Energy trader with a focus on US Power & Gas markets. Texas based
Texas, USA
Joined February 2021
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The politics of the grid, the economics of the grid, and the engineering of the grid, are three circles with very very very little overlap.
King of Power retweeted
It’s not that “*PJM’s model* is structurally anti-growth with a poorly designed capacity market”
It’s that Capacity Markets as a concept are poor market design and anti growth, period
The fact that the BRA doesn’t function at PJM scale is an artifact of a suboptimal protocol not suboptimal implementation by the grid operator
$12B of US ratepayers' money wasted on a modeling mistake
and PJM wants to do it again.
American Grid design needs an overhaul,
Why it is good to be full of cold air.
semianalysis.substack.com/p/…
Are the real time prices recently in ERCOT, given the loads, a sign of things working or things broken?
Look at European residential retail electricity rates and it starts to make sense why they don't have AC. How could you afford to run one at those prices!
This summer's hottest new novel just dropped: The 2025 ERCOT State of the Market Report. And the IMM has some dropped some heat right out of the gate:
On out of market reliability programs:
xitter.cf/i/status/2064751085974…
On the appropriate level for VOLL and ASDC design:
xitter.cf/i/status/2064752346907…
"Additionally, the VOLL underlying the ASDCs is substantially less than the VOLL implied by a
1-in-10 reliability standard. Even if deep shortages are capped at $5000, the lower segments of
the ASDCs that price shallow shortages (which are by far the most frequent)..."
"We encourage ERCOT to focus on determining why the existing market design is not producing
revenue signals that will incent suppliers to provide the reliability services covered by these out-
of-market programs and look to change the existing market so that these gaps..."
The services the IMM lists as problematic include:
-Firm Fuel Supply Service
-Emergency Response Service
-Residential Demand Response (NPRR 1296)
-Forward Capacity Procurement (NPRR 1315)
King of Power retweeted
How ERCOT looks at PJM when it hears it may be considering changing to an energy-only market.
This back and forth on whether a futures curve represents a price forecast/expectation makes it abundantly clear why it is still possible to extract alpha from these markets.
-$0.50/MWh HB_West right now and if you have a gas plant out there you're printing $50 spark spreads.
