Curtailing Anything but the Heat

In a busy episode, Abby and Tim break down a host of new records in the West, April curtailment trends, Tim’s trip to the PJM Meeting in Baltimore, the launch of the CHPE, and a round of heat in the East next week.

Transcript

SPEAKER_01 0:00

And welcome back to Status Shack, Great Status' podcast, taking a look at the wild world of North American wholesale electricity markets. This is Tim Ennis joined by Abby Listina. Abby, how how was the the weddings this weekend? Have a good have a good time?

SPEAKER_00 0:14

Had a good time, had a good time. Um yeah, nothing nothing crazy happened, but um I I hear you're back in Boston, Tim. And it seems like you missed it so much that you're doing a quintessential Boston activity and walking the harbor. Is that true?

SPEAKER_01 0:31

You know, I I I wouldn't call it quintessential. Uh we'll get into it, but I was down in Baltimore this week for the P Jam uh members' conference. And you know, I just miss Boston so much that uh my friend and I are planning on walking the entire harbor walk. So from East Boston through Chelsea, Charlestown, all of the city, all the piers, through South E, Dot, and then uh yeah, and near Milton. So we'll see how that goes. Uh I will future cast and say uh regardless of what actually ends up happening, I will be finishing it all. And you know, and there's no way to prove that I didn't. But it's been a been a you know busy week uh in PGM and we'll we'll get to that. But how have things been shaping up out west, Abby?

SPEAKER_00 1:11

Yeah, out west, it's been good. Basically anything west of the Mississippi has seen some uh renewable records this week, which has been exciting. So California, ERCOT, SPP, and MISO all hit a solar record this week, which um, yeah, it's like basically solar records week. And then this morning we saw California hit another wind record as another portion of Sun Zia came online. So, you know, Sun Zia, the largest entre renewable project in North America, is coming online in stages. And uh last night looks like they powered up another 500 megawatts of those wind turbines and started flowing into California. The frequency of these wind records almost makes it feel, you know, like you're fatigued from it, but it's quite impressive. These are big jumps. This is a lot of generation coming online in a short amount of time, which is great to see considering Sun Zia's 220-year timeline that we've had from them. So it's uh it's really cool to see. We have about, I think, another gigawatt to come online into just Kaiso itself, if my math is correct. So this won't be the last jump. We might see two more this spring and into summer. So very exciting for California. But yeah, lots of renewable records. So, particularly Kaiso and ERCOT had solar records kind of back to back. Kaiso on Monday, ERCOT on Wednesday, driven by a couple things, high uh temperatures in the middle of the day. So high load. So solar had somewhere to go. You know, we've seen pretty significant wit uh solar curtailments both in California and ERCOT this spring, just because there's all this solar on the grid. Load is low during the midday when solar is online. So the grid can't accommodate all the solar transmission lines get strapped. So high temperatures really helped that solar penetration kind of come to fruition onto the grid. And then high temperatures also facilitated low wind. So solar wasn't competing against wind. That's particularly important in Urcot. You know, we see if there's high wind, high solar, solar kind of gets curtailed first. It's fun to see that kind of stuff, um, especially since it was just like back to back to back. Every single day it felt like a new grid was hitting our solar record. So that was super fun. And then subsequently, both in California and ERCHOT, we saw battery discharge reach their second highest ever value. So high solar, plentiful generation for charging these batteries. But then when solar falls off into the evening, we really need that battery support, right? Again, light winds during these days. So dispatchable generation really had to ramp up as solar fell off. And so we saw pretty high battery discharge both in California and ERCOT, which was really fun to see. And you know, something that really differentiates these two grids, you know, if you look at like their max values, I think it's like a two gigawatt max discharge difference between California and ERCOT. California has much longer duration batteries, four hours in California versus like the two-hour typical duration of the ERCOT batteries. So California, even though they look like their peaks are pretty close, has just significantly higher battery penetration, which is especially helpful as the evening kind of like trails on in California. So really just like a fun week for records. Records are always just fun to see, but you know, it's fun to see projects get charged up online, everything to come into fruition there. So that's been fun. I kind of like briefly mentioned this. You know, we had like Kaiso April curtailments have been quite significant this year. And we've been looking at them um year over year, and the jump from 2025 to 2026 in the month of April is actually staggering. So something to watch, something to like keep in mind that prices have remained steady in April, year over year. So, you know, it's not a price driver. You know, congestion is certainly a factor, but really quite interesting and something we're gonna be continuing to look into here at grid status. And then, yeah, the last thing that's happened in the West, we saw the nukes come back. Palo Verde Unit 2 is back online. Colombia had a D-rate and is back online. So excited to see the nuclear fleet back online in the West. We only have three, three units: Colombia, Palo Verde, and Diablo Canyon, and they're all up and running for the peaking summer season, which is great because the West certainly needs some baseline generation, given some of the concerns that I have about hydrogeneration as we uh go later into the summer. But you've had, I think, a fun week out in P Jam land, Tim.

