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Tag: Electricity

Nuclear Power Part II: Ongoing Debate

Posted on by Getchoice!

By: Chris Amstutz

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HBO’s Chernobyl

Many believe that we are at a crossroad as a species due to CO2 emissions from fossil fuels. Plans such as the Green New Deal and other energy sector de-carbonization plans have been in the news lately, but surprisingly none have included ideas about nuclear power. In our first blog, Nuclear Power: The Half-Life of an Industry, we discussed public opinion and the economics of nuclear power. Since that time we have seen more of the same negative public opinion, and a greater political push for de-carbonization.  Shows like HBO’s Chernobyl continue to cast a negative light on a technologically established energy source that could help assist in accomplishing these political goals. Opinions aside, the debate over nuclear energy continues, and Choice! Energy Management is monitoring the implications of any potential regulatory changes.

Many who saw HBO’s latest series “Chernobyl” were horrified by the visualization of the failed Russian power plant (cue the show’s creepy soundtrack). While it may have been great for TV, this popular show was blamed for misleading public opinion when it comes to the industry (see what they got wrong here). For many, this becomes their sole opinion about nuclear power. While it is unknown if public opinion has really hampered the industry, it is known that subsidies granted to other carbon-free energy technologies, and the growth of natural gas fired generation, can be to blame. Critics of nuclear power argue that nuclear facilities give off radiation that can result in cancer, and even Seinfeld couldn’t make that a joking matter. Disposal of spent uranium is also a point of criticism. For these criticism’s we turn to some “alternative facts”. US nuclear power has provided reliable, carbon-free energy for 20-25% of our electricity for the last 20 years.  For comparison, in 2013 all other carbon free electricity sources totaled 12% and today are up to 19%. Nuclear facilities require significantly less land space and also have less physical impacts on wildlife than solar and wind energy. Also, when you factor in the reliability and ability for electricity to easily be dispatched when needed, nuclear could certainly assist with the movement towards a carbon-free grid.

The Presidential election of 2020 nears and climate change policy has been in the platform of most Democratic candidates. This policy debate will center on the energy industry and many may come to the conclusion that renewable energy technology is not sufficient at this time to meet ambitious political goals. The next step would be an evaluation of the carbon free benefits of nuclear power. While the EIA is forecasting a 17% reduction in nuclear generation over the next 5 years, recent news in Ohio about First Energy postponing the retirement of two nuclear facilities has many in the industry hopeful for future government support. Currently, there is 1,670 Megawatts (MW) worth of nuclear generation capacity being built or planned to be built in the next 5 years. This is countered with 8,312 MW of capacity (8% of total) planned for retirement in the next 5 years. A trend that is not likely to reverse without the help from market forces i.e., an increase in Natural Gas fired generation cost, or a government policy change i.e., a subsidy for carbon free power.

Is nuclear power the most underrated energy source we have in the US? Maybe, but the amount of nuance in electricity markets necessitates proper analysis. If the US is to really make a carbon-free “green” energy push, it would make sense that nuclear power is in the discussion. The debate over energy will continue on and it hopefully won’t be as serious or depressing as the HBO Chernobyl series. In the mean time, we will continue to see growth from natural gas fired generation and renewable generation, but it may not be enough to accomplish the political goals of carbon-free emission reduction of 60% or more. Electricity markets will remain in flux and Choice! Energy Management will continue to monitor potential structural changes during this time of debate.

Confidential: Choice Energy Services Retail, LP.

Strategery

Posted on by Getchoice!

By: Matthew Mattingly

I often get asked what separates Choice! Energy Management from our competition. Usually I respond with the word “Strategery” to describe our services. Not only does it typically get a smirk from those that remember the classic Bush v Gore SNL skit, but it gets people to quickly associate Choice with a key service offering: STRATEGIC PROCUREMENT. While electricity and natural gas procurement have been the backbone of energy consulting since deregulation began in the 1990s, not every consultant is strategic with their energy procurement recommendations. Countless times I have walked into a prospective client’s office, and been told that their previous consultant only provided them with the minimal effort process of procuring 30-60 days prior to contract expiration. What is strategic about that?

The Choice Way

At its core, the procurement process looks similar for many energy consulting companies. The analyzing of a client’s usage is followed by obtaining and verifying bids, and then reviewing and executing the procurement contract. However, many miss the first, most important step of the TIMING of the RFP. This is where we at Choice! Energy Management differentiate ourselves from the competition. We truly take the time to understand our client’s risk tolerance, financial goals, and objectives, and then develop a procurement plan around this profile. Once that Energy Action Plan is established with our clients, we then evaluate each energy market area, determining opportunities that may exist. The right timing window in certain market areas can be as razor thin as vote counts in Florida, but our market experience ensures that no recounts are needed after execution. This allows us to guide our clients through each purchase decision, and the client becomes a price setter and not a price taker.

