Energy Insider Blog

What Triggered the January 6, 2014 Energy Emergency Event?

Topics: Heat Rate, REP, ERCOT, Acclaim Energy Advisors, energy management consulting, risk management, energy, Energy Solutions, energy procurement, weather outlook, energy regulations, energy reliability, energy savings, energy costs, Weekly Energy Insights, Event, energy management, energy management consultants, energy price spikes, Price Spike, Winter Weather, U.S. energy, Peak Demand, Emergency

Midwest and Northeast residents have not experienced an arctic blast of this magnitude in more than a decade. The system has moved eastward from Illinois through New England. The all-time record low in Chicago of -11˚F was recorded in 1994 and temperatures on January 6 are expected to be -6˚F, very close to such record. Not only is the storm dumping considerable amounts of snow (5” - 12”), but it is also bringing frigid, below normal temperatures with the coldest air so far this season. Temperatures are expected to be between 20˚F - 40˚F below average in large parts of the continental U.S. through next week. Moreover, sustained 15-50MPh winds are expected, so blizzard warnings have been issued in Cape Code and Long Island. An additional storm behind Hercules will keep temperatures well below normal through early next week.

Topics: energy sourcing, Acclaim Energy Advisors, energy management consulting, risk management, energy, Energy Solutions, energy procurement, weather outlook, reliable energy, energy regulations, energy reliability, energy savings, energy costs, power generation, Weekly Energy Insights, energy management consultants, Texas, dynamic load optimization 365, DLO 365, Winter Weather, U.S. energy, exports

A great deal has been made out of the need to shift away from coal fired power plants and toward renewable energy sources, such as wind and solar in the U.S. While this is certainly a laudable goal, the full impact of a move to renewable power generation has consequences beyond simply reducing emissions and finding alternative power sources. Specifically, determining how to effectively integrate these new power sources, particularly wind and solar, which are highly variable and can go from zero to full production almost instantaneously, pose significant challenges for grid operators.

Topics: system operators, coal, energy risk management, energy sourcing, Acclaim Energy Advisors, risk management, energy, energy procurement, demand response, energy regulations, energy reliability, energy savings, energy costs, power generation, Weekly Energy Insights, natural gas, economic demand response, energy management consultants, strategic energy sourcing, energy price spikes, renewable energy, energy supply, U.S. energy, load generators

Topics: Negawatt, ERCOT, energy risk management, Acclaim Energy Advisors, energy management consulting, energy, Energy Solutions, energy procurement, demand response, energy regulations, energy savings, energy costs, Weekly Energy Insights, energy management, dynamic load optimization 365, DLO 365, curtailment

Topics: ERCOT, energy risk management, Acclaim Energy Advisors, energy management consulting, energy, energy procurement, energy regulations, energy savings, reserve margin, PUCT, forecasting

The rise of fracking has shifted the U.S. natural gas market at fundamental levels that are not yet fully understood or appreciated. In fact, there is a strong argument to be made that as fracking and other recovery technologies continue to improve, the U.S. will become a major energy provider. By exporting copious amounts of liquefied natural gas (LNG), the U.S. will achieve greater energy independence by cutting back on imports of foreign crude oil products. A massive shift in the global energy markets is neither that far-fetched nor far off and will likely take place over the next decade. As discussed in greater detail below, natural gas has the potential to become a globally traded commodity like crude oil.

Topics: energy risk management, Acclaim Energy Advisors, energy, Energy Solutions, energy procurement, energy regulations, energy reliability, energy savings, Weekly Energy Insights, energy management, exports

For years, coal has been the dominant fuel source for power generation in the U.S.. However, recent changes in the market place, including tighter emissions restrictions imposed by the Environmental Protection Agency (EPA) and low natural gas prices from abundant shale gas suppliers, threaten coal’s dominance as the leading fuel source for generation. An analysis conducted by the Department of Energy (DOE) was published in August and predicted that between 35 and 60 gigawatts of coal-fired electricity generation in the eastern half of the country will be retired within the next five years. Therefore, new generation, transmission investments and reliability must run (RMR) contracts will be needed to maintain grid reliability. Natural gas fired generation will most likely fill the bulk of the gap left by the coal retirements. The impact of retirements and the higher operation costs of the remaining coal plants will trigger an increase in prices. This effect will be magnified in regions that are more dependent on coal fired generation, like the Midwest.

Topics: coal, energy risk management, Acclaim Energy Advisors, energy, Energy Solutions, energy procurement, energy regulations, Weekly Energy Insights, energy management, U.S. energy

The U.S. 2011/2012 winter was the fourth warmest on record. NE energy end users who were exposed to the spot market were rewarded with very low prices. Nevertheless, the U.S. 2012/2013  winter was significantly colder despite being the twentieth warmest winter on record. Despite a mild winter start, last January had a large number of days below freezing and February was the fifth snowiest on record. Consequently, natural gas and electricity end users in NE who were exposed to index prices, found themselves facing significantly higher energy costs on the spot market. During these two months, unusually cold temperatures triggered price spikes due to forced plant outages, which caused reliability problems within the grid. To circumvent these issues, the entity responsible for maintaining electric reliability, the New England Independent System Operator (ISO-NE),  was forced to dispatch higher cost power plants. The chart below shows historical monthly Real-Time prices across multiple Load Zones. Across these Load Zones, the average prices for the months of January 2013 and February 2013 were $83.54/MWh and $107.49/MWh. These prices were significantly higher than this period the previous year.

Topics: Acclaim Energy Advisors, energy management consulting, energy, weather outlook, Weekly Energy Insights, energy management consultants, Winter Weather, new england

Topics: energy risk management, Acclaim Energy Advisors, energy management consulting, energy, energy procurement, energy regulations, energy management

Legislation proposed in Michigan for 2012 would have increased the ability of customers to choose an alternative energy provider, enabling Michigan businesses to use strategies to manage energy risks  and remain competitive on a regional and national level.  Nevertheless, this legislation failed to make it out of committee, a sign that Michigan’s failed attempt at deregulation will continue to damage the competitiveness of businesses in the state.

Topics: energy risk management, energy, Energy Solutions, energy procurement, energy reliability