Market Outlook
The best energy solutions emerge from many factors. A prime example is the energy market itself — something our team is well-versed in considering on your behalf. Here's an overview.
Natural Gas
NYMEX Natural Gas Pricing
The March 2023 contract settled at $2.451/MMBtu.
The April 2023 contract was trading around $2.79/MMBtu (as of publish date).
Natural Gas Storage
Current BCF in Storage (2023 vs 2022):
| Week Ending | Total BCF | Week Ending | Total BCF |
| 03-Feb-23 | 2,366 | 04-Feb-22 | 2,101 |
| 10-Feb-23 | 2,266 | 11-Feb-22 | 1,911 |
| 17-Feb-23 | 2,195 | 18-Feb-22 | 1,782 |
| 24-Feb-23 | 2,114 | 25-Feb-22 | 1,643 |
There is about 29% more in underground storage now than there was at this time last year.
Source: EIA
Weather
6-10 Day
8-14 Day
Source:NOAA/ National Weather Service
Market News
Fire-damaged Freeport LNG gets U.S. approval for partial restart
Freeport LNG, the second largest U.S. liquefied natural gas exporter, was approved to partially restart commercial operations after an outage that lasted more than eight months. Due to a fire in June, the LNG facility was knocked offline and gas processing halted for investigations. U.S. natural gas prices settled 9% lower recently, continuing a decline from less heating demand and rising production and storage.
Coal and natural gas plants will account for 98% of U.S. capacity retirements in 2023
https://www.eia.gov/todayinenergy/detail.php?id=55439
In 2023, operators plan on retiring 15.6 GW of electric generating capacity in the United States, mostly from natural gas-fired (6.2 GW) and coal-fired (8.9 GW) power plants. Coal retirements have averaged 11 GW from 2015 to 202. The 8.9 GW retiring this year accounts for 4.5% of the total coal-fired capacity at the start of the year. The natural gas-fired plants that are retiring are in California. They were originally set to retire back in 2020 but received a 3-year extension to maintain grid reliability.
The Henry Hub natural gas spot price declined 41% in January
https://www.eia.gov/todayinenergy/detail.php?id=55539
The natural gas price at the Henry Hub declined by 41% in January 2023 compared to December 2022. Natural Gas prices typically increase in the winter due to decreased temperatures and increased demand for space heating. January 2023 was the warmest January since 2006. Due to this, natural gas consumption was 15% lower than the five-year average for this month resulting in lower prices.
PJM launches fast-track capacity market reform process in face of shrinking reserve margins
https://www.utilitydive.com/news/pjm-capacity-market-reform-reserve-margin/643598/
PJM is working to strengthen its capacity market after widespread power plant outages during Winter Storm Elliott. PJM’s board has asked the Resource Adequacy Senior Task Force to consider ways to improve risk modelling, enhance accreditation and ensure capacity suppliers are fully paid for the risks they take. According to the report, 40 GW or 21% of PJM’s installed capacity is at risk of retiring by 2030 while they expect the grids load to grow by 1.4% annually. PJM aims to file any proposed changes with the Federal Energy Regulatory Commission on Oct. 1. The board asked PJM management to consider delaying future capacity auctions so they could include any changes.
Capacity Prices Fall In Most Of PJM For 2024-25, DPL-South Still Sees Nearly 30% Spike
http://www.energychoicematters.com/stories/20230227a.html
PJM has posted results from its base residual auction for capacity (BRA) under the reliability pricing model (RPM) for the 2024-25 delivery year. These results are reflective of the tariff changes sought out by PJM, to address concerns about offer behavior seen in the DPL South LDA.
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