This week continued the trend of increased volatility which has been largely absent from the power market in the recent past. Demand growth has become significant enough to compress the supply cushion to the point that plant outages can now cause major swings in price. This past weekend saw the market hit its upper limit of $999 due to several coal & gas outages and weak wind during high temperatures. Overall the week averaged $28.32/MWh, 38% higher than the previous week. The week ahead may prove even more volatile with a high pressure system bringing a heat wave set to challenge the current summer peak demand record.
The AECO-C natural gas spot price averaged $1.75/GJ this week, $0.19/GJ (9.8%) lower than the previous week’s average. Since climbing to $2.83/GJ in May, prices collapsed to $1.59/GJ in July and August has averaged $1.73/GJ so far.
Hurricane Harvey’s devastation of the Gulf Coast may affect as many as 25 refineries and is predicted to raise Albertan’s pump prices by 12 cents or more. It is the strongest storm to hit the state in nearly 60 years with over 25 inches of rain in two days and 25 more expected by the weekend. Our thoughts are with those who are affected by the hurricane.