Transmission Report Card, Wind, and Happy Birthday!
Energy Market Update Week 26, brought to you by Acumen.For More Updates Like This, Subscribe Here!
One of our soapbox topics has consistently been transmission. Unless the need for more transmission is addressed, the dream of emission reductions will not happen. This week, Americans for a Clean Energy Grid released their report card on where the US stands on transmission. The report is an interesting read.
For those not looking for some heavy reading over the weekend, we've attached the most important slide and it's not pretty.
Being in the electricity market business, we get asked from time to time our thoughts on renewables. If we have a couple hours to kill and are near a bar with an attentive bartender working, we will have a nuanced conversation. Since that scenario is rare, our answer usually goes something like this. Renewables are great when conditions are right, and they are much less great when not. Our reply often leads to a follow-up which usually includes something to support a narrative. Again, if time and bar space is limited, we stay as neutral as Switzerland, but add some context with an example.
This week and last, ERCOT provided an almost perfect example of what we mean. In the past three weeks, ERCOT issued two extended weather watches for extreme heat. Both June 20th and June 29th looked similar as far as the thermometer is considered, both days being brutal for us northerners. The one big exception has been the presence of wind this week. Below are some snapshots from ERCOT of the two days' production of solar and wind along with the associated prices.
We are big fans of the old saying, "a picture is worth a thousand words." While we won't add a thousand words, maybe just a few editorial ones will do. We believe, for the most part, that the market mechanism of LMP represents the reliability and availability of generation. In this case, the driver of LMP is wind. Again, renewables are great when conditions are right.
Lastly, Happy Birthday USA! Enjoy the long weekend with some baseball, hotdogs, apple pie, and Chevrolet. That jingle might date us a bit, but maybe it needs to be updated with a Tesla.
NOAA WEATHER FORECAST
DAY-AHEAD LMP PRICING & SELECT FUTURES
DAILY RTO LOAD PROFILES
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