Welcome to Grid Brief! Here’s what we’re looking at today: the arctic weather is putting the screws to parts of the US power grid, Qatar pauses LNG shipments through the Red Sea, and more.

Arctic Weather Strains US Grid

Arctic weather has sunk American natural gas supplies.

“U.S. gas production was on track to drop by around 10.6 billion cubic feet per day (bcfd) over the past week to a preliminary 11-month low of 97.1 bcfd on Monday due primarily to freeze-offs, when low temperatures freeze wells and other equipment,” reports Reuters.

Power outages have hit the Northwest as a result of the arctic blast.

The impact on Texas, which relies on natural gas for both electricity and heat, has also been acute. The Electric Reliability Council of Texas issued its second Conservation Appeal on Monday, particularly for the early morning window when solar has yet to come on the grid.

The cold also spiked power prices in Texas. “Power prices in ERCOT soared to $1,073 per megawatt-hour (MWh) during the peak 8 a.m. hour on Monday in the grid's day-ahead market. For the same hour on Tuesday, prices settled at $1,893 per MWh,” reports Reuters.

California also saw several hours of power prices over $1000 per MWh on Monday morning perhaps due to regionally constrained gas supplies thanks to the storm.

Qatar Pauses LNG Shipments Through Red Sea

At least five LNG tankers controlled by Qatar that were headed toward the Red Sea have paused since Friday, as conflict between the US and Houthi rebels have increased in the region.

Crucially, these tankers have not diverted their routes, though it is unclear how long they will remain halted.

Despite the fact that 13% of Europe’s gas comes from Qatari LNG, natural gas prices on the continent dropped on Monday due to confidence in the continent’s natural gas stockpiles.

On Monday, the US issued a warning to its merchant vessels in the region to avoid the area after one of them was struck by a projectile.

LNG tanker transport through the Suez Canal has dropped this month.

Upgrade to Grid Brief Premium to get extra deep dives into energy issues all over the world.

Conversation Starters

• Poland plans its coal phaseout. “Poland plans to set an end date for coal-fuelled power, the country's Secretary of State for Climate Urszula Zielinska said on Monday, marking a shift from the previous government's stance on climate change. Poland's October 2023 election ended eight years of Law and Justice (PiS) party rule, and led to a new government that Zielinska said was increasing environmental efforts - including a phase-out date for coal power,” reports Reuters. "‘Only with an end date we can plan and only with an end date industry can plan, people can plan. So yes, absolutely, we will be looking to set an end date,’ she told reporters in Brussels. Poland gets around 70% of its power from coal, the most CO2-emitting fossil fuel, although it has increased wind and solar generation in recent years.”

• A large copper supplier increased its price projections. “Top copper supplier Chile raised its price projections for the metal based on the prospect of easing of credit conditions in the US and growing demand in the shift away from fossil fuels,” reports Bloomberg. “State copper agency Cochilco said Monday it expects prices to average $3.85 a pound this year, up from a previous call of $3.75. It sees prices averaging $3.90 next year. The metal is currently trading at about $3.78 per pound.”

• The Energy Information Administration expects the average Henry Hub price to increase to $3/MMBtu between 2024 and 2025. “The annual average Henry Hub prices in 2024 and 2025 increase from 2023 in our forecast because we expect natural gas demand growth to outpace natural gas supply growth,” reports the EIA. “Despite increased demand, our forecast prices for 2024 and 2025 are less than half the annual average price in 2022 and are only slightly higher than the $2.54/MMBtu we reported for 2023.”

  

Crom’s Blessing

Share Grid Brief

We rely on word of mouth to grow. If you're enjoying this, don't forget to forward Grid Brief to your friends and ask them to subscribe!