May 15, 2020   
Historically, Western Canadian oil and gas production dips in the late spring as a result of annual ‘breakup’, it typically rebounds when roads re-open.  This year, however, a rebound is less certain due to the timing of the collapse of global energy prices. ‘Breakup’ refers to springtime in Western Canada when the region’s ice roads and rivers begin to thaw.  The  roads used to access well-sites turn into a muddy, impassable quagmire while the rapid snowmelt can create widespread flooding as area rivers swell get choked by ice flows.   The spring ‘breakup’ ultimately leads to declines in British Columbia and Alberta oil and gas production by forcing drilling and onsite maintenance programs to radically slow with the ... » read more
Thursday May 14, 2020   
The market is full of jitters and unknowns as the crude market has been hit the hardest which means the associated natural gas tied to the Bakken, Permian and other regions across North America continue to see their production numbers shift lower.  This past week started out with the daily natural gas production numbers shifting down below the 90.0 BCF/d mark we say up until this point in May.  As if this morning, the 'reported' number is now down to 86.5 BCF, which is over 3.5 BCF/d lower.  If you look at the daily movement from last week to this week, the Monday numbers shfited down just over 1.5 BCF/d where as today dropped another 2.0 BCF. Figure 1 | Lower 48 Natural Gas Production - Daily Starting with the first delta earlier in the week, the 1.5 BCF/d delta seemed to ... » read more
View more [ 1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  31  32  33  34  35  36  37  38  39  40  41  42  43  44  45  46  47  48  49  50  51  52  53  54  55  56  57  58  59  60  61  62  63  64  65  66  67  68  69  70  71  72  73  74  75  76  77  78  79  80  81  82  83  84  85  86  87  88  89  90  91  92  93  94  95  96  97  98  99  100  101  102  103  104  105  106  107  108  109  110  111  112  113  114  115  116  117  118  119  120  121  122  123  124  125  126  127  128  129  130  131  132  133  134  135 ]