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| Wednesday Aug 29, 2018 | |
| With everything that has been going on in California this summer and the anticipation of ERCOT blowing up in July and August, SPP has been the forgotten market. In today's newsletter we take a look at what has been happening from a supply demand standpoint over the past week or so and how the renewable picture has shaped up this summer. To start things off, let us take a look at the daily net load to hourly implied heat rate graph for SPP South Hub. Figure 1 | SPP Net Load and South Hub Implied Day-Ahead Implied Heat Rates - Hourly The x-axis represents the hours broken down by day while the left y-axis is in GW while the right y-axis is the implied heat rate. The red line represents the power load forecast/actuals while the darker shaded blue is the wind ... » read more | |
| Tuesday Aug 28, 2018 | |
| Late last week FERC posted a notice that they have approved Rover Pipeline’s request to add an additional two laterals to the mainline receipt point that transports volumes Northwest into Michigan. The Majorsville and Burgettstown additions will bring an additional .8 BCF out of West Virginia taking total flows on the Rover Pipeline from 2.1 to 2.9 BCF. On Friday, Energy Transfer, the owner/operator of the pipe posted a notice that the pipeline would be capable of moving gas as early as this weekend. Firm subscriptions are expected to start on September 1 guaranteeing full flow of the expansions in just a few days. Beyond this coming jump in capacity, there are still .45 BCF of additional laterals in the works that will complete the 3.25 BCF per day design of Rover. Those are ... » read more | |
| Monday Aug 27, 2018 | |
| The last few days of August are upon us, which symbolizes the end of summer for many as they head back to school. In Texas, the end of August gets a big sigh of relief from the system operators at ERCOT as it is typically the one month where the grid gets tight due to warm temperatures, unplanned outages and other variables in the marketplace. The anticipation to this year was big as several coal units retired back in Q1, thus the supply stack has had to lean on the natural gas fired generation, the hope of wind showing up during the later afternoon hours and any type of demand side management tied to the loads on the grid. Figure 1 | ERCOT's Net Load Year on Year Comparison - 7 Day Rolling Average Starting with the first item on the list, natural gas fired generation. ... » read more | |
| Friday Aug 24, 2018 | |
| This week the EPA proposed to replace the Clean Power Plan (CPP) with the Affordable Clean Energy (ACE) rule. Unveiled by the Obama Administration in 2015, the CPP would have required states to develop plans to meet state-specific emission reduction targets. The EPA analyzed the power sector in each state and developed what the EPA considered to be an achievable path to carbon reductions. Each state had its own bespoke limit. Since the CPP was rolled out by the Obama administration, it has been mired in lawsuits and was ultimately put on hold when Trump came into office. While I am a fan of using market mechanisms to put a price on carbon, the CPP was a pretty convoluted way of doing it. The reason for the CPP’s convoluted structure stems from the fact that the CPP is the child of ... » read more | |
| Thursday Aug 23, 2018 | |
| The recent CPV Towantic and Footprint combined cycle power plants were added to the ISONE grid as we moved into the third quarter (Q3). With the region seeing one of the hottest summers in recent history, it’s a good thing the additional capacity was available. Both units ramped into the market at the start of July as soon as the first major heat wave hit. The combination of these additional plants with a slight increase of approximately 60 mmcf/d of capacity along the Stony Point Compressor compared with last year kept the marginal megawatt in the South more frequently than would have been possible otherwise. Looking at the regional generation in ISONE available on our Zonal Generation tool shown in Figure 1, we can see that Southern output remained at higher levels ... » read more | |
| Wednesday Aug 22, 2018 | |
| You swing across every ISO nowadays and there are two common themes that really impact the real-time grid when it comes to balancing which in turn can be reflected in price. When the grid is short, the grid operators are looking for some sort of supply to ramp up so the supply equals the demand. On extreme cases, which we saw on certain days/hours during the month of July in ERCOT, the price action skyrockets as the grid moves into what is known as scarcity pricing. This usually lasts for a couple of hours depending on the circumstances tied to the power demand profile as well as what is going on with the generation stack. When the grid is long, the reverse needs to happen as the grid operators are trying to send a price signal for generation to actually reduce ... » read more | |
| Tuesday Aug 21, 2018 | |
| The NGTL gas system in Alberta has been under stress all summer. Maintenance and construction outages continue to plague the region causing havoc for exports and storage injections leaving few avenues for balancing. That has resulted in a very volatile cash dynamic. This week we saw another episode where the delivery issues on the system forced the cash market to index $0.44 with some trades coming in much lower at the end of the trading period. The index itself is off from $1.00 print seen for the Friday prior to the weekend. The culprit is another string of restrictions in the Northern Delivery Zone. Figure 1 | AECO Cash Prices for Apr - Aug 2018 In previous low price events, we have seen natural gas generation as well as imports come to save the day. » read more | |
| Monday Aug 20, 2018 | |
| If you live on the West Coast there is a high likelihood that the air is filled with smoke from the fires in California all the way up to British Columbia. In fact, as woke up in my hotel room (daughter's soccer tournament) in Seattle, WA the sun was hazy bright glowing orange which indicated that the smoke returned to a point that the air quality was going to be in question once again. Fortunately the soccer match was early in the morning as on the drive home in the afternoon only got worse the further I drove south on I-5. Figure 1 | Portland SMOG Once we arrived in Portland, the sky was filled with this haze which made me wonder how anyone could live in a city where this type of air quality is a common occurrence. The forecast are calling for the haze to ... » read more | |
| Friday Aug 17, 2018 | |
| Right around the year 2000 electricity policy makers at FERC and across the country collectively said: “We are sick of stranded utility generation costs. We want independent power producers to invest capital, take risk, and earn returns. We want to create competitive wholesale electricity markets where merchant generators can thrive.” Calpine heard the call and got busy building out its fleet of efficient, merchant natural gas generators. Yes, they got out a little too far over their tips, filing for bankruptcy in 2005, but today they are the largest generator of electricity from natural gas and geothermal resources in the United States. Its fleet of 79 power plants in operation or under construction represents approximately 26,000 MW of generating capacity. In 2018, J.J. » read more | |
| Thursday Aug 16, 2018 | |
| When it comes to weather, Portland-OR has seen the most consecutive 90 degree days within recent history while California has come off a record breaking month of July. Over in the East, the Northeast got off to a mild summer as June temperatures fell in line with last year. However, this quickly shifted to the upside as July heated up. Looking at the year over year monthly average temperatures, there was a 3 degree spread during the month of July. Figure 1 | Actual Temperature Averages for July Even though it was hotter, the simple graphic misses some of the details. Last summer held a fairly stable temperature across the region, but this summer saw wild swings with heat wave after heat wave passing through while interspersed thunderstorms brought flooding rains separating the heat ... » read more | |
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