Weekly Power Outlet US - Week 39

This week EIA released their monthly Electric Power Monthly. The report of full of statistics on power generation for the month. Unfortunately, the month is July, so the data is somewhat dated, but still worth a glance. For July, the US generation of electricity was up 0.4% year-on-year. Natural gas generation increased 5.2% over 2022 and retail prices were up 3.2%. Remember, a couple weeks ago EIA increased their forecast for natural gas generation for 2023 on record amounts being used in July, August, and September. Last year roughly 40% of electric generation was natural gas. It's safe to say, that number will be higher for 2023.

The chart below shows the monthly range for wholesale electricity prices for July. Of interest, looking at the orange bars, ERCOT set both the high and low price of all the ISOs for the month. While that seems counterintuitive, as a reminder, the stack in ERCOT can be made up of 40% low-cost renewables at times. With renewables being intermittent, yesterday's abundance leading to low prices can be tomorrow's lack of generation leading to higher prices.

Long time readers of this blog may remember when it seemed like we were writing a paragraph a week about which ISO or regulatory body was commenting on grid reliability during the current week. It was so regular; it was perceived to be a bit. A congressional hearing yesterday has allowed us to bring back the "bit", but allowed us to condense it into one week. Each ISO had a representative at a hearing by a subcommittee on energy and commerce examining the state of grid reliability.

As expected, each witness testimony included the challenges faced in the transition from dispatchable to intermittent generation. PJM representative Stu Brelser, Sr VP of Market Services summed it up best when he 'urged policymakers to adopt a practice of building reliability considerations into the analysis of future potential polices to ensure alignment and help to enhance reliability into the future, while still meeting other policy goals.'.

This week the IEA-ECB conference on energy transition is getting a lot of attention. The joint back grown document lays out the main topics.

While the focus is on the growth of renewables the reality will continue to be securing natural gas. Late last week, Ditte Juul Jorgensen, the director-general for energy in the European Commission, said in an interview to the Financial Times in New York, "we will need some fossil molecules in the system over the comping couple of decades. And in that context, there will be a need for American energy.". The European Union will need to rely on the US if they continue to diversify from Russian gas. These statements were made in a broader discussion regarding LNG and its continued growth.

NOAA WEATHER FORECAST

DAY-AHEAD LMP PRICING & SELECT FUTURES

RTO AROUND THE CLOCK CALENDAR STRIP

DAILY RTO LOAD PROFILES

COMMODITIES PRICING

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