ISO New England And Dual-Fuel Units -- February 6, 2021

ISO New England.     ISONY.      ISO California.   ISO Price California.     ISO Australia.  

ERCOT TX.    ERCOT Hourly Loads 

A reader asked a very interesting question about ISO NE and dual-fuel units. In the process of that discussion, the reader found an answer to his own question. 

Link here. Flashback: from January 2, 2018. Archived.

New Yorkers and New Englanders are cranking up their thermostats to stay warm amid an extreme cold snap, but New England's grid overseer and its generators are finding that dual fuel generators are burning through not only needed wintertime oil supplies but also emissions allowances for the rest of the year.

ISO New England spokesperson Marcia Blomberg said the regional power system is operating under normal conditions but the extreme cold weather is increasing demand for natural gas for heating, creating pipeline constraints, driving up natural gas prices and causing dual-fuel generators to switch fuels. As a consequence, oil- and coal-fired power plants are generating much more power than usual and wholesale power prices have soared.

As of 10:30 a.m. on January 2, 2018, 34% of New England's electricity was being supplied by oil-fired generation (which over a given year supplies less than 1% of the region's generation), followed by natural gas at 25%, nuclear at 23%, renewables at 9%, coal at 6% and hydro at 4%.

Of the renewable generation, 62% of it was supplied by greenhouse gas-emitting wood-, refuse- and landfill gas-fired generation, with wind supplying 38% and solar less than 1%.

According to data from SNL Energy, ISO-NE's internal hub clocked a day-ahead power price of $210/MWh at peak on Jan. 2, up from a December 22, 2017, peak of just $66.25/MWh.

Much, much more at the link.

Sophia, Part 2 -- February 6, 2021

Sophia, Part 1. 

Sophia, in a nutshell:

Sophia's software -- her computerized AI -- is not static. The software is dynamic and will change, it will be updated, as Sophia matures. To the extent possible, the software will be updated by ever-evolving software. Human engineers will step in only if there is a technological glitch. Think of HAL in 2001: A Space Odyssey

She will incorporate the entire Encyclopedia Brittanica the day she is "born." She will have the most sophisticated search engine. She will be able translate any language in real time and reply back in any language.

She will have immediate access to every piece of art. She will have the entire library of music at her disposal. She will have immediate access to every quarterly report of every company in the world. She will have access to all current research in any scientific journal. It's possible that experts in every discipline will be allowed to feed her information even before it's published in peer-reviewed journals.

So, with all that, you can imagine of what she will be capable.

There is one thing, above all else, that will be most important, and it's very simple to articulate. Actually two things, the second naturally follows the first.

Then this, from part 1: 

There is one thing, above all else, that will be most important, and it's very simple to articulate. 

Actually two things, the second naturally follows the first. I'll talk about that later but this is to give you an idea what this is all about. 

But to give a hint: think of two human chess players. One has access to Sophia; the other does not. What is the most important thing Sophia can provide her chess partner?  It's not a perfect analogy but it's the best I can do with a not-ready-for-prime-time reply. 

At a more sophisticated level, let's say Sophia is asked to participate in developing a new vaccine. What is the one thing that she can provide that the rest of her human team cannot provide? 

Now to answer that question: this is what I think Sophia/AI gives us. True AI should not be trapped by group think. 

 

As important as that is, I think the most important thing about Sophia/AI is this: Sophia/AI will ask the question that humans are not asking. One won't answer a question if it's not asked, but most importantly, the "right" question must be asked. 

This takes me back to that famous press conference with Donald Rumsfeld: 

AI should help us with the "unknown unknowns."

To take an example.

A reader and I had a sidebar conversation regarding Covid-19, the vaccine, and variants. 

Along the way, the reader wrote:

At first I looked at it as just a stronger version of the flu… And it essentially still is, however there is a random element to this bug that hits one person hard and hits another easy so until you catch it you don’t know how your body will react. 

Obviously those that have medical issues or in an older age bracket are more susceptible but it can hit a healthy 40-year-old just as easily and take them out so it is this randomness that I think is the most perplexing. 

But what I am most concerned about is the ease that this virus can mutate, seemingly more easily than other viruses can mutate, and it is just a matter of time before we get a version that is much more deadly. So that is the race we are in as I see it.

My reply:

Yes, the question not being asked/explored enough: why is there no talk of chickenpox / measles / mumps / rubella variants when it comes to our vaccines and yet variants within the SARS family seems to be the norm?

