Arctic blast driving up energy prices across US

The arctic freeze gripping the central U.S. has triggered rolling blackouts in Texas and is ratcheting up pressure on energy prices already trading at unprecedented levels, The Washington Post reports

The extra demand from consumers in response to the cold appears to have caught many in the regional U.S. energy market off guard, and chaos has reigned in the past few days.

Ercot is expecting power demand to hit an all-time high Monday and Tuesday, breaking a record set during a summer heat wave in 2019. “We would expect to be in emergency operations tomorrow through at least Tuesday morning,” says Dan Woodfin, a senior director at Ercot.

In the natural gas market, spot prices in some areas have also spiked to extreme levels. Prices in Oklahoma surged by more than 4,000% since Wednesday. One hub in Cheyenne, Wyoming, saw prices as high as $350 per million British thermal unit, according to traders who asked not to be identified because the information isn’t public. For comparison, a week earlier, the fuel was fetching low-single digits in both locations. 

Power plants that are only partially operating could be pinched by high prices, too. Projects that commit to provide 50 megawatts of energy in a given hour but only produce 20 megawatts may need to buy the difference at the market price, says Lee Taylor, chief executive officer at clean-energy analytics firm RESurety. Read the full story.