With the current conditions of extreme and prolonged cold weather, the price of natural gas into market areas have increased significantly due to the demand on natural gas generation. Because of this demand, ISOs are forced to call upon less efficient and more expensive generation units, thus driving the price even higher.
As Brian K. Sullivan from Bloomberg Energy News writes: “The crazy thing is that the current cold snap this week looks to be a bit more modest in the face of next week’s outbreak,” Rogers said. “The cold coming for the end of January is sufficient to make this the coldest month of the century so far and the coldest the Lower 48 has felt in at least 20 years.”
Temperatures in Chicago fell lower than the South Pole this month as freezing weather boosted energy consumption, grounded thousands of flights across the U.S. and disrupted operations at refineries and natural gas production sites.
The natural gas-weight heating degree days value for January is expected to reach 1,062.9, higher than the five-year average of 949.5 and the coldest since 2001, Rogers said.
The value is determined by subtracting the daily average temperature from a base of 65 degrees Fahrenheit, the resulting number is a measure of how cold it is and how much energy is needed to keep homes and warm."
The solution: ESCOWare® releases 'Extreme Weather Hedge Analysis" Tool
ESCO Advisors™ is proud to announce the release of the Extreme Weather Hedge Analysis tool for the ESCOWare® Demand Forecasting System.
This tool analyzes over 10 years of historical weather data to show the effect of extreme weather conditions on your energy portfolio. This analysis allows ESCOWare® clients to better prepare for times of extreme weather and to best protect their margins.
To learn more about the ESCOWare® suite of software solutions, please contact Irv Lebovics at 203-456-1833 ext. 803 or visit escoadvisors.com.