Oct 6, 2021 10:01:26 AM

BP earned in 2019, $650 million in profits and is selling a third of their majority stake to liquify fossil fuel and focus on renewable energy investments. Oil companies have been getting pressure from regulators to invest in cleaner energy and BP Chief Executive Bernard Looney stated that they can "make clean-energy transition much faster than its peers." To decrease BP output by 40% or 1 million barrels per day and increase electricity from renewable sources to 50 gigawatts, they will sell 13% of the company's assets. BP owns 50% of the firm Lightsource in December 2017 for $200 million, which operates solar farms in 15 countries. They also purchased 50% of Norwegian energy giant Equinor (EQNR.OL) in two projects off the U.S. East Coast for about $1 billion. 

PJM participated in Federal Energy Regulatory Commission technical conference, “Energy and Ancillary Service in the Evolving Electricity Sector,” on September 14th. According to Adam Keech, Vice President – Market Design & Economics, “There are no issues more fundamental to good market design than the ones we are talking about today, that we get the incentives in the real-time time frame correct, and we articulate the products clearly." Renewable resources account for nearly all resources that have applied to connect to the grid via PJM’s interconnection queue. PJM anticipates the power system shifting from one that has historically been predictable and controllable to one that is less so in the future. This rise in uncertainty must be met with flexibility to manage the grid reliably and cost-effectively,” Keech said in testimony submitted to FERC (PDF).

PJM added Marginal Emission Rates to the public information available on its Data Miner tool on September 9th. The emission rates data will correspond with the marginal unit or units representing the locational marginal price of energy according to the the Marginal Emission Rates Primer on the Data Miner page. “It’s important to understand that marginal units do not provide a prediction of what would happen. They only show what has just happened,” according to the primer notes. PJM stakeholders have identified potential uses for Marginal Emission Rates to determine the times each day when electricity use can have the least impact on the environment by drawing on lower-emitting resources.

shutterstock_65978851

 

General Market Update

  • The November 2021 NYMEX Henry Hub traded to $5.477/MMBtu, up $0.62 (+12.8%) from the previous Wednesday. The price of the 12-month strip averaging November 2021 through October 2022 futures contract was up $0.34 (+8.2%) to $4.507/MMBtu.
  • Boston’s Algonquin Citygate price went up $0.51 (+11.6%) to $4.90/MMBtu last Wednesday. Transco Zone 6 NYC price increased $0.47 (+11.1%) to $4.69/MMBtu. 
  • Pennsylvania’s Eastern Gas South rose $0.67 (+16.8%) to $4.65/MMBtu. Tennessee Zone 4 Marcellus spot price increased $0.58 (+14.4%) to $4.60/MMBtu.
  • SoCal Citygate price increased $0.70 (+11.0%) to $7.09/MMBtu last Wednesday. The price at Northern California PG&E Citygate rose $0.31 (+4.6%) to $7.03/MMBtu week over week.

Utility Highlight

  • The upcoming Price to Compare for First Energy Potomac Edison in Maryland, Residential No Electric Heat rate class (RSNH) is $0.06531/kWh, in effect from October 1, 2021 to December 31, 2021.
  • Negative Headroom in the POTED – RSNH territory is now present in the shorter periods for contract with 3 and 6 month term.  Headroom of negative $0.04834/kWh is likely for the 3 month period and headroom of negative $0.05593/kWh is likely for the 6 month period; respectively.

  • The current Price to Compare data for First Energy Potomac Edison in Maryland (POTED), General Service Commercial Small (GSCS) is $0.10678/kWh, in effect from October 1, 2021 to December 31, 2021.
  • Headroom is available in the POTED – GSCS market for the shorter periods for contract with 3 and 6 month term.  Headroom of $0.00428/kWh is likely for the 3 month period and headroom of $0.00217/kWh is likely for the 6 month period; respectively.

Storage

  • For the week ending September 24th, 2021, the EIA reported net injections into storage of 88 Bcf, which is more than last year’s net injection of 74 Bcf this week last year and more than the 5-year (2016-2020) average net injections of 72 Bcf.
  • Working natural gas in storage totaled 3,170 Bcf, which is 575 Bcf (-15.4%) lower than last year’s working gas totals of 3,745 Bcf at the same time and 213 Bcf (-6.3%) lower than the 5-year average of 3,383 Bcf.  Total working gas is within the five-year historical range.

Supply/Demand

  • Average total supply of natural gas rose 0.5% week/week.  Dry natural gas production decreased by 0.1%, while net imports with Canada increased by 12.2% compared with the previous week.
  • Total US consumption of natural gas fell by 5.7% since last week.  Natural gas consumption for power generation increased 3.4%, industrial sector consumption decreased 13.1%, residential-commercial consumption increased 5.0% week over week, and exports to Mexico decreased 2.5% compared to last week.
  • US LNG exports decreased week over week, with 17 vessels departing US ports for a combined 63 Bcf.

Weather

  • An above normal weather pattern for the United States, besides the West Coast, is forecast to extend through October in the 8-14 day outlook starting October 7th
  • The middle of October 2021 brings an above normal weather pattern for much of the USA, as the entire United States, besides the Pacific Coast States and Rocky Mountain States are forecast for above normal temperatures. 
  • The Pacific Coast States are forecast for below normal temperatures.  The Rocky Mountain States are forecast for normal temperatures.  The Great Lakes States have the highest probability for much above normal temperatures.
  • In the 8-14 day window from October 7th through October 13th, the Pacific Coast States, Rocky Mountain States, and coastal Southern States are forecast for above normal precipitation. 
  • The Midwestern States, Texas, New York State and New England States are forecast for below normal precipitation.  There are a few sporadic bands of normal precipitation probability forecast across the United States, including Southern Florida.

Questions or Comments?

Let TRUELight provide insightful market data and pricing expertise. 

Contact Us

Article Topics:
#marketupdate