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In This Issue

ISO-NE Could See Worse Supply Crunch in 2 Years

Renewables to Reach Over 14% of U.S. Electricity Generation This Year

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.


Market Overviews

ISO-NE Could See Worse Supply Crunch in 2 Years

RTO Insider | February 4, 2015

New England’s winter energy supply crunch could be worse in two years because the closure of the Brayton Point coal-fired plant and the potential retirement of the Pilgrim nuclear plant will come before additional natural gas pipelines can fill the gap.

“The winter of 2017-2018 is the one that worries me the most, because we will have lost Brayton Point at that point, [and] there’s a question mark about whether Pilgrim is available,” said CEO Gordon van Welie during ISO-NE’s annual “State of the Grid” media briefing last week.

About 4,200 MW of existing non-gas capacity — nuclear, coal and oil — is expected to retire by 2019. The 1,517-MW Brayton Point plant will close in early 2017 and the 680-MW Pilgrim plant will close no later than 2019, assuming the plant operates beyond its current fuel cycle, which ends in 2017.

The RTO’s performance incentives to make additional generation available won’t go into effect until mid-2018. Two proposed large-capacity natural gas pipelines, Northeast Energy Direct and Access Northeast, won’t be ready to serve New England until 2018 at the earliest.

“This will be a period of vulnerability,” van Welie added.

Non-gas generation is finding it increasingly difficult to compete in the energy market, van Welie said.

“During most of the year, the low price of natural gas is setting the wholesale price of electric energy, so power plants using more expensive fuels are getting squeezed financially. As a result, more and more non-natural gas-fired generators are retiring,” he said.

For the third consecutive year, the RTO will use its winter reliability program, which rewards dual-fuel gas/oil generators.

Meanwhile, higher capacity prices have attracted new investment. Capacity auction revenues have quadrupled from about $1 billion three years ago to $4 billion last year. Since auctions for those supplies are held three years in advance, customers have so far been shielded and will not see those price hikes for another year, he said.

Forward Capacity Auction 10, for the 2018/19 period, will be held Feb. 8. Van Welie said 147 new resources, totaling 6,700 MW of new generation, demand response and energy efficiency capacity, have qualified to participate.

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Renewables to Reach Over 14% of U.S. Electricity Generation This Year

PV Magazine | February 4, 2015

The latest data from the U.S. Energy Department projects that utility-scale wind and solar will supply 5.2% and 0.8% of U.S. electricity in 2016, which will support an overall 9.5% growth in renewable generation.

The U.S. Department of Energy’s (DOE) Energy Information Administration (EIA) is an official source for U.S. energy statistics. And while EIA’s credibility on solar had suffered from its habit of not counting behind-the-meter solar generation in its Monthly Energy Outlook publication, the agency corrected that fault in December.

Today EIA forecast that large-scale renewable energy, including hydroelectricity, will rise to 14% of U.S. electricity generation in 2016, with utility-scale solar representing 0.8% of that. This will represent a 28% increase in solar output over 2015 levels.

The agency specifically excluded distributed solar, which both kWh Analytics and EIA say represents around a third of total generation. Thus if behind-the-meter solutions were included, solar could supply around 1.2% of electricity generation in 2016, and renewables overall around 14.5%.

EIA says that wind will make up 5.2% of electricity generation during the year, and when biomass is added non-hydro renewables will represent around 8.5% of generation. Hydropower will add around 6%, and EIA expects a 5% increase in hydropower output in 2016 due to heavy precipitation in the West, courtesy of the El Niño weather phenomenon.

The agency notes that the share of solar in the U.S. energy mix is expected to rise given the 13 GW of utility-scale solar forecast to come online in 2015 and 2016. The agency predicts that utility-scale solar will rise to 1.1% of U.S. electricity generation in 2017.

EIA further estimates that 4.9 GW of this utility-scale solar will be built in California. An analysis of California grid operator statistics and third-party data conducted by Utility Dive shows that distributed and utility-scale solar already represents nearly 10% of California's electricity generation, roughly 10x the national average and more than any nation on earth.

While overall U.S. electricity generation from solar is around the global average of 1%, solar and other renewable energy deployment is well below levels in Western Europe. In the nations of Italy, Greece and Germany, solar PV meets 6-8% of electricity demand annually, and at least four Western European nations - Denmark, Germany, Portugal and Spain - meet over 25% of annual electric demand with non-hydro renewables.

Read More:

Natural Gas and Oil Market Update


Natural Gas Prices Continue Lower With U.S. Supplies Down 152 Billion Cubic Feet

Market Watch | February 4, 2015

Natural gas futures continued to trade lower on Thursday after the U.S. Energy Information Administration reported that supplies of the commodity declined by 152 billion cubic feet for the week ended Jan. 29. Analysts polled by Platts expected a fall of between 148 billion and 152 billion cubic feet. Total stocks now stand at 2.934 trillion cubic feet, up 490 billion cubic feet from a year ago and 445 billion cubic feet above the five-year average, the government said. March natural gas was at $2.001 per million British thermal units, down 3.7 cents, or 1.8%. Prices traded $1.997 before the supply data.


Oil Prices Surge on Weaker Dollar, OPEC Speculation

The Wall Street Journal | February 4, 2015

Oil prices rallied for a second straight session Thursday as the dollar weakened and traders wagered that oil-producing nations are closer to an agreement on production cuts.

Light, sweet crude for March delivery recently rose $1.01, or 3.1%, to $33.29 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 50 cents, or 1.4%, to $35.54 a barrel on ICE Futures Europe.

EIA - Weekly Natural Gas Storage Report

EIA - Weekly Natural Gas Storage Report

Working gas in storage was 2,934 Bcf as of Friday, January 29, 2016, according to EIA estimates. This represents a net decline of 152 Bcf from the previous week. Stocks were 490 Bcf higher than last year at this time and 445 Bcf above the five-year average of 2,489 Bcf. At 2,934 Bcf, total working gas is within 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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