Smartest Insight | Issue 158

Our weekly company round-up covers the key market and industry news in one place, so you don’t have to look any further to stay ahead.

March 08, 2024


Market Update:

For the week ending 3/1/2024 the EIA is expected to report a withdrawal of 37 Bcf compared to the five-year-average withdrawal of 113 Bcf. At a withdrawal of 37 Bcf the surplus to the five-year-average would increase to 554 Bcf and the very real possibility of a 600+Bcf surplus by the end of the winter. The April Nymex contract has moved higher over the last week off the news that EQT has cut production by 1 Bcf/day from the end of February through March. EQT opened the door to extending the cuts beyond March if market conditions do not improve.

This is the second production cut announcement in as many weeks (Chesapeake announced ~0.8 Bcf/day of production cuts on 2/21/2024). On the regulatory front, the 1,250-MW Champlain Hudson Power Express transmission project that plans to supply power from Hydro Quebec to NYC requested an amendment to an environmental permit. The amendment looks for clarification on the required burial depth for the line. The Army Corps of Engineers requires a 9ft depth while the state of New York requires a 15ft depth.


Regulatory Report:

Record-breaking Solar Surge in US Propelled by Policy and Growth, Forecasts Show Varied Outlooks Plans to Delay Capacity Auction

In 2023, the US achieved a record-breaking 32GW of solar installations, with utility-scale adding 22.5GW and nearly 800,000 homes adopting solar. This marked a 37% increase from the previous record, and for the first time in 80 years, renewable energy comprised over 50% of annual capacity additions. All solar segments witnessed growth, elevating total US solar capacity to 177GW. SEIA's CEO anticipatesignificantlys quadrupled solar deployment over the next decade with continued federal support. The Inflation Reduction Act bolstered solar, propelling a 89% growth in solar module manufacturing. The report forecasts US solar capacity to reach 673GW by 2034, but outcomes hinge on policy and economic factors, with optimistic scenarios boosting projections by 17% and pessimistic scenarios lowering them by 24%. Wood Mackenzie emphasizes the importance of policy and economic decisions for the future of the US solar industry.

New York Revives Offshore Wind Projects with Revised Contracts Amid Supply Chain Challenges

After facing economic challenges due to inflated supply chain costs, two US offshore wind projects, Equinor's Empire Wind and Sunrise Wind by Ørsted and Eversource, secured new contracts from New York state government. The contracts, priced at just over $150 per megawatt-hour, almost double the original rate, aim to propel these projects forward despite initial setbacks. The projects, totaling over 1,700 megawatts, are expected to create jobs, inject billions into the state's economy, and support renewable energy goals. As part of the agreements, the developers will invest in community-focused initiatives, wildlife monitoring, and US manufacturing. These contracts mark a significant step towards achieving New York's renewable energy targets and will contribute to the state's economy and clean energy transition.

National Grid Scraps Canadian Hydropower Transmission Project in New Hampshire and Vermont Despite Bipartisan Support

National Grid PLC has decided to abandon plans for the Twin States Clean Energy Link, a transmission project intended to import Canadian hydropower into New Hampshire and Vermont. The project, which would have spanned 211 miles, was deemed unviable at present. Despite being selected for investment under the Transmission Facilitation Program, created by the 2021 bipartisan infrastructure law, the project faced challenges. It entailed constructing buried transmission lines across Vermont and New Hampshire, with expected job creation during construction. While Governor Chris Sununu supported the initiative, promising energy cost reductions, National Grid highlighted potential wholesale energy market savings and bi-directional capabilities. Despite cancellation, National Grid pledged a $260 million community benefits program. New Hampshire and Vermont maintain climate action plans aiming for emission reductions and net-zero targets. National Grid expressed gratitude to stakeholders and reiterated commitment to exploring other transmission solutions. The decision contrasts with the progression of two other projects selected under the same program in Nevada, Utah, Arizona, and New Mexico.