Welcome to Grid Brief. Here’s what we’re looking at today: Texas’s power prices get a shock, Egypt’s gas production lull leads to blackouts, a top Canadian producer has thrown in on a Pacific LNG export terminal, and more.

Texas Power Prices Rose 800%

Triple-digit heat has swamped Texas and pushed its grid the brink on several occasions over the last few weeks.

Power prices in the state rocketed upward with the heat over the weekend. On Saturday, demand came close to breaking August 1’s 83.6 gigawatts and many expect Sunday to top it. Prices leapt more than 800% to as much as $2,500 per megawatt-hour in Saturday’s day-ahead market for Sunday due to concerns over tight supplies. Prices ebbed as the demand forecast cooled over the course of the day.

“Texans are using more electricity than ever and demand during peak hours, when grids can be most strained to meet air-conditioning needs, is rising faster than anywhere else in the country,” reports Bloomberg. “There is still concern that the grid is vulnerable to a combination of circumstances — high demand and power plant outages — that triggered blackouts during a deadly winter storm in February 2021.

The Lone Star state is set to break demand records all through this week, but the state’s grid operator indicates its supplies are ample.

Egypt: Nat Gas Drops, Blackouts Roll

As natural gas production has slipped in Egypt, blackouts have rolled through the country.

Egypt's gas production has faced a decline of 9% year-on-year and 12% compared to the same period in 2021 between January and May. Zohr gas field, which accounted for 40% of Egypt’s gas production, has seen production decrease to 2.3 billion cubic feet per day (bcfd) from 2.7 bcfd in 2019 due to water infiltration issues.

Fitch Ratings downgraded its 2023 gas production forecast for Egypt due to an anemic project pipeline and high depletion rates at existing fields. Rolling blackouts during the summer have also raised concerns about gas supply. Egypt relied on gas for 77% of its power generation in 2022.

“Electricity Minister Mohamed Shaker told local media in July that the power cuts resulted from his ministry receiving lower quantities of natural gas and fuel oil,” reports Reuters. “Prime Minister Mostafa Madbouly later denied that natural gas shortages or exports were a factor in the power cuts, and said extra mazut, a carbon intensive fuel oil the government has resorted to for power generation, would be imported.”

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Top Canadian Gas Producer Joins Pacific LNG Terminal Project

The plan for a liquefied natural gas export terminal on Canada's Pacific Coast got a big boost after Tourmaline Oil Corp., the largest natural gas producer in the country, agreed to participate in the project.

“Tourmaline said late on Wednesday that it’s joining Rockies LNG, a group of producers working on the 12 million-metric-ton-per-year Ksi Lisims project on the northern edge of British Columbia’s Pacific coast,” reports Bloomberg. “Rockies LNG’s members produce a combined 5.6 billion cubic feet per day, about a third of the country’s output. The Nisga’a Nation indigenous group and Texas-based Western LNG also are involved.”

Low prices have often troubled Canadian gas drillers because they lack export options. Tourmaline led the charge in blazing new trails to send off the industry’s output. Earlier this year, the company pioneered selling significant amounts of Canadian gas contracts for markets outside of North America.

“We are the largest gas producer and a low-cost potential supplier, and we’re investment grade,” Tourmaline Chief Executive Officer Michael Rose said regarding his company’s contribution to the Ksi Lisims project. “We’re excited, and we’re going to do everything we can to drive that project to fruition.”

Conversation Starters

• Hard times for Siemens. “Siemens Energy expects to rack up a €4.5bn [$4.95bn] loss this year as the German group struggles to fix its ailing wind turbine business,” reports the Financial Times. “The Dax-listed group warned investors on Monday that resolving issues at the wind turbine division, which has been beset by technical problems as well as the inflationary pressures afflicting the rest of the industry, will prove costlier than expected. The forecast came as Siemens Energy reported a net loss of €2.9bn [$3.2bn] for the third quarter and slashed its outlook for annual revenues. Executives had previously predicted that losses for 2023 would exceed last year’s €712mn [$783mn] loss by a ‘low triple-digit-million’ amount.”

• France has become Europe’s top energy exporter. “France has overtaken Sweden to become Europe’s top net power exporter, while Germany has moved from exporter to importer during the first half of this year,” reports Bloomberg. “France’s total net exports amounted to 17.6 terawatt-hours, with most of the power flowing to Great Britain and Italy, according to a report from EnAppSys Ltd. that laid out imports and exports. French nuclear output is a cornerstone for Europe’s electricity market, even though it’s hovering around 50% of capacity. Its nuclear stations continue to be crucial to the market despite outages and high output from renewable sources such as solar, which has been highly productive as heatwaves have ripped through many parts of southern Europe this summer.”

• India’s oil consumption: 📈. “India’s oil consumption jumped by 10% year on year in the fiscal year 2022/2023 ended on March 31, and demand has been growing in the new financial year, too,” reports Oilprice.com. “Consumption of petroleum products in the world’s third-largest crude oil importer increased by 10% to around 223 million tons in 2022/2023, Minister of State for Petroleum and Natural Gas, Rameswar Teli, wrote in a reply to a question in Parliament, as carried by Indian media. Strong economic growth, an increase in vehicle sales, and growing industrialization and urbanization led to the higher demand for fuels, the minister noted.”

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