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Monday Aug 24, 2020   
Last week was one for the ages as extensive heat moved through the entire West with the coastal cities in California reaching triple digits while the Desert Southwest was over 115 degrees for the entire period.  Such heat was something that the grid has seen in prior years but this year tallied blackouts on a Friday and Saturday evening inside PGAE's system, a chaotic bilateral market as the CAISO made the decision to cut exports to surrounding balancing authorities and wildfires raged across the state.  Each one had its own dialogue and conversation that will eventually have a chapter in the book written about the California Deregulated Market. Our latest Newsletter Article titled 'The Book's Next Chapter', takes a deeper dive into the key moving parts that led up to the ... » read more
Friday Aug 21, 2020   
This week EGPS has written extensively about the situation in California over the past week, as CAISO has seen everything from rolling blackouts and curtailed exports to energy prices exceeding $1000 amid the summer heat spell that has smothered  the entire West.  Looking at the acrobatics the CAISO has been performing to try to stay on top of their demand for power makes me think of circus performers like in Cirque du Soleil, which I would have gone to see earlier this month here in Portland, if their 2020 summer shows hadn’t been canceled due to COVID-19. Figure 1 | Picture from Cirque Du Soleil: Volta Image Source: The EIM is a key component of CAISO’s “balancing act”, easing the ability of members to find a home ... » read more
Thursday Aug 20, 2020   
I find myself scouring the website during the peak evening ramp hours to see how California is faring when it comes to balancing their system as this week will be looked back upon by economists, academic professors and the CAISO itself to make sense of how we got here, what does it mean for the near term and how will situations like this be handled in the future.  This blog is not going to go into all that but it does give you a flavor of how things are playing out.  If you sit in the California Heartland, you are working through a period of time where localized blackouts were enforced last Friday and a govenor's call for every resident to do their part by conserving the energy that was seemed to be abundant. Figure 1 | Pre-Summer CAISO Notification I went back to the archives ... » read more
Wednesday Aug 19, 2020   
It goes without saying that the Western markets have been nothing less than dull the past week or so as we have come across rolling blackouts, day-ahead exports getting cut and now the congestion between that of SP15 and NP15 was almost entirely eliminated for today's flow date.  That does not mean we should forget about what is happening on the ground level as the system operators are watching the big screens minute by minute/second by second in the bunker in/around Folsom, CA.  It is a stressfull time for many as balancing the electrical grid is never easy and with many new balancing authorities integrated via the Energy Imbalance Market (EIM).  It is an interesting puzzle that relies on several moving parts throughout the day let alone within each hour. If you ... » read more
Tuesday Aug 18, 2020   
In yesterday morning's newsletter we touched on the California power market. Today we will move over to the gas markets.  The record breaking heat has made the headlines all over the country after Death Valley posted a daytime high of 131 degrees Fahrenheit yesterday. The high temperatures have pushed the CAISO on peak load average to 50 GWa for today which smashes last year's peak load by over 6 GWa. Demand is not the only item setting records. The CAISO SP15 auction price pushed up to $667 for today's delivery which is a level not seen since the California Energy Crisis some 21 years ago.  There are rolling brown outs throughout the state as the capacity on the grid is stretched thin.  Figure 1 | CAISO SP15/SoCal CG Heat Rates for Q3 2017 - 2020 Gas demand is also at ... » read more
Monday Aug 17, 2020   
CAISO’s reliability took a turn for the worse on Friday August 15 and Saturday August 16.  High heat and high loads (approaching 47 GW) lead CAISO to initiate Stage 2 (S2) and Stage 3 (S3) emergencies on both Friday 8/14 and Saturday 8/15.  Stage 2 events represent physical scarcity of reserve margins and lead to initiation of demand response programs.  Stage 3 leads to involuntary load curtailments--i.e. rolling blackouts.  California's first in 19 years.  Figure 1 shows price patterns on Friday as the staged emergencies came and went.  At the outset it is notable that CAISO's markets saw scarcity a comin' since day ahead (DA) prices were very strong in these intervals, averaging $620/MWh for the period 18:00-21:59.   In Figure 1 ... » read more
Friday Aug 14, 2020   
The National Basketball Association is ending the first phase of their 'bubble' season as the 8-game regular season finished yesterday with the final day presenting a situation that they wanted.  The final four games on the schedule has a team vying for the 8th/9th spot in the Western Conference with our Portland Trailblazers holding the final time so they would fully understand the implications of their game and standing amongst the four.  Prior to any tip-off, the Blazers knew if they won they would lock in the 8th seed, but knowing how the others did would dictate what a loss meant.  For the Memphis Grizzlies, they came into the bubble holding a 3.5 game lead on the Blazers for the 8th spot but squandered it over the past three weeks.  The Phoenix Suns are the ... » read more
Thursday Aug 13, 2020   
Trypanophobia is the extreme fear of medical procedures involving injections or hypodermic needles.  It is common for young children as their skin is sensitive to being pricked by a sharp object.  As adults, we have a bit of a higher tolerance for the quick sharp pain the prick causes at the doctor's office.  I remember stories at the dinner table as a kid where my mother would tell us stories of her day as a nurse.  The conversation turned interesting when she turned the conversation on my father and his fear of such needles to this day.  She had stories of when they started dating and he was in stationed overseas as he was in the Air Force.  When it was time for his annual shots, he would try to get out of it but at the end of the day he had to go and there ... » read more
Wednesday Aug 12, 2020   
The NBA and MLS bubble concepts and deliverables went beyond expectations if you are a Portland sports fan as the Trailblazers (NBA) are fighting for the 8th/9th play-in seeds that have four teams battling day-in and day-out.  With two games left in the 'season' games, Portland found themselves in a win-out and get in situation, which meant that the game against the Dallas Mavericks on Tuesday put everyone on high alert.  If you wanted the game or read about it afterwards, it was a game that would go down as one of the most impressive individual performances of the year if not over the past 5-10 years as Damian Lillard ended up scoring 61 points with 24 points in the fourth quarter alone.  What is most impressive with this performance is that two games ago, Damian missed ... » read more
Tuesday Aug 11, 2020   
Year on year the Lower 48 natural gas production is off from 93 to 87 BCF. Almost all of that is due to due to declines in associated gas production from the crude basins in Permian, the Rockies and Bakken. As of recent we are starting to see a bounce in some of those fields. This is being driven by a recent spike in the WTI price back in July. Since the first of the month several producing basins are showing more natural gas volumes get pushed onto the pipelines. North Dakota has seen a 13% gain in production in just the first week of August. Oklahoma natural gas has also piled on a 28% gain in volumes. Unless we get another catastrophic price collapse the crude and associated gas production should continue to rise. This is forcing the market to adjsut their production expectations ... » read more
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