Happy Festivus to those of you who celebrate.
This week’s Energy Charts are posted at https://aleach.ca/charts.
This week, we’ve got stories from Marc Vermette on Nova Scotia Biomass and two from Erica Beattie on Keystone and German coal. Erica’s German coal story was the one that most caught my attention, since we’ve heard a lot over the years about how far ahead Germany is in the energy transition. For a time, you could not talk about renewable power without someone extolling the virtues of the Energiewende…it was almost as bad as the Norwailing that comes when anyone talks about oil wealth in Alberta. The reality, of course, was always more muddled. Germany was building new coal plants as Alberta was planning a phase out, walked away from its nuclear fleet, and relied much more on Russian gas than was adviseable at the time. And now, they’re needing to find a way to reduce that reliance, in a hurry.
Before I move on to my hot takes for the week, a bit of staffing news. As the semester winds to a close, we’ll say goodbye to two of our writers, Keshinee Moonian and Debosree Mukherjee. Marc, Erica, and Yousaff Habib will join Kayla Layden writing through next term, along with some guest spots from a few of our students doing interesting new electricity research. Thanks, Deb and Keshi for your work getting the weekly charts back up and running over most of the last year.
This week, I want to highlight four things.
First, of course, we set two new peak load records in Alberta power this week, with peak system load of 12,187MW on December 19th between 5 and 6 pm, and then a slightly lower 12,101MW peak on December 20th (although a more challenging grid situation because of less wind that day), and a new record 12,193MW on December 21st.
Prices were pinned to the $1000/MWh cap for much of the day on the 21st after the coal-converted-to-gas Keephills-3 power plant was unepectedly offline for much of the early part of the day, and then record loads and limited import availability hit later in the day. We were lucky that the wind was blowing a bit on the evening of the 21st, or things might have been a lot different as reserve margins were perilously thin in the early evening.
Looking ahead, Alberta forward power prices continued to creep up, with the flat contracts now settling above $300/MWh for the coming months and pushing up a bit in the back part of the 2023 calendar year too.
For the rest of the week, all eyes turn south to the US grids where reliability issues are already rearing their heads as much of the US grapples with the coldest Christmas in 40 years.
The second highlight I’ll raise for you is the continued spike in California gas prices, which settled at nearly $60 per MMBtu on a cash basis yesterday. Prices were down a bit today, but that’s definitely something to watch as the price effects ripple into the power market.
Next, on the climate change front, this thread from Hannah Ritchie at Our World in Data is fantastic. It’s easy to lose sight of how much things have changed both globally and in Canada with respect to our emissions projections and energy transition expectations. We still have a long way to go, but don’t let anyone tell you we’re not making progress.
And, finally, a little bit of an early Christmas present for Alberta Premier Danielle Smith and Finance Minister Travis Toews as oil prices had a much better week this week. We’re not talking about a staggering recovery or anthing, but the trend pushed back a bit in the right direction for the provincial budgets.
The WTI forward contract has seen a significant jump in the front months, with almost no movement further out in the strip. Combined, this has pushed us back into backwardation across the WTI forward market. Yes, I just wanted to sneak that word into the weekly again.
For next week, I’ll probably run a quick update just to wrap the year, and I’ll hopefully have some new graphs for you as I work to prep for Winter term teaching as well. Students will be off for a couple of weeks, or at least they’re not expected to write anything, but you never know…
Happy holidays and stay warm!