Sophia/AI will help us with this. Sophia will help us with the "unknown unknowns." Before we can solve a problem, the right question must be asked, and the better framed the question, the better.

2021: Themes, Trends And Time Running Out -- February 6, 2021

The Bakken, of course, is what this blog is all about. But to keep me from getting bored and to put the Bakken in perspective, the blog is peppered (highly peppered for that matter) with non-energy-related items.

During the Bush, Obama, and Trump administrations, I was focused on politics to a great extent. Now that I am well into the winter of my life, metaphorically speaking, I am less interested in politics (what comes around, goes around; nothing new under the sun; to the winner goes the spoils) and am turning to investing. 

Along that line, there are two blogs within the blog that I now update fairly regularly: the "Investors" page; and,  "Themes - 2021."

Bonds and interest rates have never really interested me, with regard to studying and/or investing (at my peril, of course). But that is changing. I'm still not interested in bonds, but interest rates are now back on my radar scope and, it appears, back on the radar scope of a lot of other folks.

This morning, I got a very interesting note from a reader who follows this stuff a lot more closely than I do. His highly edited note from earlier today:

30-year-Treasuries on election day, 2020, were  1.60%. Today, only three months later, the rate is 1.97%. 

Although 2% is still very low compared to the last forty years, this 30-year-T-bill has increased by 18%.   

The reader does not expect a replay of what we saw in the 1980s but even a move of 2.5% or 3% in the next year or so would be a huge move. The reader suggests that this makes "inverse bond ETFs" very, very attractive, if I'm reading him correctly.

But this is what really caught my attention. The reader went on to say:

We may see many stock company mergers / buyouts. 

So, I had just filed that little nugget under "obscure/interest_rates/bonds/ETFs” -- a file is tucked away in a 2 nm x 3 nm node deep in the recesses of my left cortex that is seldom visited. 

But then this, of all things, popped up over at Argus Media from February 3, 2021: these are their six themes for 2021:

• energy transition;
• Covid-19 and the "new normal"
• the rise of digital disruption
• diversity and inclusion
• mergers and acquisitions
• evolving credit risk

Look at #5:

Uncertainty caused by COVID-19 dented M&A activity in early 2020, but the pace of deals picked up again towards the end of the year. Among financial institutions, the weakest sector in 2020 was US banks. But earnings headwinds will push banks to do deals in 2021 to gain scale.

After its initial slowdown, the technology sector rebounded strongly last year, with acquirers spending more than $600 billion on big bets in key markets such as enterprise software and semiconductors. Given the blockbuster deals announced in the second half of 2020, the momentum seems likely to roll into next year.

Thirty-year treasury history, link here. Look at this historical graph, it's not too hard to imagine 4% for the 30-year treasury before the next presidential election. 

By the way, take a look at something else on that graph. Hint: the width of the grey bars. 

PGA: Consecutive Cuts -- February 6, 2021

At this week's PGA tournament, the current record holder for number of consecutive cuts made in PGA tournaments: Rory McIlroy.

Current record, held by Rory .... drum roll ... 25.

The all-time list:

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Happy Birthday, Dad
1922 - 2018

On the day he was given this horse, his parents drove back to their farm about six miles to the south. Carl was left on his own to ride "X" back to the farm, all by his lonesome. 

I was once told, but have long forgotten, whether "his folks" had a Model T or a Model A. I would assume a used Model T. I had to look it up but the Model T production ended in 1927 when the Model A was introduced. Folks can fact check me on that.

Fascinating: When Hydro Isn't Needed, ISO NE Electricity Trends Toward $0.00 -- February 6, 2021

Link here. 

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Mission Briefing

Ringo Again -- February 6, 2021

Some time ago I posted Sina's tribute video to Ringo Starr. I went through a short "Sina phase" and moved on. Tonight, while watching random YouTube clips this one popped up (and that's why I don't mind social media tracking me -- otherwise I might never have seen this):

Behind the song:

Note: Sebastian Robertson with an Apple mouse, keyboard, and big screen iMac.

I first heard The Weight on the Rhythm, Country, and Blues VHS video. I've lost the video. If I recall correctly I bought a second copy but gave it away many years ago to a dear friend. In fact, now that I think about it, I gave my only copy to that friend, and since then unable to find another copy. I haven't checked lately whether it's available on Amazon. [Just checked: I guess it might be available.]

See also the version I first heard. Every song on that RCB video was incredible, but I do think this song was the song that blew me off my feet, as they say.