banner_img.jpg

Energy Insider Blog

Power Prices: It's The Demand And Not Just The Usage

Posted by Richard Zdunkewicz on Jul 1, 2016 11:04:45 AM

It’s always an interesting discussion with non-technical people involved in contracting for power supply. Energy contracting is oftentimes the responsibility of personnel who are not familiar with the price dynamics of the power markets.  The conversation will typically start with “we use a lot of electricity…..we should see a great price”.  While that may be true, it’s not necessarily the magnitude of usage that drives the price, but the consistency and level of demand.  What’s the difference between demand and usage?  Power demand is the amount being drawn from the grid at any point in time; usage is the aggregate of demand across time.  A consistent or flat demand profile, meaning a higher load factor, will command a better price than that associated with a low load factor.  So why is that?

Read More

Topics: Peak Demand, power, power usage, demand, energy efficiency, energy management

Oil & Gas Industry's Challenges And Potential Impact On Power Supply Agreements

Posted by Richard Zdunkewicz on Jun 1, 2016 5:06:15 PM

Even as crude oil and natural gas prices begin to rebound from their recent lows, we are seeing continued financial stress in the oil & gas sector. In recent months, Linn Energy, Chaparral Energy, Penn Virginia, Halcón Resources, and Breitburn Energy Partners have all filed Chapter 11.  Financial concerns are not confined to the Upstream segment as Midstream players such as Plains All America Pipeline and Azure Midstream have seen their bonds downgraded by the rating agencies.

Read More

Topics: energy management, energy blog, NG

Natural Gas Supply Shortage Concerns Have Eased

Posted by Jennifer Chang on Dec 23, 2014 10:54:00 AM

Massive contrast between colder than normal temperatures in Nov-2014 and above normal temperatures in Dec-2014 have caused very high price volatility in the Natural Gas futures market. Shifts in weather forecasts and record production have been the main price action drivers during the first half of the winter.

Read More

Topics: Weekly Energy Insights, Acclaim Energy Advisors, energy procurement, energy management consulting, risk management, energy procurement, energy regulations, weather outlook, reliable energy, demand response, energy management, energy supply, energy savings, energy management consultants, strategic energy sourcing, Winter Weather, reserve margin, power generation, energy price spikes, system operators, Price Spike, energy blog, power outages, natural gas, Natural Gas Supply, demand, scarcity pricing, current outlook, NG Demand

2014-2015 Winter Weather, What to Expect?

Posted by Alberto Rios on Oct 9, 2014 11:59:00 AM

During the fall, meteorologists sharpen their assumption to build their probability weighted winter weather forecast scenarios. From an energy perspective, this is also a critical time of the year. Since it is typically a period of low energy demand, there tend to be seasonal dips that provide good buying opportunities in natural and electricity. This year though, natural gas prices have been seesawing since mid-July 2014 due to the following reasons:

Read More

Topics: Weekly Energy Insights, natural gas, Acclaim Energy Advisors, Event, energy procurement, energy management consulting, weather outlook, energy risk management, energy, energy, energy procurement, weather outlook, reliable energy, energy management, energy supply, energy management consultants, energy sourcing, strategic energy sourcing, EIA, Texas, Winter Weather, U.S. energy, reserve margin, forecasting, energy costs, power generation, Price Spike, energy blog, power outages, refueling season, natural gas, Natural Gas Supply, Polar Vortex, NG, NG contract, price volatility, reserve, report, Texas Energy, energy storage, NG Demand, seasonal drought, forward curve, winter strip, spot price, Heating Season\

Weather Effect on Regional Natural Gas Spot Prices

Posted by Jennifer Chang on Aug 29, 2014 11:08:00 AM

Multiple supply and demand factors affect seasonal natural gas and electricity spot [1]prices across the country:

Read More

Topics: Weekly Energy Insights, Acclaim Energy Advisors, weather outlook, risk management, energy, energy reliability, energy procurement, energy regulations, demand response, energy management, energy savings, energy sourcing, new england, Winter Weather, reserve margin, energy price spikes, Heat Rate, Price Spike, energy blog, natural gas, Natural Gas Supply, Polar Vortex, NG, price volatility, NG Demand, forward curve, winter strip, black swan event, pipeline capacity, spot price, Heating Season\

5 Things to Monitor for the Balance of 2014

Posted by Jennifer Chang on Jul 28, 2014 10:20:00 AM

A brutal cold start of the year has been followed by moderate temperatures across the country. Natural gas prices have risen significantly since early January 2014, as inventories were being depleted at a faster than normal rate due to higher than normal heating demand. Nevertheless, record production and tepid demand after the spring months triggered a massive selloff in mid-June 2014, with the front month losing more than 20 percent to date. Early concerns of tight supply conditions ahead of the next heating season have eased due to weekly record or near-record injections. Electricity prices have also plunged not only because of the recent drop in natural gas prices, but also because of a drop in heat rates. In Texas, peak load had not been this low in June and July since 2010. Low electricity demand has depressed spot and forward heat rates.

