So Nice, They froze it twice.
As we head into winter, different U.S. regions are warning about power prices ripping higher.
The New York Grid was the most recent, saying power prices may rise 20 to 30% this winter.
The issue with winter power is the reduced efficacy of renewables during these periods.
Solar intensity dwindles significantly impacting solar while wind speeds can vary straining natural gas and coal power plants.
New York City natural gas prices for January are over 60% higher versus last year and Consolidated Edison expects power bills to climb 22%.
“Wholesale electricity prices may be 20% to 30% higher than last winter,” the top executive at the state grid operator said at a Monday media briefing. While the New York Independent System Operator (ISO) doesn’t forecast prices, there is a “very tight correlation” between natural gas and power prices, Chief Executive Officer Richard Dewey said.
According to the ISO, state power demand is expected to peak at about 23.9 gigawatts this winter, up 2.8% from last year’s high.
Aaron Markham, Vice President of Operations, sums up a key fact missed on the assessments: “Since its summer assessment, about 477 megawatts of fossil fuel generation have permanently shut and 672 megawatts of wind and solar have come online.”
He goes further by saying the intermittency of renewables means “they are not a one-for-one replacement for the fossil fuels being retired.”
We are seeing pressure around the US on the electricity front that has seen prices hold at highs in over a decade.
In the below chart, 2022 (thick blue) tracks well above every other year since 2013.
Meanwhile, Across The Pond…
Europe has seen their problems get worse as France struggles to bring back idled nuclear reactors for winter.
The below chart puts into context just how far off place France is on bringing back their reactors.
The French government has been telling EDF that these reactors were going to be decommissioned for the last decade.
This caused EDF to adjust their maintenance schedules.
But then the government hugely shifted policy in 2022 by pushing EDF to not only keep the reactors operational, but also to extend their useful life.
This is a massive about face that the assets can’t handle without some extensive maintenance. This has also been complicated by supply chains and labor shortfalls/strikes.
But as you can see from the chart below, France has a long way to go to catch up to its projections.
You can see in the below chart that power prices in Germany and France have turned higher even as natural gas prices have come down.
Let’s Stick This Solar Where the Sun Don’t Shine!
Though the Brits complain about the weather all the damn time, for some reason they’re optimistic about solar power.
God punished them for their naive idiocy earlier this week when he shut off the wind.
Indeed, the wind calmed down so much that it only generated 0.4 gigawatts of energy.
It usually generates 16.4 gigawatts.
To put that into context, the drop of 16 gigawatts of production is equivalent to shutting down 14 nuclear power stations.
This caused the UK power markets to get exceptionally tight earlier this week.
What’s worse is that the UK’s fail safe is to just purchase more directly from France!
As France sees its production capacity dwindle, it’s leading to difficult times as we head into winter and the likelihood of a polar vortex.
Dispatchable power is dwindling, and it can drop off quickly due to the intermittent nature of renewables.
The variability creates broad issues that only get amplified in the winter months as solar efficacy drops off considerably.
Wind flows can adjust abruptly, and the remaining capacity (mainly fossil fuels) is stressed further.
The harder you run these assets, the more wear and tear and maintenance that will be required to ensure their continuous use.
The shift between baseload and peaking capacity is only getting worse as more coal is slated to come offline over the next six to twelve months.
Bottom line: it’s only going to get worse.
Editor, The Neo Report
Special to The Wiggin Sessions