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Thursday Apr 9, 2020   
Yesterday we detailed how the ERCOT market was facing a huge uptick in it's peak net load profile as temperatures were going to be well above normal and the wind generation saw its forecast show a big dip down during the middle of the afternoon hours.  The combination of the two was enough to push the net load up to the 47.6 GW level compared to the 41.8 level the prior day and 31.8 GW on Monday.  The ERCOT day-ahead auction results reacted to the higher peak load by clearing around $300 for an hour or two during the later afternoon hours. Figure 1 | ERCOT Day-Ahead Net Load and North Zone Hourly Breakdown Come real-time, the hourly auction clears for the North Zone matched that of the day-ahead with a slight shift by an hour (later).  Things could have been far worse when ... » read more
Wednesday Apr 8, 2020   
Summer-like weather is in the cards for today throughout the Lone Star State and with that comes higher power demand and lower wind generation.  In our most recent Newsletter Article, titled Another Round, we detailed how each of these components would interact with each other to create a pinch point in the later afternoon block of hours.  Looking at the ERCOT day-ahead auction results, things are playing out as expected as the heavy load period averaged just under $100 across all key regions while the natural gas price for Houston Shipchannel continues to be well below the $2.00 mark.  The combination of the two, put the implied heat rate for each zone up around the 54 point level. Figure 1 | ERCOT Day-Ahead Auction Breakdown Taking a look at the actual scheduled load and ... » read more
Tuesday Apr 7, 2020   
Energy markets have been hit with a double edged sword over the past month and a half. The spread of COVID19 has bled out global demand. At the same time, the untimely falling out of the OPEC production agreement has pushing more supply out to the world. Oil prices have been cut in half. The WTI price per barrel has dropped from $53 to $26 per barrel and unless some supply agreement can develop there is little hope of a recovery in the near future thanks to the ongoing lock down mandates. As a result, the ethanol industry has been hit with the same fate. The United States produces 16 billion gallons of ethanol per year (44 million gallons per day), 20% of which gets exported to overseas markets. That production is used as a fuel additive to in the refining process as a way of ... » read more
Monday Apr 6, 2020   
With all that is going on in the world, we decided to set up a Google Hangouts video conference with our friends in Barcelona, Spain. The good news is they are doing alright during the time of stay-in-place mandates by the country's government officials along with the ruling party of Catalonia.  They live on the top floor of a 25 story building where they have a terrace that is big by European standards and is their sanctuary throughout the day as the means of walking around the city are forbidden unless you are heading to the grocery store or butcher shop to buy food.  They said that the mandate is for families to go to the store once over a period of ten days and when they go there can only be five people inside at one time.  You can now call the local grocery and place ... » read more
Friday Apr 3, 2020   
For those of us fortunate enough to  not be impacted health- or employment-wise by the COVID-19 crisis, it was a week to be very grateful for what we have.  To the people on the front line of this crisis, from heath care workers to the many workers providing essential service, EnergyGPS sends out heartfelt appreciation.  And, as this week ends, EnergyGPS also wants to give a shout out to the employees of the electric power grid--especially those that still report out to the plants, operations centers, and distribution lines—for making the grid hum without notice during this crisis.     With these positive thoughts in mind, we wanted to circle back to a recent energy policy decision that will significantly impact the California power grid in a ... » read more
Thursday Apr 2, 2020   
During any election, the news stations use the words 'swing state' as the ballots are being counted and the individuals running for office are all on pins and needles.  The reference is to any state that can go either way hence the political party member who wins the votes is one step closer to winning the overall election.  When it comes to the electricity sector, the swing states are Oregon, Washington, California, Texas and Oklahoma/Kanasas/Nebraska as they have the biggest influx of renewable resources such as hydro, solar and wind.  Prior to the integration of wind and solar, the Pacific Northwest was probably the most volatile true power supply stack as Mother Nature could deliver enough precipitation to push the hydro generation to heights beyond any power demand ... » read more
Wednesday Apr 1, 2020   
What a start to a new month, ERCOT's wind is expected to average over 16.7 GWa across the 24 hour period on Wednesday, April 1st.  If I would have written this type of information in the newsletter blog, say 10 years ago, you would have most likely attributed it to a funny April Fools joke as gas induced market was very protective of its own turf.  How times have changed as ERCOT continues to be the leader when it comes to installed capacity across all of North America. Figure 1 | ERCOT Daily Supply/Demand Breakout Table - Daily If you have been following the ERCOT market as of late, the grid saw above normal temperatures last week that shifted the overall power demand profile higher while the hourly wind generation profile saw the mid-afternoon period drop down to less ... » read more
Tuesday Mar 31, 2020   
Oil prices have been hit with a double edged sword in the last month. The failure of Russia and OPEC nations to come to a quota agreement has led to a glut of supply in the world market just as coronavirus effects sap the demand. Zerohedge posted a good article about how some of the oil basis points have now dropped to all time lows. Canadian oil prices have fallen from $50 to below $5 per barrel (C$8) as the signal is being sent for the industry to shut down production. Marginal costs for oil production in the Athabasca range from C$30-45 per barrel so this is well below the price needed to sustain volumes. The article posted yesterday had us thinking about the probable changes to natural gas balancing in Western Canada. ZeroHedge: Oil Price Article Figure 1 | Western Canada and ... » read more
Monday Mar 30, 2020   
The world has a lot going on right now as information overload is front and center when it comes to the Coronavirus and the inability for countries to get in front of it in a way that allows for people to go about their daily life.  We have China that has begun to dig itself out of what would be considered self-quarantine for the past couple of months, while Italy and Spain are still in the trenches fighting for their countries life as many close knit families live with other family members in high density apartments.  Then we have the United States, who joined the countries mentioned by instilling the stay-at-home mandates by state.  As it stands this weekend, compared to last weekend, we have more cases across many more highly populated areas including Detroit, Chicago ... » read more
Friday Mar 27, 2020   
The good people over at Lawrence Berkeley National Laboratory (LBL) have recently published a report on the state of batteries in US electricity markets. LBL has partnered with the Electric Power Research Institute and Clean Kilowatts to write “Motivations and options for deploying hybrid generator-plus-battery projects within the bulk power system.” (see link below) Like most LBL electricity papers, it is well researched, relies on publicly available data, and is clearly written. While those who already perform detailed battery analysis may find the analytics to be overly simplified, it provides a good overview of battery costs, batteries in the interconnection queues, and comparative value of stand-alone versus paired with solar versus paired with wind. Figure 1 | Resource ... » read more
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