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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.
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King of Power
2.2K posts
King of Power
@TermPowerTrader
Energy trader with a focus on US Power & Gas markets. Texas based
Texas, USA Katılım Şubat 2021
249 Takip Edilen3K Takipçiler
@JavierBlas Maybe we're just pricing in the mother of all global recessions?
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Fascinating to see where Brent and TTF are trading right now after the last 24 hours of attacks and counter attacks.
Brent is up a mere 3%, and TTF is lower than at the peak on Tuesday March 3rd.
The absorption capacity of the energy market either reflects a) a misplaced optimism in TACO, b) a market that was way looser than thought, c) all of the above plus policy actions like IEA release and gas-to-coal switching.
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@firstenercast Da Nile is a river in Egypt and a market state of mind
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@xiaowang1984 @aniruddh_mohan I think people are willing to pay for redundancy up to a point. So in that case it becomes do I pay for grid interconnection or a 2nd turbine?
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@TermPowerTrader @aniruddh_mohan Or if your byog tho expensive is faster than transmission and you no longer strictly need to pay for transmission anymore if you byog ? So why pay twice?
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There is a theory that data centers are just waiting to sign a cheque to fund huge grid projects we could not do otherwise (due to no social consensus BTW), if only we just give them some guarantees on speed/reliability.
Are they really so price inelastic? I'm curious because it does fly in the face of every project I work on, where I find sophisticated operators keenly sensitive to the sticker price and the details of how it amounted to that. I obv need to request intros to these firms with unlimited $$$!! 😅
Don’t take my word for it btw, see this from the CEO of Fervo, an enhanced geothermal startup. I daresay he has more exposure to detailed price negotiations for large loads power offtake than most of us.
We are not going to get realistic solutions by assuming a willingness to pay that does not actually exist and which does not seem to have been benchmarked to anything.
A catch all for 'data centers' anyway does not make much sense given how varied the business models are around inference vs training vs cloud, smaller vs larger operators, co-located tenants vs single facility etc etc. All these players have very different cost sensitivities which makes a coordinated investment even harder.
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@AriPeskoe @forrest_f_ Sorry let me clarify, would utilities still be able to earn an ROE if the hyperscaler is funding the project?
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@TermPowerTrader @forrest_f_ It would not affect the FERC-approved ROE.
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Dumb question here.. but what's actually stopping hyperscalers from funding transmission?
I'm sure they're willing to.
Isn't it the same issues transmission buildout always runs into? NIMBY, permitting, etc.
I'm not sure that capital and willingness is the issue here.
Shanu Mathew@ShanuMathew93
Yes, generational infrastructure building opportunity with price inelastic demand willing to underwrite or fund things for broader system needs or impact beyond their operational needs for the sake of speed & social license to operate Instead, many are arguing to build nothing or promoting a narrow set of solutions Anyone who was invested in growing the electricity system massively could’ve dreamed for years ago in terms of momentum, political attention, ecosystem commitments is here in abundance yet people are fighting over the near-term impacts vs keeping the long term vision in mind 🤦🏾♂️🤷🏾♂️ Every net zero pathway involved >2x’ing the electricity system and massive amounts of transmission infrastructure investment
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@AriPeskoe @forrest_f_ How would it impact utility ROE if it's the hyperscaler capital funding the transmission expansion?
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@forrest_f_ For regional projects planned by an RTO, it's more complicated.
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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.
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If you think the crude market is being manipulated lower I would suggest you start moving barrels. This is a huge opportunity that anyone can take advantage of today.
It's very easy.
First call your bank (JP Morgan debit card support 800-881-3166) and ask for a credit limit increase to ~$300 million.
Then get in touch with an upstream producer (EOR IR eog_ir@eogresources.com) and schedule a loading. Assuming you want size so 2 million barrels should be enough. The lifting date you can just say "tomorrow".
Finally, you just need to charter a tanker. There's no Uber for tankers yet so this might be a bit of work. If you just show up at a Clarksons office though they won't be able to turn you down.
Unless you're taking flat price risk you'll just need to hedge your exposure so you can just short like $200 million of Brent swaps on Robinhood or something.
But now you have a FOB cargo that is all yours. Just float it on water for 50-60 days ($300k/day, maybe more) and then sell it into Asia in a few months.
You'll need to find a buyer, so post an ad for your oil on Craigslist or Kijiji something ahead of time to make sure people know it's for sale.
Boom, just like that you'll have pocketed $50 million with no risk at all. It's very safe money pretty much the same as bonds.
CrudeCO77🦬@CrudeCO77
Putting aside the fact that the effects of the war to date will last several months, let's just do simple math. They're paying $150/bbl for regional crude today. That doesn't just drop in a month. You can charter a ship to take you Brent or WTI at a 33% discount price for next month? Ummm yeah... you would do that all day every day.
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@RichardMeyerDC @Rory_Johnston Sure but backwardation is just saying, "If you can hold off on consuming today, you'll get a discount." But just because July oil futures are cheaper than April doesn't mean the market thinks oil will be cheaper in July. The curve doesn't tell you when the backwardation breaks.
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@TermPowerTrader @Rory_Johnston We may be using “expectation” differently. I’m not claiming the curve is an unbiased estimate of future spot. I’m saying it is the market’s observable, traded expression of future pricing conditions.
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@RichardMeyerDC @Rory_Johnston No, it isn't. In fact the definition of Contango/Backwardation hinges on the difference between futures prices and expected future spot prices.
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@Rory_Johnston I totally agree it's not a forecast. However, it *is* a market expectation, shaped by inventory, carry, convenience yield, and risk.
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Someone is selling crude futures at scale and nobody knows who. - FT
@MarioNawfal
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@HedgeDirty Broadband trading was an idea ahead of its time
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The number of 12-figure-market-cap ideas that were first tried by Enron ten years before the bandwidth and ecosystem for them was feasible is truly staggering
2001 Live@25YearsAgoLive
Enron unexpectedly cancels its 20-year contract with Blockbuster Video. Enron shares drop 18% in just one market session.
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@xiaowang1984 Easy to do when your fuel cost is -$8/mmBTU
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@TermPowerTrader Wait I'm confused. Are you saying the gas plant is *making* money at negative market prices
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-$0.50/MWh HB_West right now and if you have a gas plant out there you're printing $50 spark spreads.
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Which of you power traders broke Claude trying to vibe code your DST scheduling?
Polymarket@Polymarket
JUST IN: Claude became confused by daylight saving time, causing an "infinite loop" bug for some vibe coders.
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@USAEnergyNatGas Load is growing faster overnight due to batteries & Bitcoin. Are you separating growth in the peak and the valley?
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I introduced the Open America’s Waters Act last year to repeal the Jones Act, which raises the cost of energy and goods on consumers.
Chucking this outdated policy would be a great step to alleviate fuel prices for American families.
Joe Weisenthal@TheStalwart
*TRUMP WEIGHS EASING JONES ACT REQUIREMENTS OVER OIL PRICE: RTRS
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Guys, let me give you a pro tip
If youre long this market, youre an idiot
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Natural gas is expensive and volatile. Utilities just pass those costs along to you. Every time a utility proposes more gas generation on the grid, they know you’ll bear those costs and they’ll reap the profits.
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