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In This Issue

PJM Secures New Resources to Meet Electric Power Demand

EIA: 5 Year Decline in CO2 Emissions Ends

Natural Gas and Oil Market Update

EIA - Weekly Natural Gas Storage Report

NYMEX Natural Gas Week-to-Week Price Change

Natural Gas Futures - Five Year Price


NOAA 6 to 10 Day Outlook
Color indicates the probability of forecasted temperatures being above or below a historical average for the period.


PJM Secures New Resources to Meet Electric Power Demand

Electric Light & Power | May 29, 2014

The results of PJM Interconnection's recent auction to procure power supplies three years into the future continues an overall trend toward more gas-fired generation and increasing diversity of resources. They also show a shift in demand resources from limited summer availability to extended and annual availability, which improves the usefulness of demand response.

The clearing price for resources, which include generation, annual demand response and energy efficiency, is $120/megawatt-day for all of PJM except the PSE&G location deliverability area. The PSEG area is the only constrained area in this auction. The clearing price for resources in PSEG is $215/MW-day.

"Capacity prices in the western half of the market have increased to make prices more uniform across the system," said Andrew L. Ott, executive vice president – Markets. "Frankly, this is the kind of price that sends the right signals to generators. And, we've seen developers respond in this auction with new resources concentrated in the most capacity and transmission needy areas."

The Reliability Pricing Model auction produced an adequate amount of resources to serve the PJM region in the June 1, 2017 to May 31, 2018 delivery year. The total capacity procured in the auction was 167,004 MW, which represents a 19.7 reserve margin. One megawatt is enough to power about 1,000 homes.

PJM, which administers the wholesale power market, holds a three-year forward capacity auction each spring. The auction establishes contracts with suppliers who commit to make their facilities available to provide electricity for the PJM system for a year. Prices are established through competitive bidding.

The shift to increased amounts of new natural gas-fired generation continues with roughly 4,800 MW of new combined-cycle generation clearing for the first time in this auction. Almost all of this cleared new capacity is located downstream of west-to-east transmission constraints or in areas with capacity needs.

A total of 10,975 MW of demand response was procured — a decrease of about 1,433 MW from last year's auction. However, there was a significant shift to the types of demand resources that have more flexibility and a greater contribution to reliability. There were 1,401 MW more "annual" and 4,693 MW "extended summer" demand resources clearing in this auction than last year, while the amount of "summer-only" demand resources declined by 7,527MW since last year.

This shift gives system operators more year-round flexibility in drawing on demand response when needed. PJM experienced the need for flexible demand response during recent extreme weather, both in September 2013 and January 2014.

Energy efficiency continues its growth trend in PJM's capacity auctions. This year, a record 1,339 MW of energy efficiency was procured in the auction, an increase of 222 MW from last year's auction.


EIA: 5 Year Decline in CO2 Emissions Ends

Today's Energy Solutions | May 29, 2014

According to the latest edition of the U.S. Energy Information Administration (EIA)'s "Monthly Energy Review" - released with data through February 28, 2014 - the five-year (2008-2012) decline in U.S. carbon dioxide (CO2) emissions has ended and now reversed.

Carbon dioxide emissions from the consumption of fossil fuels (i.e., coal, natural gas, and petroleum plus non-biomass waste) had been declining since their record high in 2007 and were 12.52% lower in 2012 than they had been five years earlier. However, they increased by 2.39% in 2013 compared to 2012. Moreover, for the first two months of 2014, they increased by 7.45% compared to the same period in 2013.

A major share of the increase appears to be due to expanded use of coal. Coal-related CO2 emissions rose 4.17% in 2013 compared to 2012 and are up by 11.93% for January-February 2014 compared to those months in 2013. Coal accounted for 31.93% of CO2 emissions in 2013.

However, CO2 emissions from natural gas also rose: 2.13% in 2013 compared to 2012, and 9.97% for the first two months of 2014 compared to January-February 2013. Natural gas accounted for 25.79% of CO2 emissions in 2013.

