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MARKET TREND ANALYSIS

Weekly Energy Market Updates by Region - Archive

 

 

 


Issue week: August 22nd, 2019  (Wk 34)


POWER MARKETS

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WEST With no major outages or heatwaves on the West Coast over the summer as September draws near, Day Ahead prices continue to clear relatively soft. Over the past week, Day Ahead ATC has averaged $31.91/MWh in SP15 and $26.66/MWh in Mid-C. In the term market, the resolu-tion of pipeline issues and stabilization of gas storage levels have sus-tained the bearish outlook and caused forward prices to drop from last week.

NATURAL GAS 

The EIA reported Thurs-day morning that, for the week ending August 16, U.S. inventories in-creased by 59 bcf, well within the predicted range of 56-65 bcf. Total stockpiles now stand at 2,797 bcf, up by 15.2% from a year ago but 3.6% below the five-year aver-age for the same week.

Index prices have come down since last week as the risk of price spikes due to summer heat fades. The September contract has been flat since last week. Prices for futures further out in the curve have dropped by a few cents.

ERCOT  Real time prices have returned to more seasonal levels this week. Yet, the ATC average MTD price is still near $200, taking hourly shaping into consideration. The entire monthly average should be close to $150 by month end. Summer peak pricing for 2020 and 2021 are up by $26 and $14 / MWh, respectively. Term heat rates are up modestly as well, while term gas has fallen about a nickel.

 

EAST Prices are stable across PJM, ISO-NE, and NYSIO. Real Time av-erages, in the low $20s/MWh to mid-$20s/MWh across trading hubs, are lower than last week. The heat that went through PJM earlier in the week failed to cause any unusual price spikes. Thunderstorms snuffed out the heat and load in NYISO last weekend.

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WEATHER 

Whereas Texas and the West will be rather warm in the 1-to-5-day forecast period, the Midwest and Great Lakes region will en-joy a cooling trend.

Over the 6-to-10-day fore-cast period, the cool weather should extend in-to the Northern Great Plains while the warmth continues in California and the Pacific Northwest.

Heat will persist on the West Coast during the 11-to-15-day forecast period, but temperatures should fall below seasonable norms in the Northeast.

 

DEMAND STABILIZING ACROSS MULTIPLE REGIONS

 

Things really heated up in Texas last week, when ERCOT set its peak demand for August (so far) on Tuesday, August 12, at a whopping 74,531 MW, which also happens to be its all-time record. The following table shows ERCOT’s summer peaks thus far for 2019.


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Some of ERCOT utilities’ demand charges are based on the ERCOT system-wide peak in each of the summer months of June, July, August, and September. Vol-untary reduction by customers during these four peaks will likely help customers save on some of their Transmission & Distribution utility charges. August is not done yet, and there is still one more month to go. Nonetheless, the region is starting to cool off.

Unlike ERCOT, PJM has a forward capacity market where it bases its capacity program on the top five coincident peak hours that occur on different days from June 1 through September 30. This past Monday, August 19, blistering heat yielded a new fourth-highest peak demand for the summer at 141,381 MW. Peaks thus far are listed below.

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Forecasts for the near future in PJM look stable as well. Of course, if the weath-er heats up again, this leaderboard could easily change.
Capacity charges for ISO-NE, NYISO, and MISO are based on their respective single highest peak demands of the year and not limited to the summer months (although those peaks have always occurred in the summer). True to form, the yearly peaks for these regions were set back in July, as shown below.

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These peaks are not likely to change. Indeed, Calpine Energy Solutions sent an alert under its Capacity Obligation Reduction Effort (CORE) program for NYISO earlier this week but cancelled it when thunderstorms and cooler weather wiped out the load.

In sum, demand may be calming down across the various regions, but Calpine Energy Solutions will be sure to let customers know if that changes.

 

 

 

 

 

Previous Weekly Market Reports: Archive

 

Disclaimer: This report is for informational purposes only and all actions and judgments taken in response to it are recipient’s sole responsibility. Champion Energy Services does not guaranty its accuracy. This reports is provided ‘as is’. Champion Energy Services makes no expressed or implied representations or warranties of any kind. Except as otherwise indicated in this report, this report shall remain the sole and exclusive property of Champion Energy Services and shall be free from any claim or right, license, title or interest. Champion Energy Services shall not be liable for any direct, indirect, incidental, consequential, special or exemplary damages or lost profit resulting from this report.