SPEAKER_01 5:54

Yeah. Kind of, like you said, literally in the heart of P Jam down in Baltimore. So I was at the P Jam members conference Sunday into Wednesday. And yeah, it was uh a cool opportunity to be around a bunch of people who actually know what the three letters of P Jam mean and maybe didn't just learn that this year. It was always cool to, you know, see Brandon Schwars with my own two eyes. It was a nice chance to, you know, connect with people in the space and just hear about the challenges that the RTO is facing. I think between the speakers that we heard from the governor of Maryland, uh, the chair of FERC, that there are some really big challenges that PGM's facing. And I think to their credit, PGAM is starting to realize that. But at a certain point, it doesn't really matter how quickly you realize that, it's how quickly you can act on those problems. And you know, I think that's gonna be what remains to be seen of how quickly does the stakeholder process go through to address the long-term issues that we've seen with the lack of new generation coming online. We have had a frozen interconnection queue uh for years in in PJM. And uh it's really come come to fruition with the just a lack of new capacity coming online. Well, you've had just a lot of of new data center load, you've seen this capacity market prices spike, and yeah, it's put PJM between a rock and a hard place. And I think to be frank, it it's gonna be a tough couple of years for the RTO. It's an opportunity though for some change that I think it's sort of a mindset change of there are these challenges and we have to realize what the opportunities fix them are. Well be uh be a certainly a time to to watch PJM and uh FERC is having a meeting uh within uh July uh to kind of go over some of the government structures. So we'll be uh we'll be keeping an eye on what comes from from that. I think on a on maybe a lighter note, uh was a lot of changes in PJM this week, but also just in the wider Northeast. So we've been talking about some of the flows starting on CHPE. And it does look like CHP uh completed its testing ahead of the summer. So this put them in line to be rated by NISO to bring this capacity online. They met their milestone to bring it online before August. So if they didn't reach the these certain milestones that came from NISO, they wouldn't be able to bring this capacity online by June 1st. They would actually bring it at the end of the summer, which, as we've seen from some of the reliability assessments from NISO, would lead to some potential shortfalls in zone J as early as the summer in an extended heat wave. So again, bringing that capacity online is gonna help to firm up the New York City metro area. Remains to be seen. We've been keeping an eye on these flows and the impact on the Astoria gas plant, but also some of the congestion in the area. You know, remains to be seen fully once the contracts are in place and those flows are consistent. Do we continue to see some of this negative pricing at the Astoria Combined Cycle Plant as well as CHPE, the tie itself? Outside of that, you know, we have seen a drop in phase two flows. Over the past couple months, and you've actually seen it just in the megawatt-hour volumes between ISO New England and Hydro Quebec, that even with the New England Clean Energy Connect coming online at the beginning of the year, the flows from Quebec have actually been lower this year, in part due to the fact that Highgate was offline for most of the spring. And New England was a large, largely an exporter to Hydro Quebec via the phase two line. So you'd be flowing 1200 megawatts or more like 1100 megawatts on any CEC, but you'd also be exporting 900 megawatts on phase two. So you basically just net out a couple hundred megawatts through most of the day. We have seen those phase two flows drop off. That's kind of taken some pressure off the New England supply sack at the same time as we're nearing the full nuclear fleet back back in action. Millstone started ramping back up on Thursday, the 14th. It was pretty, pretty, you know, uh limited during the morning. By the mid-afternoon, Wakely started to ramp back up. Should have Millstone back on in full capacity over the weekend, uh, which should continue to keep some some uh you know bearish pressure on the supply stack. One other kind of interesting note here in New England is that also on the 14th, there was a change made to the ISO New England published fuel mix chart. Starting on Tuesday, ISO New England finally added battery storage to its fuel mix. One interesting note here is that they were already representing battery storage in its fuel mix, but it was under the other category. So the other category just looked like a telltale battery storage fuel mix. It would be limited during the quieter hours and you'd have these spikes over the peaks. And then you also have some price spikes when we would get demand over performance and you would suddenly see $200 pricing and other fuel mix spike up. So it was very clear that that was battery storage, but this just puts a hundred percent, you know, almost guarantee here that the day uh the battery storage fuel category uh came to being, other storage basically fell off a cliff. So, or other fuel uh kind of fell off a cliff there. So I think that's uh a thing worth uh worth noting here that we still see close to 500 megawatts of battery storage participating in in a small market like ISA, New England, that has routinely seen a decent size percentage of the fuel mix coming from from battery storage. And then to finish off there, did want to you know talk about some of the volatility we've been seeing in PGM again, still kind of continuing to struggle here. Outages remain high, and we have been seeing uh some volatility down in Virginia, a lot of the Ladysmith circuit breaker congestion that we talked about last week with some of the drivers on the Elmont 500 network. And then we did see, you know, some potential added impacts from some outages in the northern Virginia. Uh again, it's an interesting one where it's definitely solar driven, where you kind of see it pick up during the daytime. And then things flip where Dominion starts to get that upwards price pressure during the evening as the solar kind of south of Data Center Alley starts to fall off. So it's definitely something we're gonna be keeping an eye out for uh next week. And as I as I could confirm, there was generation coming out of Brandon Shore. So it wasn't just say a weak BGE supply sack kind of contributing to that, albeit the BGE supply stack is pretty weak, as uh we've been seeing from some of my posts about state level flows in PJN. Uh, but definitely been a little bit of a busy week. Abby, what are you kind of keeping an eye out for next week?