Detailed Market Analysis

The analysts at Choice pride themselves on the insight and value provided to clients. An example of this analysis has been our ongoing work with clients in Texas. The Texas electricity market has changed a lot over the last couple of years, sort of like the GOP. Coal retirements, West Texas demand growth, delayed natural gas generation projects, and renewable generation growth have resulted in much tighter reserve margins causing dramatic price movements in the ERCOT market. However, that doesn’t mean that opportunities do not exist in this market area. Through constant monitoring of forward curves provided by our sister company, EOX Live, our procurement team has utilized the backwardation that currently exists in the ERCOT markets to our clients’ advantage. With most of the reserve margin fears focused on 2019 and 2020, wholesale electricity curves are trading at a discount in the extended curve when compared to the prompt 2020 calendar strip (see chart below); thus, giving clients attractive contracts in 2021 and beyond. Many of our clients are taking advantage, and are thankful of our team presenting options, even if their current contract is not expiring anytime soon. Many times our clients are beating their current contract, and are also gaining budget certainty and price protection.

Data: EOX LIVE
Graph: Choice! Energy Management via ProphetX Platform

If your energy consultant’s procurement decisions have a consistent pattern of waiting until 30 days prior to contract expiration to execute, then it might be time to look at other consulting options. Our team would love the opportunity to present to you our full energy management program, centered on STRATEGIC PROCUREMENT. Don’t get fooled by the same lack of procurement service. As our great, 43rd President once said…… “Fool me once, shame on…shame on you. Fool me — you can’t get fooled again.”

Confidential: Choice Energy Services Retail, LP.

Jeopardy – Green New Deal

Posted on by Getchoice!

By: Chris Amstutz

What better of a way to talk about the Green New Deal than by comparing it to America’s favorite guessing game? We’ve seen talking heads coast to coast debate the merits of this idea to revolutionize the energy grid, many of whom haven’t thought twice about how their iPhone gets charged at night. While the game of Jeopardy operates in fact base questions, there seems to be a lack of understanding about what is truly being proposed in Congress. Choice! Energy Management is not in the business of influencing politics (thankfully), but when politics encroach upon the energy markets, we are obligated to analyze the risks. We may not be Alex Trebek, but we do know a thing or two about energy markets and how the government may affect them.

Category: The State of Green

$200: This is the fastest growing electricity source … “What is, Wind Energy.”

$400: 2018 was equal to this past year for national CO2 emissions … “What is, 1992.”

$600: Since 2005, 66% of America’s total reduction in CO2 emissions has come from the help of this fuel source … “What is Natural Gas.”

$800: This US State has seen the largest generation of non-hydro renewable energy … “What is, Texas.”

$1000: This beer-loving European country has implemented similar, national energy initiatives … “What is, Germany.”

America has taken great strides to reduce its carbon footprint. This has mainly been due to free market natural gas prices becoming cheaper than coal prices, and infrastructure changes will continue to reinforce this.

Category: “Bright” Green Ideas

$400: The 2019 Green New Deal wants the U.S. to have net-zero carbon emissions by this year … “What is, 2030.”

$800: This bovine by-product’s, environmental impact has become a source of mockery … “What is, methane.”

$1200: This type of taxation has been proposed to pay for a Green New Deal … “What is, a Carbon Tax.”

$1600: This amount of technical, grid solutions have been proposed in the Green New Deal … “What is, Zero.”

$2000 (Daily Double): This has been the rumored price tag for the Green New Deal energy changes … “What is, $15-25 Trillion” (Any number will be accepted due to hypothetical nature of the question).

While details are slim in the Green New Deal, opponents argue that the proposal is a non-starter, for we do not currently have sufficient green technology to meet the physical realities of the fluctuating grid (especially without increased nuclear power). Proponents argue that the death of our planet, and the potential for a $500 billion reduction in GDP, due to climate change, make the cost of the Green New Deal irrelevant. Click here for an open minded Twitter thread on the logistics of the topic. The fate of the planet very well could be a question that only Alex Trebek has the answer to.

Final Jeopardy Category: Greener Pastures?

Question: This term can best be used to describe the current conversation about the Green New Deal relating to energy?… (Catchy final tune)… “What is, Symbolic.” At the end of the day, there is no indication that we are nearing the passing of any federal legislation for green energy (outside of existing subsidies). Recently, voters in the state of Washington voted down a proposed carbon tax. Other legislation like the Climate and Community Protection Act (CCPA) proposal in New York, likely has little chances of passing in its current form. The theme of promoting green energy to curb climate change will not be going away anytime soon. All of the current Democrat Party presidential candidates are supporting the federal Green New Deal. As we stand today, any government intervention in the energy markets will likely result in increased prices for consumers. Whether for, against, or indifferent, the talks about green energy have escalated, and Choice! Energy Management will continue to monitor the implications on the federal and state levels.

Confidential: Choice Energy Services Retail, LP.