Articles Posted in Energy markets

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A recent report from Deloitte provides a good perspective on the prospects for wind and solar electricity.

Some takeaways:

Costs of wind and solar are now competitive with coal and gas. “Power purchase agreement (PPA) prices for wind and solar power are also competitive with other resources. The weighted average US price for the first half of 2021 from auction and PPAs for solar PV is US$31/MWh, while for onshore wind it is US$37/MWh. This compares to a weighted average wholesale electricity price of about US$34/MWh across US markets during the same period.” It now costs less to build new solar and wind plants than to continue operating existing coal-fired plants. Wind and solar costs are projected to fall by half by 2030.

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“Electric power markets in the United States are undergoing significant structural change that we believe, based on planning data we collect, will result in the installation of the ability of large-scale battery storage to contribute 10,000 megawatts to the grid between 2021 and 2023—10 times the capacity in 2019.”

EIA Report “Battery Storage in the United States: An Update on Market Trends.

How much is 10,000 megawatts? What is a megawatt?

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Abbott said the legislature’s response to the breakdown of Texas’ electric grid “fixed all the flaws.” News media reports and experts are questioning that conclusion.

A UT Austin study concludes that lawmakers did not do enough to prevent future power failures and recommended 20 additional policy changes. It is estimated that as many as 700 people died from the freeze.

At least part of the blame lies with the Legislature’s deregulation of the state’s power sector in 1995 that was supposed to save ratepayers money. According to a Wall Street Journal analysis, customers in deregulated areas have paid a surcharge of $28 billion over the last two decades, whereas customers in areas that remain regulated–including El Paso Electric, Austin Energy and CPS Energy in San Antonio–enjoy cheaper electric rates than those in deregulated areas.

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Link here to Texas Tribune article. Not a good idea. ERCOT definitely made some mistakes in the freeze, but it had no authority to require generators to winterize.  Everyone is still pointing the finger at everyone else. Another Texas Tribune article: the legislature is now considering creating a $2 billion taxpayer-funded account for those improvements.

 

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From Bloomberg Opinion:

“The International Energy Agency … doesn’t think demand will have fully recovered by [the end of 2021]. In the final quarter of next year it predicts global oil demand will still be running about 2 million barrels a day below pre-pandemic levels, and more than 4% below where it might reasonably have been expected to be in the absence of the crisis.”

Annotation-2020-06-22-094344 Annotation-2020-06-22-094345“The amount of stored oil that needs to be burnt through before there is room for producers to pump more is huge. Enough of the black stuff has gone into storage tanks, caverns and ships over the past six months to drive every heavy truck in the U.S. around the world five times–if it could all be turned into diesel fuel.”

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