SPEAKER_00 12:40

Yeah, you know, I started to look at um just like how oil prices might shape up, um, impacting power pricing this summer. You know, if you have a petrol car, you're definitely feeling it at the gas pump. Oil prices are elevated um in the last couple of months. And um I think everyone's hurting when they're they're filling up their gas tank just compared to how prices looked at the beginning of this year. And while we might not consider it, oil is still a part of our grid. So, you know, it's not in every ISO, but we do see it, you know, New England, especially. ISO has dual fuel units, SPP has oil that comes online um when the grid's constrained. So we still see oil online, and um that will have price implications. While it might not be running continuously and might not be a part of like the daily price implications as temperatures rise, as we get into summer, as resources get constrained, we will start to see oil peaking units come online. It's definitely gonna add a bullish price risk to these ISOs that still have these oil peaking units, particularly when the grid's constrained and we can expect elevated pricing because of it. Even if things go back to normal uh tomorrow, that oil will stay constrained for at least through the summer. Something we don't think about, something we don't talk about oil a lot. I know, like we did during winter storm firm, you know, you kind of expect it more in the winter, but you know, most of these grids are still summer peaking grids. And so when we max out generation, um, and it includes these more expensive peaking units that are already quite expensive to run. And when you are increasing their fuel costs, maybe doubling them, uh, you really will see that um in power pricing. Expect some bullish risks, um, particularly during like the evening peak periods. Um, and then yeah, MISO published their like summer readiness report as well as like their summer capacity prices. So their summer capacity prices went down year over year, and um, you know, that I think is a point of contention um for PJM lovers, Tim. But that was interesting to see, you know, MISO's definitely seen a lot more solar come online. Again, they hit a solar record this week. We kind of talked about it on grid status last week where MISO just like leapfrogged PJM in solar editions and bounds from 2023. So we're really seeing that benefit into capacity prices heading into this summer in 2026. You know, MISO's still limited on battery. Batteries are part of their fuel mix. We saw that come online this year as well in MISO. Uh, but we have about a gigawatt um for this grid, which is not that much. Batteries are still lagging behind that kind of help like maximize that solar penetration during the midday. Solar is actually harder for them to forecast and bake in than wind. Wind is very concentrated in Myso, into Iowa is where the majority of wind farms are seen. And like we can see that on our price map. When wind is really blowing, we see just an ocean of blue in Iowa, and those negative pricing is driven by the concentration of wind farms in that region. But solar is much more spread out. Certain states do have like better solar incentives, but it's a big footprint across the nation. MISO is so solar is just more spread out. It's harder to predict, you know, cloud cover is harder to kind of predict. You know, wind has more predictability than solar does, um, at least for the MISO grid, which is surprising. Just I look at California and we assume sunny skies, unless there's a storm front coming through, and then we can see solar suppression. So it'll be interesting to see how with MISO's newfound solar growth, difficulties and predictability, how that grid kind of manages it. So we could see some volatility during the midday, surprisingly, given the high solar penetration, which is not something maybe I would expect fundamentally. So I'm kind of excited to like get into summer and see how that kind of plays out for that grid. So nothing crazy. Still looking at E DAM. We we launched a part three of our Western expansion blog today, uh, talking about and certain trends that we've seen. Right now, uh, the number of days of E DAM is 15. Um, and the law of small numbers is 33. So still watching for patterns and uh keeping a close eye on that market, uh, which again has been so fun. It's hard for me not to just talk about the new markets that are online just because they are so interesting and it doesn't happen every day. So that's what's going on in my life and in my markets, Tim. What about for you?

