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MARKET TREND ANALYSIS

Weekly Energy Market Updates by Region - Archive

 

 

 


Issue week: September 26th, 2019  (Wk 39)

 

POWER MARKETS

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WEST High temperatures and the imminent deration of a crucial AC transmission line have driven Day Ahead prices up for the week. The deration is driving high prices during the evening ramp because the California grid relies on that line for much-needed flexibility. Maintenance on the line will take a break over the weekend but will resume on Monday and last through October 6.

NATURAL GAS 

The EIA reported today a 102 Bcf injection to storage for the week ending 9/20/2019, which was high-er than the analyst ex-pected injection, consider-ably bringing down the NY-MEX October Forward around $0.9/dth. Total stockpiles now stand at 3,205 bcf, up by 16.1% from a year ago but 1.4% below the five-year aver-age for the same week.

Prompt month SoCal Citygate has significantly increased over the week due to SoCal gas posting a notice that they need to have storage filled by the end of October. SoCal gas will need to inject at least 7-8 Bcf across October, which limits the amount of firm gas available for firm supply.

ERCOT  Term prices for the week have been mixed as heat rates have risen while corresponding gas curves are in decline. Real-time prices were surprisingly strong in the third week of September. Con-sequently, the MTD average is now above $50/MWh; of that, $12/MWh is ORDC. Assuming that wind generation is able to meet de-mand, prices should be more seasonable next week.

EAST A market alert of possible outages in November on the Algon-quin pipeline, which feeds gas into ISO-NE, was enough to stir the market. November gas contracts jumped and put upward pressure on Northeast winter power packages, which have steadily increased since September.

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WEATHER 

While temperatures will be unseasonably low in the West over the 1-to-5-day forecast period, the eastern half of the U.S. will heat up.

The In the 6-to-10-day forecast period, the cooling trend will continue in the western half of the country, especially in the Pacific Northwest. Similarly, the heat will persist in the south-eastern quadrant and along the Atlantic coast.

Overall, temperatures should normalize during the 11-to-15-day forecast period, although small warm patches should appear across the southern tier.


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LOOKING BACK ON A MILDER CORE SEASON

With summer gone, Calpine Energy Solutions’ Capacity Obligation Reduction Effort (CORE) program is also about done for the year. Barring some extraordinary develop-ment in the next four days, the data in the table below show that this CORE season was essentially an inversion of last year’s.

Whereas, in 2018, the system peaks started as early as mid-June, skipped July entirely, and showed up again in late August and early September, summer demand was more concentrated this year. All of this year’s peaks (except PJM’s fourth-highest) were rec-orded during the heatwave in the latter half of July. Interestingly, NYISO set its peak on a Saturday, the first since CORE’s inception.

Temperatures in the Midwest and East did rise late in September. Nonetheless, no day this month has had enough demand to trigger another CORE alert. If current forecasts remain in place and the weather does not drastically change before Monday, the 2019 CORE season is over.

Calpine Energy Solutions designed CORE to help its customers in MISO, NYISO, ISO-NE, and PJM manage their capacity costs. Because a consumer’s capacity charge is a func-tion not only of its ISO’s auction clearing prices for capacity but also of its Peak Load Contribution (PLC)—effectively that consumer’s share of the system load during the highest peak-load day in MISO, NYISO, and ISO-NE (and for the average of the five high-est peak-load days in PJM)—consumers can minimize the capacity costs on their elec-tricity bills for the next planning year by minimizing their energy usage during such peak times in the current year. From reducing air conditioning to shifting production schedules outside peak hours, any adjustment to electric load can be beneficial.

Calpine Energy Solutions’ CORE team aids that effort by using its vast forecasting re-sources to identify days and hours each year between June 1 and September 30 when system peak load is likely to occur. The team then issues notifications to customers so they are aware of prime opportunities to curtail their energy usage to the extent feasi-ble. At the end of the CORE season, for customers that actively participated in curtail-ment programs or simply request it, Calpine Energy Solutions provides a SCORE Card, which highlights their curtailment activity and quantifies their potential savings.

If you are interested in participating in the CORE program for next year, please contact your Calpine Energy Solutions sales representative or email CORE@CalpineSolutions.com for more information.

 

 

 

Previous Weekly Market Reports: Archive

 

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