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In This Issue

Power Grid Operator Sounds Alarms

ISO-NE Capacity Requirement Shows Flat Demand, More Solar

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

Tables

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

 

Market Overviews

Power Grid Operator Sounds Alarms

CommonWealth Magazine | November 18, 2016

Officials charged with keeping on the lights on in New England raised alarm bells on Thursday about what might happen if the region’s natural gas pipeline infrastructure is not expanded.

Gordon van Welie, the president and CEO of ISO-New England, which operates the regional power grid, has long been a proponent of bringing more natural gas into the region. But he said he now believes new pipelines will not be built because of environmental concerns. He also said growing opposition to new power plants that can burn both natural gas and oil will make it more difficult to weather future natural gas shortages.

“This has got us really worried,” he said at a conference on US-Canada energy trade and technology at the Seaport Hotel.

Without a new gas pipeline coming into the region, van Welie said, many power plants are likely to run short of gas during extreme cold periods during winter months. While that didn’t happen last winter, van Welie said the odds will increase in coming years as the Brayton Point power plant in Somerset, Pilgrim Nuclear Station in Plymouth, and other existing power plants go offline.

Van Welie said one response to any gas shortage has been the construction of power plants capable of burning natural gas when gas is plentiful and shifting to oil when gas is scarce. But he said environmental opposition to so-called dual-fuel power plants is growing, and he no longer sees that as a viable solution to gas pipeline constraints in the region.

As a result, he said, it may be necessary to pay non-gas power plants more in the future to keep them operating. He said decisions on price supports for non-gas power plants would probably be made on a case-by-case basis.

Van Welie also raised concerns about New England states contracting directly for renewable energy outside the existing marketplace for electricity purchases. Massachusetts, for example, is preparing to sign contracts directly with offshore wind and hydroelectric suppliers. Van Welie said these one-off contracts make sense for policymakers trying to reduce greenhouse gas emissions, but they have the potential to undercut the existing forward capacity market, which has been fairly efficient in meeting the region’s power needs at the lowest possible cost.  “This market framework is vulnerable,” he said.

John Reed, chairman and CEO of Concentric Energy Advisors, said the solution is to incorporate the greenhouse gas concerns of policymakers into the existing market structure. “Bite the bullet. Price carbon,” he said.

Van Welie agreed that putting a price on carbon or creating some sort of surrogate for carbon pricing would make the most sense, but he said he sees little chance that state leaders or commissioners of the Federal Energy Regulatory Commission under Donald Trump would go along with such an approach.

James Judge, the president and CEO of Eversource Energy, expressed confidence the Access Northeast natural gas pipeline will be built. The project, a joint venture of Spectra Energy, National Grid, and Eversource, ran into problems this year when the Massachusetts Supreme Judicial Court ruled that electric ratepayers under existing state law could not be charged extra on their bills to finance a gas pipeline. Lawmakers in both branches of the Massachusetts Legislature also took stands against a so-called pipeline tax.

In an interview after his talk at the energy conference, Judge said Eversource will lobby the Legislature this coming year to pass a law permitting electric utilities to assess their customers for natural gas pipeline infrastructure. He said more natural gas would bring down electric prices in the region and save customers more money than they would be charged to build the pipeline.

Judge said the company will also explore a Plan B, having natural gas ratepayers finance or partially finance a new pipeline. No law prevents natural gas ratepayers from financing a pipeline, but in general gas purchased this way flows to natural gas customers. Only excess gas that isn’t needed is sold off, typically to power plant operators.
Van Welie said the problem with Eversource’s Plan B is that, during periods of extreme cold weather, there may not be much surplus gas that could be sold to power plant operators. At best, van Welie said, Eversource’s Plan B would delay the advent of natural gas shortages and not eliminate them.

Read More:
http://commonwealthmagazine.org/environment/power-grid-operator-sounds-alarms/

ISO-NE Capacity Requirement Shows Flat Demand, More Solar

Portland Press Herald | November 18, 2016

The installed capacity requirement ISO-NE filed with FERC last week shows a continuing trend of slightly declining load growth and a greater reliance on behind-the-meter solar power.

