CPV Retail Blog January 30

New Product Offering

CPV Retail is excited to announce the launch of our new energy transition product – The Carbon Footprint Report.

Whether organizations are just beginning the sustainability journey or have well established climate goals and targets established, CPV Retail Energy as a “Greentailer” is a trusted renewable energy solutions provider. Regardless of where organizations are on the sustainability “learning journey”, or in the energy transition, we are focused on matching our unique set of renewable energy solutions to specific goals and objectives. The old saying “what gets measured gets managed” is especially true when it comes to realizing lower emissions goals. The Carbon Footprint Report is an important first step on this journey.

Please reach out to your contact at CPV Retail Energy for more information or contact us at retailinfo@cpv.com.

PJM Regulatory Review

Additional Agenda Items

The Organization of PJM States Inc. (OPSI) has engaged a committee with PJM itself to create a viable forward clean energy market. This is known as the Forward Energy Attribute Market Work Group (the obtuse FEAMWG) and consists of volunteers from interested OPSI states, PJM, and the Brattle Group.
The current stated goal of this “entity” is to work towards generating a consensus on market design constructs for a functioning forward energy attribute market.
An additional key consideration in this endeavor is to keep this new market non-jurisdictional, which also means out from under FERC.
PJM IMM recently addressed issues related to the inclusion of Energy Efficiency resources in the PJM Capacity Market.

Market Drivers

Energy Market Update

Power and natural gas systems are adjusting back to somewhat normal operations after last week’s extreme cold and ice/snow storms. Several operators experienced all-time winter peaks across their system (ERCOT) while at least one (TVA) broke a record that had previously been set in the summer.
The results of an offshore wind solicitation (3rd time is a charm) resulted in the New Jersey PUC awarding 3,742 MW of capacity expected to be in service in 2031/2032.
Global LNG prices have dropped below $10/MMBtu, which is low enough to incentivize coal-to-gas switching, and as such European gas demand has begun to stabilize in the face of storage balances that are still too full.
The Department of Energy (DOE) is adjusting its approval protocols for new US LNG export terminals and will now include “climate impact analysis” as part of the process.
Oil prices continue to trade in a fairly tight range with the battle lines still drawn between Middle East tensions and whether China is still adequately growing its economy to keep oil demand strong.
Data center demand growth in northern Virginia (almost 3000 MW) will benefit from a proposed NextEra power line called the MidAtlantic Resiliency Link, which will run approximately 130 miles through parts of Virginia, Maryland, Pennsylvania, and West Virginia.
With storage balances still running, excess balances compared to previous years’ summer prices continue to be at risk for lower for longer, unless the balance of the winter trends back towards cold/normal. The first week of February looks to be well above normal but several forecasters indicate the possibility of another blast of polar air heading into the lower 48 by mid-February.

Potpourri Comments

The development of a globally traded LNG market and the impact that it has had on price discovery, transparency, and flexibility was made apparent through this recent polar vortex event here in North America. With both Europe and Asia well supplied this winter (European storage inventories still excessively high) and with both utilizing LNG as a larger % of their respective gas supply portfolios, price dislocations in one region have an immediate impact on LNG tanker traffic. It was not that long ago during the initial onset of COVID, and before the Russia/Ukraine war when it became clear that the US was going to be the swing LNG supplier. Cargoes originating from the US plummeted as global demand was drastically reduced during the waves of COVID-induced economic disruptions. Natural gas prices in the US reacted appropriately by falling dramatically, which was required to help balance the system. Today we observe an LNG market that is even more advanced with more participants and necessarily more liquidity. When cash prices at the Henry Hub and along the Houston Ship Channel (traded above $10/MMBtu) increased above European (TTF) prices and Asian (JKM) prices, the reaction was swift, and we saw several US export terminals reduce liquefaction volumes and put more gas into the US pipeline grid. It made absolute sense from an arbitrage standpoint and certainly points to LNG trading desks now being able to manage cargoes and deliveries closer to real-time, even though many deals are still done months in advance. It is all about the flexibility in the system and in the contracts, which is exactly what the CPV Retail Team can do for you. Let us craft a power sales agreement with those considerations and become a partner in developing products and prices that augment your business!