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In This Issue

Natural Gas Leads Pack for US Power Generation

Massachusetts Solar Industry Steps up the Pressure as Net Metering Caps Bite

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

Natural Gas Leads Pack for US Power Generation

Argus | March 31, 2016

Natural gas-fired generation will remain the dominant source of power generation capacity for years to come amid low gas prices, tougher emissions standards and an aging fleet of coal-fired plants.

Wind, solar and other renewables are capturing a greater share of the power generation capacity mix. But the immediate outlook for capacity shows continued reliance on gas and other traditional forms of generation, according to the American Public Power Association (APPA).

More than 168,000MW of generation capacity was added in the US between 2008-2015 — 42% of which was gas, 33% was wind, 11% was coal and 8% was solar.

Gas was the only fuel type for which there were more capacity additions than cancellations during that period, APPA said.

In addition, gas is expected to fuel the largest share of electricity generation in 2016 at 33pc, topping coal which historically has been the leading fuel source, according to the US Energy Information Administration (EIA).

A glut of gas from US shale fields have pushed prices lower, creating more demand for the fuel. Spot gas prices at the US bench mark Henry Hub averaged at $1.67/mmBtu in March, 40% lower than a year earlier. The EIA projects Henry Hub prices in 2016 should average $2.25/mmBtu, down from $2.61/mmBtu in 2015.

Gas consumption for power generation reached 26.5 Bcf/d in 2015, a year-over-year increase of 19pc, as electric utilities substituted low-cost gas for coal. The EIA projects power sector gas consumption this year to reach 27.3 Bcf/d.

US marketed production which peaked last August at 79.8 Bcf/d should average 79.68 Bcf/d this year, up by about 1% from 2015. Production should increase by 2.1% next year, according to the EIA.

Gas-fired generation currently accounts for 42.7% of the 1.17mn MW US electricity generation capacity and about 50% of the 42,205MW generation capacity that is under construction, according to the APPA.

Operators of US coal plants are faced with growing challenges in regulatory pressure from the US Environmental Protection Agency (EPA)'s mercury and air toxics rule and the Clean Power Plan for reducing CO2 emissions in the power sector.

Some power plant owners had to implement costly upgrades for emissions controls on coal-fired units but some plants were retired as the owners analyzed the upgrades would be too costly given increased competition from gas.

In the past year wind took the top spot in new capacity addition followed by gas.

About 6,152MW of wind generation and 4,972MW of gas-fired generation was added in 2015, while more than 18,000MW of generation capacity was retired, of which coal accounted for almost 80%, according to the APPA.

Read More:
http://www.argusmedia.com/News/Article/?id=1212666&sector=POWER&region=ALLREGION

Massachusetts Solar Industry Steps up the Pressure as Net Metering Caps Bite

PV Magazine | March 31, 2016

Over 100 solar workers representing over two dozen solar companies descended upon the Massachusetts State House this morning to put more pressure on legislators to lift the state’s restrictive caps on net metering. They brought with them over 5,000 petitions and letters addressed to House Speaker Bob DeLeo (D).

The timing of lifting the state’s existing caps on net metering, set at 4% of peak load for private installations and 5% for public projects, is becoming more and more desperate. While the first program caps were hit in the service area of utility National Grid a year ago, recently the cap for private installations was hit in the service area of Unitil, and Eversource has only 200 kW remaining.

With much higher penetrations of solar PV on the grid in other states and nations, there is clearly no valid technical reason for these caps. Instead, Massachusetts' solar industry and the 15,000 jobs which it represents are being held captive by politics.

“We’re fighting from a tough position,” Vote Solar Northeast Regional Manager Sean Garren told pv magazine. “Utilities… benefit from the status quo working in their favor.”

