Forget Robinhood. Forget Reddit. This is the Adult Table.

-- Comanche Peak Nuclear unit will make roughly $200,000,000 on Monday

-- Uncovered 50MW positions will lose an estimated $7.1 million on Monday.


There will be corporate bankruptcies

There will be millionaires made.

There will be blood in the streets.

..and it is glorious...


Texas wholesale electric prices spike more than 10,000% amid outages

The spot price of wholesale electricity on the Texas power grid spiked more than 10,000% on Monday amid a deep freeze across the state and rolling outages among power producers, according to data on the grid operator's website. 

Real-time wholesale market prices on the power grid operated by the Electric Reliability Council of Texas (ERCOT) were more than $9,000 per megawatt hour late Monday morning, compared with pre-storm prices of less than $50 per megawatt hour, according to ERCOT data.  

The surge reflects the real-time megawatt hour price of electricity and the cost of congestion and losses at different points across the grid. Early on Monday, ERCOT said extreme weather conditions forced many power generating units off the grid, upending the supply of electricity.

On Feb. 10, well before inclement weather hit Texas, spot wholesale prices on ERCOT settled around $30 per megawatt hour at the end of the day, ERCOT data show. But on Sunday, the price per megawatt hour surged past $9,000 on the grid.
ERCOT can be more susceptible to wholesale price spikes because it does not  have a capacity market.

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Comments (17)

Feb 15, 2021 - 5:49pm

Didn't prices like this happen back in the Summer of 2019 for ERCOT as well?

Put in a calc where let's call it a "low" $5,000/MWh over 24 hours running at capacity of 2,300 MW would net them $276 Million in revenue absolutely nuts although idk power markets at all or what the costs of running a plant like that are.

Given the plant of that capacity and the utilization rates for nuclear is not having hedged out a good chunk of that capacity on the term market realistic though?

Feb 15, 2021 - 6:46pm

Absolutely 100%.

If we were to pick an actual plant for non-illustrative purposes, I'd probably pick Odessa Ector, Natural gas fired, 1,135 MW in West Texas.  I don't think Odessa was on Friday...it sure is now...

Read this for the last time it really hit the fan... https://americanhistory.si.edu/powering/dereg/current2.htm

That evening, a tornado hit the 900mw Davis-Besse nuclear power plant in Ohio. While the reactor sustained no damage, the plant shut-down as a precaution. Storms also knocked out several fossil-fuel plants and transmission lines throughout the region. The situation neared crisis level. Prices on Thursday the 25th exceeded $5,000 per mwh, reaching a high-water mark of $7,500 at one point

Namaste.

D.O.U.G.

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Feb 16, 2021 - 10:40am

EQ --

The $100k question is whether they decide to institute a capacity market.

Also,  if SPP will remain a viable RTO after this crap show.  Should  be fun as prices are still above $6,000 this morning

Namaste.

D.O.U.G.

Most Helpful
Feb 16, 2021 - 11:05am

Put me down as "ERCOT Energy-Only Forever" guy.  I don't think the "break-down" if you want to call it that was from a market structure point of view; I just don't know how you have a grid that can withstand a 1 in 30 year weather event in a location where that weather is a-typical (1 in 30 heat wave for Texas is a diff beast than 1 in 30 cold wave).  I would also add that ERCOT specifically seeks a 1 in 10 break down event, last is in 2011 so we are right on schedule.  

I don't even know what to make of SPP.  Do you think that if it goes down it merges w/ MISO?

Feb 16, 2021 - 7:24pm

Not sure.  SPP has always been the red headed stepchild for years.  I know John tried a merger years ago with them, but decided on Entergy+ area instead.  If you are SPP, have the most coal units, import from MISO and still cant keep prices under control.  Wow.  As a strong caveat, natty prints are $200/MMBtu in the region right now, so if it is JUST the spark spread, then I can buy it.  But DAMN...

Namaste.

D.O.U.G.

Feb 19, 2021 - 10:29pm

Alphabet.

Tell me about it.  At least MISO "stopped" the spread and held.  This is going to be enlightening when the auditing begins

Namaste.

D.O.U.G.

Feb 22, 2021 - 10:39am

I got a plain question given I have no idea how power markets work. Does this mean the consumers will be billed at that high rate? I mean wont the government step in or something because that will cause people to lose their homes!

Feb 23, 2021 - 1:02pm

Only if they were exposed to the real-time power price (Griddy for example).  Most ERCOT retail is on either fixed contracts or index and block hedged.  Straight fixed is like 99% of ERCOT resi, small & med C&I (homes, starbucks, office buldings, etc).  Index w/ fixed block hedges are pretty much just for large industrial (refineries); those guys largely shut-in to take their hedges to market and make $$$.

Feb 23, 2021 - 6:37pm

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Namaste.

D.O.U.G.

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