New England’s ICR for the upcoming 11th Forward Capacity Auction (delivery year 2020/21) is 34,075 MW. That represents a capacity need of 35,034 MW minus 959 MW of Hydro-Quebec Interconnection Capability Credits.

In FCA 10 earlier this year, ICR resources of 35,126 MW were required.

“There was a small drop in ICR, due primarily to a lower load forecast, and that was due to the growing impact of behind-the-meter PV and energy efficiency measures,” ISO-NE spokeswoman Marcia Blomberg said.

The RTO said the requirement was reduced by 720 MW. In FCA 10, ISO-NE successfully defended at FERC its inclusion of 390 MW of behind-the-meter solar that was not based on historical loads.

ISO-NE said it used coincident hourly load and PV production data from 2012-2015 and information from utilities to compile its requirement.

The RTO said it qualified 150 new capacity resources, totaling 5,958 MW for FCA 11. The identities of the new resources are confidential.

ISO-NE has three capacity zones for the auction, which will be held Feb. 6: the import-constrained Southeast New England zone, including Rhode Island and southeastern and northeastern Massachusetts; export-constrained Northern New England, which includes Vermont, New Hampshire and Maine; and Rest of Pool, which includes central and western Massachusetts and Connecticut.

The RTO’s filing said five renewable energy projects in northern Maine, a landfill gas facility, a wind farm and three hydropower projects, totaling more than 22 MW, were disqualified because of insufficient transmission capacity. The Orrington interface in eastern Maine, critical to unlocking wind energy potential from the northeastern areas of the state, is the subject of a study now underway by ISO-NE planners.

Following a contentious multiyear stakeholder process that FERC essentially ended over the summer, FCA 11 will be the first time ISO-NE uses sloped demand curves for its constrained zones.

ISO-NE received two retirement delist bids, totaling 27.3 MW, from resources in northeastern Massachusetts and Maine. They were confidentially identified to RTO officials in July.

Protests challenging the ICR are due Nov. 23. The RTO wants FERC to accept the filing by Jan. 7.

Read More:
https://www.rtoinsider.com/iso-ne-installed-capacity-requirement-34218/

Natural Gas and Oil Market Update

Arrow

Natural Gas Prices Rise on Expectation of Cooler Temperatures

The Wall Street Journal | November 16, 2016

Natural-gas prices rose on Wednesday, reversing the previous day’s losses in anticipation that slightly cooler temperatures will soon begin translating into more
demand.

Futures for December delivery rose 5.5 cents, or 2.03%, to $2.7654 a million British thermal units on the New York Mercantile Exchange.

“The weather forecast is just not as bearish as it has been. I’m not calling it bullish by any stretch,” said Kyle Cooper, a consultant for Ion Energy Group in
Houston. “We’ve moderated from super extreme warmth to just warmth.”

  Arrow

Oil Prices Rise On Saudi Optimism Over Opec Deal

Reuters | November 16, 2016

Oil prices rose on Thursday as expectations of an OPEC deal to limit production outweighed evidence of global oversupply and rising inventories, particularly in the United States.

Saudi Energy Minister Khalid al-Falih said he was optimistic OPEC would formalize a preliminary oil output deal reached in Algeria in September.

“I’m still optimistic that the consensus reached in Algeria for capping production will translate, God willing, into caps on states’ levels and fair and balanced cuts amongcountries,” he told Saudi-owned Al-Arabiya TV.

EIA - Weekly Natural Gas Storage Report

EIA - Weekly Natural Gas Storage Report

Summary
Working gas in storage was 4,017 Bcf as of Friday, November 4, 2016, according to EIA estimates.
This represents a net increase of 54 Bcf from the previous week. Stocks were 47 Bcf higher than last
year at this time and 189 Bcf above the five-year average of 3,828 Bcf. At 4,017 Bcf, total working gas
is above the five-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 ($ per mmBtu)

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

Disclaimer: The information contained in these reports is gathered from public and/or internal sources and is presented solely for the convenience of our customers and Newsletter Subscribers. Patriot Energy Group makes no representation or warranty, express or implied as to the accuracy or completeness of the information set forth in this newsletter, and Patriot Energy shall not have any liability to any person or entity resulting from use of this information in any way.
 
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