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In This Issue

Low Natural Gas Prices Meant Low Electricity Prices in New England in 2016, Grid Operator Says

NatGas/Renewables in 2016 Drove Largest Electric Generating Capacity Increase in Years

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


Low Natural Gas Prices Meant Low Electricity Prices in New England in 2016, Grid Operator Says

MassLive | March 2, 2017

Wholesale electricity prices in New England during 2016 were the lowest in 13 years, ISO New England, the operator of the region's electricity grid, said Monday.

The 2016 average prices were $28.94 per megawatt hour. The previous record low since the electricity market in 2003 took its current structure (power companies do not own their own power generation) was $36.09 a megawatt hour in 2012, according to ISO New England.

Mild winters and lower energy demand due to more efficient homes and businesses are also keeping prices low, ISO New England said. Preliminary figures indicate demand for electricity fell in New England in 2016, dropping 2.1 percent  to about 124,323 gigawatt-hours.

Mild winters also mean less natural gas is being used for home heating, which relieves capacity problems on pipelines headed into New England.

"When New England's natural gas power plants can access low-cost fuel, wholesale power prices tend to remain low," Gordon van Welie, president and CEO of ISO New England, said in a press release. "By comparison, extremely cold temperatures three winters ago resulted in pipeline constraints and caused natural gas--and wholesale electricity--prices to hit record highs. January and February 2014 still stand as the two highest-priced months for wholesale power in New England."

Utility customers are unlikely to see much of the savings in their monthly power bills, said Dan Dolan, president of the New England Power Generators Association, in reaction to ISO New England's news. He pointed out that the wholesale cost of power is the price as it leaves the plant. Utilities add in the cost of transmission networks and the cost of energy-efficiency and green and renewable energy programs.

In the last 10 years, energy supply costs are down more than 25 percent, but the final bills are up more than 15 percent because of the cost of transmission and of renewable and efficiency programs.

Transmission costs alone are up five-fold in the last decade, Dolan said.

The Massachusetts utility rate system allows utilities to only pass the wholesale cost of power on -- they don't make money there. But the system does let utilities make money on transmission fees with state approval. So utilities have invested in their transmission  systems.

"I worry that we have a gold-plated system," Dolan said. "But we are getting exactly what we asked for. This is the way the utility system is designed."

ISO New England said the end of congestion in New England's grid, such as with the Springfield Reliability project, which added infrastructure improvements along a 39-mile right of way from Ludlow to Bloomfield, Connecticut, helps keep prices low because it allows utilities to access the cheapest power without constraint.

The total value of New England's wholesale electric energy market in 2016 was $4.1 billion, $1.1 billion less than the $5.2 billion value for wholesale electricity in 2012, the previous year with the lowest market value, ISO New England said.

The average wholesale price of electricity at $28.94 per megawatt hour was down 29.4 percent from the $41 per megawatt hour recorded in 2015 and 40.4 percent down from $52.13 a megawatt hour in 2004.

The decrease was driven mostly by the falling price of the natural gas used to generate most electricity in New England. The average price of natural gas was down 33.4 percent from 2015 to 2016 and is down 21.8 percent from 2004, according to ISO New England.

U.S. natural gas prices are at their lowest point since 1999, according to the federal Energy Information Administration. The previous record low since 1999 had been 2015.

Read More:
http://www.masslive.com/business-news/index.ssf/2017/02/low_natural_gas_prices_meant_low_electri.html

NatGas/Renewables in 2016 Drove Largest Electric Generating Capacity Increase in Years

Natural Gas Intelligence (NGI) | March 2, 2017

Driven by natural gas and renewables, the U.S. power grid added more than 27 GW of electricity generating capacity last year, the largest amount added since 2012, the Energy Information Administration (EIA) said Monday in a Today in Energy note.

EIA said the additions more than offset the retirement of about 12 GW of capacity, which resulted in a net gain of nearly 15 GW. The net additions followed a 4 GW net capacity decrease in 2015 -- the largest net drop ever recorded in the country.