Petroleum-related CO2 emissions (42.07% of the total in 2013) rose 1.29% from 2012 to 2013 and were up 1.94% in winter 2014 compared to early 2013.

Further, the increase in CO2 emissions is evident in all end-use sectors. Comparing calendar year 2013 to calendar year 2012 as well as the first two months of 2014 to the first two months of 2013, EIA data indicate that CO2 emissions from energy consumption grew as follows:

Residential sector: 4.79% and 15.32%
Commercial sector: 2.79% and 10.47%
Industrial sector: 2.58% and 5.18%
Transportation sector: 0.60% and 1.07%
Electric power sector: 0.88% and 11.48%

In addition, EIA reports that biomass (i.e., wood, fuel ethanol, biodiesel, and biomass waste), though only accounting for CO2 emissions equal to 6% of those from fossil fuels, also registered an increase: 6.09% in 2013 and 1.92% in 2014.

"The World Meteorological Organization reports that levels of carbon dioxide reached a landmark in April, topping 400 parts per million in the northern hemisphere, while NOAA adds that the combined average temperature over global land and ocean surfaces for April 2014 tied with 2010 as the highest on record for the month," said Ken Bossong, Executive Director of the SUN DAY Campaign. "Clearly, the anticipated release on June 2 of the U.S. Environmental Protection Agency's first-ever proposed rule limiting carbon dioxide pollution from existing power plants is not happening a minute too soon and much more needs to follow.”

Natural Gas and Oil Market Update

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Natural Gas Prices Turn Lower After EIA Data

MarketWatch | May 29, 2014

Natural Gas futures on Thursday turned lower after the U.S. Energy Information Administration reported that supplies of natural gas rose 114 billion cubic feet for the week ended May 23. Analysts surveyed by Platts forecast an increase of between 107 billion cubic feet and 111 billion cubic feet. Total stocks now stand at 1.38 trillion cubic feet, down 748 billion cubic feet from a year ago and 922 billion cubic feet below the five-year average, the government said. July natural gas was at $4.53 per million British thermal units, down 8 cents, or 1.8%. It was trading at $4.62 before the data.


arrow upBrent Oil Gains on Ukraine-Russia Tension; WTI Trades Near $103

Bloomberg | May 29, 2014

Brent crude rose for the first time in four days after rebels downed a military helicopter in eastern Ukraine, raising concern that supplies from Russia might be disrupted. West Texas Intermediate traded near $103 a barrel before a U.S. government inventory report.

Brent for July settlement climbed 51 cents, or 0.5 percent, to $110.32 a barrel on the London-based ICE Futures Europe exchange at 9:40 a.m. in New York. The volume of all futures traded was 9 percent below the 100-day average.

WTI for July delivery increased 42 cents to $103.14 a barrel on the New York Mercantile Exchange. Volume was 44 percent lower than the 100-day average. The U.S. benchmark crude traded at a $7.18 discount to WTI.

EIA - Weekly Natural Gas Storage Report

EIA - Weekly Natural Gas Storage Report


Working gas in storage was 1,380 Bcf as of Friday, May 23, 2014, according to EIA estimates. This represents a net increase of 114 Bcf from the previous week. Stocks were 748 Bcf less than last year at this time and 922 Bcf below the 5-year average of 2,302 Bcf. In the East Region, stocks were 438 Bcf below the 5-year average following net injections of 64 Bcf. Stocks in the Producing Region were 374 Bcf below the 5-year average of 918 Bcf after a net injection of 31 Bcf. Stocks in the West Region were 110 Bcf below the 5-year average after a net addition of 19 Bcf. At 1,380 Bcf, total working gas is below the 5-year historical range.

NYMEX Natural Gas Week-to-Week Price Change NYMEX Natural Gas Week-to-Week Price Change

Natural Gas Futures - Five Year Price

NYMEX Natural Gas Week-to-Week Price Change - Five Yearly Snapshot
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