Fortunately, we have our windmills

mr. green to the rescue

Natural gas prices soar as the summer electricity peak approaches

The Henry Hub natural gas spot price, an indicator of nationwide prices, stormed past $9.30 per million British thermal units (MMBtu) Thursday, up from its early January price of $3.74 per MMBtu and the highest level since 2008, according to government data. U.S. natural gas inventories have been drained in recent months, declining 17.6% year-over-year and down 15.3% relative to their 2017-2021 average, additional data released Thursday showed.

“There’s almost no ceiling for natural gas,” Kent Bayazitoglu, an energy analyst at the firm Baker & O’Brien, told The Wall Street Journal. “You can reduce your driving a lot easier than you can reduce your natural-gas consumption.”

The large natural gas price increases have occurred ahead of the summer when annual natural gas demand for electric power has historically peaked, according to the Energy Information Administration. Demand peaked in August 2021 last year and July 2020 the year before.

On Thursday, Henry Hub futures for June-August hovered between $9.14-9.17 per MMBtu, CME marketplace data showed. By comparison, the average price of natural gas was $3.26 per MMBtu between 2010-2021.

And from my draft folder, dated May 9th, this:

Electricity Shortage Warnings Grow Across U.S.

Power-grid operators caution that electricity supplies aren’t keeping up with demand amid transition to cleaner forms of energy

From California to Texas to Indiana, electric-grid operators are warning that power-generating capacity is struggling to keep up with demand, a gap that could lead to rolling blackouts during heat waves or other peak periods as soon as this year.

…

The risk of electricity shortages is rising throughout the U.S. as traditional power plants are being retired more quickly than they can be replaced by renewable energy and battery storage. Power grids are feeling the strain as the U.S. makes a historic transition from conventional power plants fueled by coal and natural gas to cleaner forms of energy such as wind and solar power, and aging nuclear plants are slated for retirement in many parts of the country.

The challenge is that wind and solar farms—which are among the cheapest forms of power generation— [breaking news from the WSJ, unfortunately, with no source cited for the claim – ed] don’t produce electricity at all times and need large batteries to store their output for later use. While a large amount of battery storage is under development, regional grid operators have lately warned that the pace may not be fast enough to offset the closures of traditional power plants that can work around the clock.

Speeding the build-out of renewable energy and batteries has become an especially difficult proposition amid supply-chain challenges and inflation. Most recently, a probe by the Commerce Department into whether Chinese solar manufacturers are circumventing trade tariffs on solar panels has halted imports of key components needed to build new solar farms and effectively brought the U.S. solar industry to a standstill.

Faced with the prospect of having to call for blackouts when demand exceeds supply, many grid operators are now grappling with the same question: How to encourage the build-out of batteries and other new technologies while keeping traditional power plants from closing too quickly.

“Every market around the world is trying to deal with the same issue,” said Brad Jones, interim chief executive of the Electric Reliability Council of Texas, which operates the state’s power grid. “We’re all trying to find ways to utilize as much of our renewable resources as possible…and at the same time make sure that we have enough dispatchable generation to manage reliability.”

The risk of outages resulting from supply constraints comes amid other challenges straining the reliability of the grid. Large, sustained outages have occurred with greater frequency over the past two decades, in part because the grid has become more vulnerable to failure with age and an uptick in severe weather events exacerbated by climate change. A push to electrify home heating and cooking, and the expected growth of electric vehicles, may increase power demand in coming years, putting further pressure on the system.

California regulators on Friday said as much as 3,800 megawatts of new supplies may face delays through 2025. Such delays would pose a major challenge for the state, which is racing to procure a huge amount of renewable energy and storage to offset the closure of several gas-fired power plants, as well as a nuclear plant. Gov. Gavin Newsom recently said he would consider moving to keep that nuclear plant, Diablo Canyon, online to reduce the risk of shortages.

“We need to make sure that we have sufficient new resources in place and operational before we let some of these retirements go,” said Mark Rothleder, chief operating officer of the California Independent System Operator, which operates the state’s power grid. “Otherwise, we are putting ourselves potentially at risk of having insufficient capacity.”

…

“I am concerned about it,” Mr. Bear said. “As we move forward, we need to know that when you put a solar panel or a wind turbine up, it’s not the same as a thermal resource,” such as gas or coal.