Weekly Energy Market Updates by Region - Archive




Issue week: April 1st, 2021  (Wk 13)





WESTOver the month of March, Day Ahead prices averaged $30.50/MWh in SP15 and $27/MWh in Mid-C. This time of year is usually when regional snow-pack is greatest and the spring runoff typically begins to replenish regional reservoirs for summer, but the especially dry winter in California has left statewide snowpack at only 59% of normal. On the other hand, summer water levels are projected to be at 92% of normal in the Pacific Northwest. The reduction in unregulated water will decrease the amount of flexible power generated by hydro facilities and could very well raise prices this summer.

ERCOT  Real-time prices have cleared at seasonally typical levels throughout the week, and the ORDC adder has remained minimal. However, term prices are up in the front of the curve, mainly because of slightly elevated natural gas prices. One of the biggest movers in the term market is the strip for next winter (January-March), which has leapt from the mid-$20s/MWh to the low $30s/MWh

EAST Prices in the main hubs closed March rather quietly. Day Ahead and Real Time LMPs averaged in the low $20s/MWh with minimal DART spreads, which, on average, either had Real Time slightly below Day Ahead or were close to zero. The largest spreads were in MISO’s Indiana Hub, where Real Time was $1.57/MWh less than Day Ahead, and NYC, where Real Time was under Day Ahead by $1.70/MWh.







As the world makes progress toward the goal of long-term decarbonization, one product, in particular, will play an increasingly important role in building the infra-structure of that green future: steel. However, the make-over of the energy industry being so critical to that ideal, the importance of steel is rather ironic. Although the more than 300,000 miles of natural gas pipelines and more than 190,000 miles of oil pipelines in the U.S. are made with steel, steel also composes the 58,000 wind turbines generating renewable wind power throughout the U.S.

Moreover, that steel production itself is still a fairly emissions-heavy process begs the question of how the steel industry can reduce emissions as demand for the commodity is expected to rise. Indeed, the World Steel Association expects global demand for steel to grow by 20% by 2050, the year coincidentally targeted by many countries, including the U.S., for aggressive cuts in their greenhouse gas (GHG) emissions. The steel industry does have a long record of focusing on environmental stewardship. Per World Steel Association data, the amount of energy used in steel production has been slashed by 60% over the last 50 years, and steel is the most recycled material in the world. In addition, approximately 90% of the water used by steel producers is cleaned and returned to source, often more sanitary than before.

Today, the steel industry operates at the limits of current science and technology. To meet GHG reduction commitments such as those in the Paris Climate Agreement, the industry will need new breakthroughs. If, in years to come, certain key developments, ranging from carbon capture to electrolysis and hydrogen-fueled electricity generation, bear fruit, steel will resolve its dichotomy and cease to be the mixed blessing that it has been.




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