Payments Plunge on Largest U.S. Grid, Threatening Closures

Source material cannot be posted to FR | 25 May 2016

[Red Badger]

It’s all those damn LED and CF bulbs I tell ya!............................

[Red Badger]

If you live in Florida, they are supposed to have one.................

[CodeToad]

Yep. Communists always use resources like water, power, and food as weapon to control the masses. “See, you are hungry and need us!”

[Vigilanteman]

I read it. Demand/supply imbalance is, and always has been, a big part of the picture. We have low demand now because we had a mild winter in most of the country. That can easily rebound with the widely predicted hotter than normal summer. Natural gas generates electricity to run a/c as well as heat. As do competitive components such as coal and nuclear power.

The key problem is that we have a regime which makes decisions based on political whim and emotions (coal is dirty, nuclear is unsafe, natural gas causes global warming) rather than sound economics.

[aquila48]

You, PAR#35, obviously don’t know how to read.... Here, let me help you - read this... slowly.

“The 13-state grid secured 5,000 megawatts of new gas-fired generation while commitments to coal and nuclear generation fell by more than a combined 4,000 megawatts, Bresler said.

“Future capacity prices will remain volatile, thereby making it difficult to forecast earnings,” Michael Worms, an analyst at BMO Capital Markets, wrote in a note. “The one major surprise was the level of new generation, which was higher in this auction than last year and, we believe, well above expectations.””

[WKUHilltopper]

Is this because industrial capacity and production is way down, depressed?

[tiki]

Those and having to pay for expensive, inefficient, labor intensive to build, solar and wind power

[PAR35]

I see you haven’t learned how to dig through the propaganda to find the nuggets of truth:

“Auction costs fell after demand forecasts were cut largely because of energy efficiency, Stu Bresler, senior vice president of market operations for PJM, said on a conference call. “

And if you look at the numbers, they added about 5,000 MW of gas generation, but lost 4,000 MW of coal and nuke. So supplies were essentially flat (up 1,000 MW on a base of 167,305.9 MW) while reserve margins climbed from under 20% to 22.4% - a 10% gain in the reserve numbers, (with the target only 16.5%).

Perhaps the unfiltered press release will help:
http://www.pjm.com/~/media/markets-ops/rpm/rpm-auction-info/2019-2020-base-residual-auction-report.ashx

[PAR35]

I don’t disagree with you. I just copied you in since you were copied on the blast to me.

[aquila48]

How deceptive of you to leave out the rest of the quote...

“We also had a significant injection of new supply in this auction.”

And the addition is not 1000MW, it’s 5000MW of new power generation. The 4000MW were not lost, they will be temperarily shut down because they couldn’t compete for the time being, and they are in reserve, and can be brought back on line when needed.

And, yes, I’m sure there’s was a softening in demand too.

But that wasn’t my point of my original comment. It was about the misleading headline of the article that made it sound like they were going to have to shut down the grid, and thus bad news for the customers. And based on the comments, many took it that way. That’s why I said “read the article”.

It’s actually good news for the customers.

[Crucial]

I guess Obama’s plan to cripple the energy sector aren’t wuite working out.

[Ozark Tom]

Coal and nuclear plants take about two days to bring up and stabilize from a cold start. There are fatigue issues inherent in the temperature ramp-up or shutdown of these plants. That's why the term base-load is applied to their operation, as they only shut down at multi-year intervals for maintenance, or a SCRAM emergency forces them down. They also do not load follow to any extent.

They can be maintained as hot spinning reserve burning fuel and with an operations crew on hand; but,that doesn't save much in operations cost does it? They also will require a bit of time to come to full load--several hours--as opposed to a straight gas turbine peaking plant, which can accept load within minutes from a cold start.

The wind and solar feeding the grid changes delivered power very rapidly at times, thus the dependence on gas fueled turbines to frequency stabilize the grids on a very short time scale. The price of gas fuel for these turbines is bottoming for now; but, will escalate in price quickly once the lack of replacement wells curtails supply once again. For now the grid suppliers are operating at a loss on the base load equipment.

[ckilmer]

The other side is that power demand is down because of energy efficiency. More good news for the consumer.

[rebooted]

The way I read the article, loss of coal industry would drive prices up; but energy prices are netting down due to gas price decline. Coal would still be laying off workers because cheaper gas was being bought by suppliers and the rate of conversion from coal to gas fired has progressed vary rapidly. Good old competition. As for my own senator Casey, he's but a shadow of his dad, Gov Casey of PA. a principled Roman Catholic who stood tall and strong against his democrat party on abortion. He spoke at my graduation and the message of his commencement address was to respect tradition and listen to what history teaches us.

[dr_lew]

Oh, the irony! “Will I need to purchase a generator because my power company is going broke from low energy prices due to a glut in electric power production?”