Last fall legislators left for winter recess without reconciling two different bills to raise the caps by 2%. It is widely recognized that the uncooperative party in negotiations was the leadership of the House of Representatives. Aside from lifting the net metering caps by 2%, the House bill read like a wish list for the utility industry. This included moving net metering compensation from retail to wholesale rate, and instituting a minimum bill for customers.

While the House bill was passed nearly unanimously, a number of legislators changed their tune after being contacted by constituents. Two weeks ago a letter signed by 100 members of the House calling for the caps to be raised without the move to retail rates was sent to House leadership.

However, despite the support of the Senate and at least 2/3 of the House, an extension to net metering appears to be held captive by a deficiency of democracy in the State House. Specifically, House Ways and Means Committee Chair Brian Dempsey (D), House Chair of the Joint Committee on Telecommunications, Utilities and Energy Thomas Golden (D) and Speaker of the House Bob DeLeo (D) have been identified as the main stumbling blocks.

Behind this small group of powerful politicians is the Associated Industries of Massachusetts (AIM). This lobbying group includes utilities, and has been advocating for dismantling net metering through advertising and pressure on individual legislators.

In effect current net metering caps only impact installations above 25 kW, however this is a great threat to the state’s fast-growing community solar segment. Paul Spencer, founder and CEO of Clean Energy Collective told pv magazine that much of the projects which have been stalled are community solar, totaling “hundreds of megawatts”. “We’ve put hiring on hold,” stated Spencer.

Massachusetts has been the fourth-largest solar market in the United States for the past three years, and has the second-largest number of solar workers at over 15,000. However, the state may be in risk of losing both jobs and its leading position.

“The (federal) Investment Tax Credit is a foundation but if you want to get solar done in the states you need good state policy,” notes Solar Energy Industries Association (SEIA) State Director Sean Gallagher. “Massachusetts is going to have to get something done in order to maintain its leadership position.”

Read More:
http://www.pv-magazine.com/news/details/beitrag/massachusetts-solar-industry-steps-up-the-pressure-as-net-metering-caps-bite_100023925


Natural Gas and Oil Market Update

Arrow

Oil Prices Fluctuate on Oversupply Worries

The Wall Street Journal | March 24, 2016

Oil prices toggled between gains and losses Thursday as the market refocused on the world’s persistent oversupply of crude.

After wavering early in the trading session, the benchmark U.S. contract turned solidly negative, then rebounded, but was recently down 0.1% at $38.30 a barrel on the New York Mercantile Exchange in the early afternoon. The global Brent contract was up 0.3% at $40.15 a barrel on the ICE Futures Europe exchange.

Both contracts rallied more than 40% after touching multiyear lows in early February, but have started to give back gains last week as the rally hasn't been attended by much tandem evidence of an improvement in supply-and-demand conditions, in which the world’s crude glut is estimated by analysts to be growing at a rate of at least 1 million barrels a day.

  Arrow

Natural Gas Futures Turn Lower as U.S. Supplies Fall 25 Billion Cubic Feet

Market Watch | March 31, 2016

Natural gas futures turned lower on Thursday after the U.S. Energy Information Administration reported that supplies of the commodity fell by 25 billion cubic feet for the week ended March 25. Analysts polled by Platts forecast a decline of between 20 billion and 24 billion cubic feet. Some analysts, however, have said that the supply fall is likely to be the last one of the season. Total stocks now stand at 2.468 trillion cubic feet, up 1.002 trillion cubic feet from a year ago and 843 billion cubic feet above the five-year average, the government said. May natural gas was down 1.9 cents, or 1%, at $1.977 per million British thermal units. Prices traded $2.013 before the supply data.

EIA - Weekly Natural Gas Storage Report

EIA - Weekly Natural Gas Storage Report

Summary
Working gas in storage was 2,493 Bcf as of Friday, March 18, 2016, according to EIA estimates. This represents a net increase of 15 Bcf from the previous week. Stocks were 1,017 Bcf higher than last year at this time and 846 Bcf above the five-year average of 1,647 Bcf. At 2,493 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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