Over the last 15 years, natural gas made up most additions, accounting for nearly 228 GW, but 2016 was another year that saw renewables gain ground. Wind and Solar have made up an increasingly larger share of capacity additions in recent years. Wind added 8.7 GW last year, while solar added 7.7 GW. Natural gas added 9 GW.

The EIA said large amounts of new utility-scale wind capacity started entering the market in 2007 and have averaged 7 GW/year since "despite occasional lapses in available tax credits." Other than 2014, utility-scale solar additions have increased in each year since 2008. The 7.7 GW of solar capacity additions in 2016 set a record. Not included in that total was the 3.4 GW of solar rooftop systems installed in 2016.

Since 2002, the power industry has retired more than 53 GW of coal capacity. About 20 GW of new coal capacity has been added in the past 15 years, while annual coal additions have been less than 1 GW in each of the last four years. About 54 GW of natural gas-fired capacity has retired since 2002 as well, the units were primarily older steam turbines and small gas turbines, EIA said.

There are dozens of new gas-fired plants under development or construction in Texas and the Mid-Atlantic -- including Ohio and Pennsylvania. A rush is on to build more gas-fired power generation in the PJM Interconnection market in particular. One of the greatest pushes is underway in the Appalachian Basin, where cheap shale gas has prompted developers to pursue more gas-fired additions and replace aging plants.

A recent NGI special report, "Pipelines & Power: How New Infrastructure Could Uncork the Marcellus-Utica Bottleneck," explores the trend and includes insights and more data about what increasing gas-fired electricity could mean for demand going forward. 

The EIA said last month that if all the new gas-fired plants planned for this year and next come online, gas-fired generating capacity could reach its highest level since 2005. EIA said the power sector plans to increase gas-fired generating capacity across the country by 11.2 GW in 2017 and by 25.4 GW in 2018. Even if gas prices rise moderately during that time, the planned additions could help gas maintain its status as the nation's primary source of electricity.

The EIA noted Monday that as more plants are retired and new ones come online, the ages of the country's generating fleet will vary. Most operational coal plants, for example, were built before 1980 and a large portion of hydroelectric facilities are even older (the oldest operating was built in 1891). Most of the gas-fired fleet and nearly all of the nation's wind and solar capacity has been built since 2000. 

Read More:
http://www.naturalgasintel.com/articles/109555-natgasrenewables-in-2016-drove-largest-electric-generating-capacity-increase-in-years

 

Natural Gas and Oil Market Update

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Natural Gas Price Dips Following Unusual Winter Inventory Increase

Yahoo! Finance | March 2, 2017

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 7 billion cubic feet for the week ending February 24. Analysts were expecting a storage decline of just 5 billion cubic feet.

The five-year average for the week is a withdrawal of around 132 billion cubic feet, and last year’s storage decline for the week totaled 48 billion cubic feet. Natural gas inventories fell by 89 billion cubic feet in the week ending February 17.

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Oil Down On Record U.S. Crude Stocks, Flat Russian Output

Yahoo! Finance | February 2, 2017

Oil prices fell on Thursday after U.S. crude stocks hit an all-time high and official data showed Russian oil production unchanged in February, with no further cuts to tighten the market and drain global oversupply.

Benchmark Brent crude oil was down 75 cents a barrel at $55.61 by 1310 GMT. U.S. light crude was 75 cents lower at $53.08. Crude inventories in the United States, the world’s biggest oil consumer, rose by 1.5 million barrels last week to a record 520.2 million barrels, official figures showed.

EIA - Weekly Natural Gas Storage Report

EIA - Weekly Natural Gas Storage Report

Summary
Working gas in storage was 2,356 Bcf as of Friday, February 17, 2017, according to EIA estimates. This represents a net decrease of 89 Bcf from the previous week. Stocks were 261 Bcf less than last year at this time and 156 Bcf above the five-year average of 2,200 Bcf. At 2,356 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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