Read More

Topics: Weekly Energy Insights, natural gas, Acclaim Energy Advisors, Event, energy procurement, weather outlook, risk management, energy risk management, energy reliability, energy procurement, economic demand response, reliable energy, demand response, energy management, energy management consultants, energy sourcing, strategic energy sourcing, Hurricane Season, reserve margin, power generation, energy price spikes, renewable energy, Price Spike, energy blog, power outages, Natural Gas Supply, price volatility, reserve, report, energy efficiency, mild weather, energy storage, NG Demand, seasonal drought

Natural Gas Supply Outpacing Demand

Posted by Jennifer Chang on Jul 11, 2014 12:39:00 PM

Natural gas inventories have recovered significantly after reaching an 11-year record low of 822Bcf in late March-2014. During the last nine weeks, natural gas injections into storage have outperformed historical levels, and eight of them exceeded 100Bcf/week. Moreover, the last nine injections have exceeded the five-year average gains by 24Bcf on average. The drivers behind these above normal injections are the following:

Read More

Topics: Weekly Energy Insights, natural gas, Acclaim Energy Advisors, Energy Solutions, energy management consulting, risk management, energy, energy reliability, energy procurement, energy regulations, weather outlook, reliable energy, demand response, energy management, energy supply, energy savings, energy sourcing, Texas, forecasting, load generators, Price Spike, Peak Demand, energy blog, power outages, Natural Gas Supply, price volatility, Texas Energy, mild weather, tropical storm, hurricane

Energy Future Holdings-Is a Bankruptcy Filing Looming?

Posted by Jennifer Chang on Feb 28, 2014 12:48:00 PM

On October 10, 2007, the largest leveraged buy-out in American history was completed by Kohlberg Kravis Roberts, Texas Pacific Group and Goldman Sachs Capital Partners. Energy Future Holdings (EFH), executed a merger agreement to acquire all the shares of the publicly traded TXU Corp for $45 billion (32 billion plus $13billion in assumed debt). All parties agreed to the deal in February 2007, and in September 2007, TXU shareholders had approved the takeover. EFH ended up with a portfolio of competitive and regulated energy companies:

Read More

Topics: Weekly Energy Insights, DLO 365, Acclaim Energy Advisors, Energy Solutions, energy management consulting, ERCOT, energy, energy reliability, energy procurement, demand response, energy management, energy sourcing, U.S. energy, energy costs, curtailment, energy blog, NYMEX, TXU, bankruptcy, Energy Future Holdings, TXU Energy

Crude Oil and Natural Gas Top Commodity Performers in 2013: Natural Gas Price Action Recap

Posted by Jennifer Chang on Feb 14, 2014 8:43:00 AM

During this winter season, natural gas price volatility has been extreme as temperatures have fallen to unprecedented levels due to the breakdown of the polar vortex. Low temperature records were broken across the U.S., natural gas heating-related demand has risen and natural gas inventories have been depleted at a faster rate when compared to historical benchmarks.  Nevertheless, natural gas has not been the most volatile commodity in recent years according to the U.S. Global Investors Periodic table of Commodities Returns. In the last 10 years, the most and the least volatile commodity returns have been registered in Nickel and Gold respectively. Crude Oil has been a top three performer in four of the last 10 years, while natural gas has only been in this category two out of the last 10 years.   

Read More

Topics: Weekly Energy Insights, Acclaim Energy Advisors, Event, demand response, weather outlook, energy risk management, energy reliability, energy procurement, energy regulations, reliable energy, energy management, energy savings, energy management consultants, energy sourcing, Winter Weather, energy costs, curtailment, power generation, energy price spikes, Price Spike, Emergency, energy blog, power outages, natural gas, Natural Gas Supply, Polar Vortex, NG contract, price volatility

Highest NYMEX Natural Gas Expiration in Four Years: Tough Risk Management Lesson for Some

Posted by Jennifer Chang on Jan 31, 2014 5:16:00 PM

On January 2, 2014, the NYMEX Henry Hub NG February-2014 (front month) contract settled at $4.321/MMBtu, and on January 29, 2014, the contract expired at $5.557/MMBtu (see chart below). This was the highest expiration settlement price for the front month in four years. During the month of January, the front month contract rose $1.24/MMBtu, or 28.6%. The chart below shows that on expiration day (1/29/14) the front month price posted a $0.52/MMBtu or 10% gain for the day. The March 2014 contract followed suit and rallied almost 11%, settling at $5.465/MMBtu. During the expiration day, weather forecasts turned colder than previously expected, so market players that underestimated demand rushed to the market and were clobbered in a short squeeze.

Read More

Topics: Weekly Energy Insights, natural gas, Acclaim Energy Advisors, Energy Solutions, demand response, energy risk management, energy, energy reliability, energy procurement, energy regulations, reliable energy, energy management, energy supply, energy savings, energy management consultants, energy sourcing, U.S. energy, energy costs, curtailment, power generation, energy price spikes, Price Spike, Emergency, energy blog, Natural Gas Supply, NG, gas gross production report, price direction, NG contract, NYMEX, price volatility

   

Subscribe to Email Updates

Want More Industry News?

Visit the Acclaim Energy "Industry News" page to stay-up-to-date on the latest news and events happening within the energy industry. 

Industry News

MOST POPULAR POSTS

Posts by Topic

see all

CONNECT WITH ACCLAIM