SPEAKER_01 17:29

Yeah, no, you raise a good point on oil, Abby. That's uh it will definitely be a big thing up here in the Northeast this summer. Just yeah, it's in the winter we use it because we can't get gas. And in the winter we use it because or it's the summer we use it because you gotta keep the lights on and and meet demand. So it will definitely be something to kind of see how oil responds. And this will be the first summer with uh some more uh you know, hopefully some more firm imports from Quebec via the NECC and CHPE. So yeah, we'll see how much oil actually ends up getting dispatched compared to compared to last year with uh with some of this new supply online. Yeah, I think the main story for this uh week coming up is just the the return of some heat into uh the east coast. So we're gonna start to see uh temperatures pick up, kind of MISO and PJM over the weekend. Again, kind of seeing temps push back up into the 80s and 90s. And the main story really picks up on Monday and Tuesday again, kind of keeping an eye specifically on PJM right now, where we have uh have some more forecast data, but it's definitely gonna be sort of this interesting uh setup. So I think one of the big things, unlike the heat event that we had in April, is we do have a fair bit more humidity expected with this event. So back in April, dew points were down in the 40s. It was, you know, warm, but not very humid. Dew points are expected to pick up with this, and that kind of amplifies the cooling load response. And it's still not peak summer. We're not dealing with you know 70 degree dew points in Virginia and feels like temperature is at 110. But it's still mid-May and we don't have all the thermal generation online that you'd expect. Outages are still elevated and transmission lines are still offline. So it definitely keeps a bit of a complicated uh setup here. So right now, PGM actually uh has issued three emergency alerts ahead of this event. So we had two hot weather alerts. Monday is RTO-wide, Tuesday is just for the mid-Atlantic and the South. And then on top of that, they issued a maintenance outage recall uh alert. So again, kind of bringing some of those uh generators that are on maintenance outage back onto the supply sack. Uh, if not, they typically get labeled as forced if they're unable uh to return to that. So on Monday, start to see the approach of some unsettled weather into Illinois. So, does that kind of lead to some demand destruction as those storms kind of push into Chicagoland and uh kind of quell some of that hooing load, also bringing with it a fair bit of a wind? So, do you just get some very strong Chicago Ave to practice air congestion as those storms start to come in? Again, think of it more downside, nigh, bullish ad hub. On Tuesday, and this kind of where it's more interesting, that is where PJM actually has the highest load forecast at the moment. Tuesday is where all that precipitation pushes into Ohio. So this is and still have these warm temps on the east, uh, the eastern half of the Interconnect. And that's where I think things start to get a little bit more interesting is does this drive some of the west to east flows that we saw, you know, so often in the winter? Again, more that's coal flowing where gas is offline. That's where I think you could see some more just explosive West Hub congestion as a result of those west to east flows. I definitely still expect to see a lot of volatility, particularly down in Dominion this week. But I think that's where things could get a little bit more interesting for uh for some west to east flows, maybe some ad hub downside, west hub upside uh in that scenario. Outside of that, though we are gonna be, you know, seeing one of the highest May peaks uh since 2015. The last time we peaked sort of right around 130, which is where PGM's current forecast is, was back in uh, I believe it was uh 2022, uh when we peaked around uh a little bit under 140 gigawatts, but that was on May 31st. So two additional weeks of of uh outages kind of coming back online. I if I had had to pick one, I would be more bullish on just load for Monday. Uh I think Tuesday you could maybe see some load underperform overall just due to the conditions out west. But I think Tuesday could be a little bit more of an interesting day on the congestion front. And then I think outside of that, just keeping an eye on how you know the battery uh mix in uh ISO New England starts to play out. I think this is gonna be sort of the first opportunity for some notable heat in both New York and New England. So, do we start to see a little bit more of that zone J premium pickup, kind of like what we saw? Last week. But then also, does the CHPE ramp up? Again, it's optional for them to ramp up at the moment until June 1st when their contracts will start. Does the CHPE ramp up and bring some more supply into zone J during the heat event? And then in New England, do we start to see a little bit more clustering around the net load peak with that battery storage? And again, it gives us a little bit more insight to that behavior as we get into the summer. And I think one thing too is just what and what ends up happening with uh that other fuel mix? Uh, does that end up going away or not? Yeah, uh, we'll be an interesting week to keep an eye out for and we'll be uh cracking it live on insights and again, maybe a little bit of a taste of uh what you can expect both on the podcast and on your insights feed as we get into the peak of the summer. Abby, anything else you wanted to bring up or anything else you're keeping in your eye out for next week?

SPEAKER_00 22:56

I'll be watching your your step count tomorrow, Tim. I'm excited to hear about your tales on the harbor walk.

SPEAKER_01 23:03

We'll we'll see. Maybe uh yeah, maybe that will be the insight. And if I see any any cool power infrastructure, uh you can bet your hardest that I'll be uh be taking a picture of it. But that uh that'll wrap it up. Stay cool next week, everybody, and we'll be back in your feeds again next Friday. Have a good one.