Weekly Power Outlet US - 2024 - Week 19

Northern Lights, Nat Gas Rally?, Microsoft

Weekly Power Outlet US - 2024 - Week 19
Photo by Vincent Guth / Unsplash

Northern Lights, Nat Gas Rally?, Microsoft

Energy Market Update Week 19, brought to you by Acumen.

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green and pink light in the sky
Photo by NOAA / Unsplash

Living in the northern part of the US, Aroura Borealis or the Northern Lights aren't common, but certainly not a rare event. On the flip side, seeing the Northern Lights in Alabama might be considered extremely rare. While most consider the Nothern Lights a magical, or even spiritual event, those in charge of the power grid are a little less welcoming.

This morning, MISO has sent a preemptive message of a geometric disturbance that will likely cause most ISOs to issue alerts or warnings over the weekend.

According to a 2017 paper Joe Bennett a Senior NERC Reliability Specialist, a geomagnetic disturbance (GMD) can cause geomagnetically induced currents (GICs). "GICs cause variations in electrical current in the magnetosphere and the ionosphere (layers of our atmosphere), which in turn adversely affect Earth's magnetic field. They induce currents in conductors such as power lines that can affect power grid transformers.".

MISO Alert- The Space Weather Prediction Center has issued an unprecedented GMD "Watch" for Friday evening through the weekend.  There has been some major geomagnetic storm activity this week that have resulted in several large coronal mass ejections.  While there is no Alert or Warning being issued at this time the SWPC is stating that a K-8 level (G-4) or higher is LIKELY.  The affects may be seen as far south as Alabama.  For awareness, the last time a G-4 Watch was issued was in 2005. 

MISO will be monitoring conditions and if the SWPC issues a Warning, as expected, MISO will take actions outlined in our Geomagnetic Disturbance Operations Plan SO-P-AOP-01 Rev: 8.

By the way, as a public service, should your GPS tell you to turn left into what looks like a lake this weekend, use common sense, your GPS might not be immune to a GMD.

a hand holding two black cards with the words buy and sell written on them
Photo by Kelly Sikkema / Unsplash

Yesterday the EIA storage report showed a build of 79 Bcf for the week ending May 3. That was slightly less than the expected 84 Bcf. This doesn't seem significant, but it was enough to extend a weeklong rally. Inventories are now 33% above the 5-year average down from almost 40%. It appears the market is starting to react to some of the production cuts as we head into late spring and summer.

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Speaking of summer, a good chunk of the Midwest got blasted with severe storms over the last two weeks. Some of the weather models are suggesting that once this pattern clears, it will usher in warmer temps. Less production and warmer temps might be the recipe to see gas move.

Source: Barchart

Electricity day ahead pricing was fairly flat week over week, with the exception of Wednesdays on peak in ERCOT. ERCOT had issued a weather watch as high temps pushed up demand coupled with some baseload generation being on maintenance outage. Strip pricing continues to trend higher as we head to summer.

car parked in front of building
Photo by Matthew Manuel / Unsplash

Last week in our overview of some of the investor owned utilities earnings calls, we highlighted the increased conversation around data centers. WEC had mentioned that we should expect something soon from Microsoft and the expansion of their current project between Milwaukee and Chicago. "Something soon" was apparently this week. Microsoft announced that it was going to spend $3.3 Billion to build a state-of-the-art datacenter campus over the next two years. In conjunction with the datacenter, Microsoft is partnering with National Grid Renewables to build a 250 MW solar farm in Wisconsin with completion scheduled for 2027. By the time this is done, MSFT says it will have 4000 MW flowing into local grids, enough to power over 3 million homes.



Red signifies week over week price change down / Green signifies week over week price change up
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