Western Price Survey
September 9, 2016
California power generation is benefiting from a combination of improved water-supply conditions and new renewables capacity, according to the latest Short-Term Energy Outlook from the U.S. Energy Information Administration.
In June, July and August, CAISO electricity generation from hydropower increased 3.2 TWh compared with last summer, and other renewables increased by 2.3 TWh.
“Partially offsetting this summer-over-summer increase in renewables is a 5.8 TWh decline in thermal generation, almost all of which is fueled by natural gas,” EIA stated. Renewables, hydro and electricity imports made up the difference. Increasing solar capacity “has reduced the need for summer thermal generation” in the CAISO area, EIA added.
Non-hydro renewables accounted for 26 percent of CAISO capacity in June, with solar increasing by 27 percent from last June.
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Western energy prices this week seemed mostly inert. Markets were closed Sept. 5 for Labor Day, and prices didn’t move much after that. For average peak power, California-Oregon Border added 15 cents to reach $29.55/MWh by the end of trading Sept. 9. South of Path 15 posted the greatest loss, down $1.10 to $32.15/MWh in Sept. 2 to Sept. 9 trading.
Average nighttime power prices gained between $2.05 and $3.10 during the trading period. COB saw the greatest gains, up $3.10 to $27.75/MWh.
Working natural gas in storage was 3,437 Bcf as of Sept. 2, according to EIA estimates. This is a net increase of 36 Bcf compared to the previous week. Storage levels are now 6 percent greater than a year ago.
Henry Hub gas spot values dropped 8 cents in Thursday-to-Thursday trading, ending at $2.84/MMBtu Sept. 8.
Western natural gas prices generally shed between 6 and 12 cents, with Southern California Border down 12 cents to $2.69/MMBtu. Alberta was unchanged at $1.79/MMBtu.
Demand peaked on the CAISO grid at 36,677 MW Sept. 7, which should be the high for the week [Linda Dailey Paulson].
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