Aug 9, 2021 1:45:24 PM

Vice President of PJM, Ken Seiler stated that the five coastal states have proposed developing more than 20,000 MW of offshore wind, noting that 93% of the 190,000 MW in PJM’s interconnection queue reflects solar, wind, storage, or hybrid resources. All but two of the states in the PJM region have renewable portfolio goals. They vary from places such as Ohio, with a clean energy goal of 8.5% by 2026, to states like Virginia, which is shooting for 100% by 2045–2050. Seiler said, “We’ve basically quadrupled the number of requests and the number of MW being interconnected to our system.” He also expects that the industry will rely more on underground transmission, high voltage direct current (HVDC) systems, smart-valve solutions, carbon-core conductors, and other advanced technology.

According to the Texas Tribune, Texas Gov. Greg Abbott and other state leaders received millions in campaign contributions from energy companies after the state electrical grid collapsed in February during the winter storm. Abbott reportedly brought in $4.6 million from oil, gas, and energy industry leaders including a $1 million campaign donation from the co-founder of a pipeline company that benefited from the February winter failure of $2.4 billion. Lt. Gov. Dan Patrick brought in $1.3 million in total from energy interest groups in 2021, or just over a quarter of his total received contributions in 2021. Abbott signed two bills into law to weatherize local energy grids in June 2021, but they do not require energy companies to take action until 2022. Abbott did not include anything related to fixing the power grid on the agenda of his first special legislative session of 2021, which ends August 6.

Form Energy has developed an innovative low-cost 150-hour battery that can store energy over a multi-day period, removing issues of wind and variability of solar. According to the company, their first commercial product is a “rechargeable iron-air battery capable of delivering electricity for 100 hours at system costs competitive with conventional power plants and at less than 1/10th the cost of lithium-ion.” Form Energy president and chief operating officer Ted Wiley said, “We’ve completed the science, what’s left to do is scale up from lab-scale prototypes to grid-scale power plants. A 300MW “pilot” project for Minnesota-based Great River Energy will be commissioned in 2023 according to Wiley. Air battery is a new technology of about a decade, and other companies such as Zinc8 announced a zinc-air battery system providing 100-plus hours of storage and ESS has an iron-based battery. ESS and Form Energy are backed by billionaires such as Bill Gates and Jeff Bezos.

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General Market Update

  • The September 2021 NYMEX Henry Hub traded to $4.158/MMBtu, up to $0.12 (+3.0%) from the previous Wednesday. The price of the 12-month strip averaging September 2021 through August 2022 futures contract was up $0.10 (+2.7%) to $3.854/MMBtu.

  • Boston’s Algonquin Citygate price went up to $0.79 (+26.0%) to $3.83/MMBtu last Wednesday. Transco Zone 6 NYC price increased $0.63 (+20.2%) to $3.75/MMBtu. 

  • Pennsylvania’s Eastern Gas South rose $0.82 (+29.0%) to $3.65/MMBtu. Tennessee Zone 4 Marcellus spot price increased $0.89 (+32.7%) to $3.61/MMBtu.

  • SoCal Citygate price decreased $0.36 (-4.3%) to $7.95/MMBtu last Wednesday. The price at Northern California PG&E Citygate rose $.04 (+0.7%) to $5.59/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 $0.06552/kWh, in effect from September 1, 2021, to December 31, 2021.

  • Negative Headroom in the POTED – RSNH territory is now present in the shorter periods for contracts with 3 and 6-month terms.  Headroom of negative $0.03421/kWh is likely for the 3 month period and headroom of negative $0.04076/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 $0.11404/kWh, in effect from September 1, 2021, to December 31, 2021.

  • Headroom is available in the POTED – GSCS market for the shorter periods for contracts with 3 and 6-month terms.  Headroom of $0.02319/kWh is likely for the 3 month period and headroom of $0.02564/kWh is likely for the 6 month period; respectively.

Storage

  • For the week ending July 30th, 2021, the EIA reported net injections into storage of 13 Bcf, which is less than last year’s net injection of 32 Bcf this week last year and less than the 5-year (2016-2020) average net injections of 30 Bcf.
  • Working natural gas in storage totaled 2,727 Bcf, which is 542 Bcf (-16.6%) lower than last year’s working gas totals of 3,269 Bcf at the same time and 185 Bcf (-6.4%) lower than the 5-year average of 2,912 Bcf.  The total working gas is within the five-year historical range.


Supply/Demand

  • The average total supply of natural gas fell 0.2% week/week.  Dry natural gas production was higher by 0.1%, while net imports with Canada decreased by 5.5% compared with the previous week. 

  • Total US consumption of natural gas fell by 3.8% since last week.  Natural gas consumption for power generation decreased 7.3%, industrial sector consumption increased 2.6%, residential-commercial consumption decreased 2.0%, and exports to Mexico decreased 7.5% compared to last week.

  • US LNG exports increased week over week, with 21 vessels departing US ports for a combined 77 Bcf.

 

Weather

  • A hot weather pattern for most of the United States is forecast through the 8-14 window starting August 13th.  The middle of August 2021 brings a hot weather pattern as the entire United States, besides New Mexico, Texas, and Oklahoma, are forecast for above-normal temperatures. New Mexico, Texas, and Oklahoma are forecast for normal temperatures. 
  • The Pacific Northwest States and the Middle Atlantic States have the highest probability of much above normal temperatures.  Nowhere in the Continental United States is there a forecast for below normal temperatures.
  • In the 8-14 day window from August 13th through August 19th, the Pacific Northwest, Rocky Mountain States, Midwestern States, and Great Lakes States are forecast for below-normal precipitation. 
  • California, Texas, the Southern States, Florida, and the New England States are forecast for normal precipitation.  Southern Arizona and the Middle Atlantic States are forecast for above-normal precipitation probability.



 

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