NAEMA Fall 2013: Industry Discussion, Political Excitement, and More

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Source: ZE

ZE has been attending semi-annual NAEMA conferences for many years and has been an associate member for the last five years. Both of our organizations have grown in size and geographical coverage over this time. ZE has turned from a small Canadian consulting firm into the global leader of data management solutions; ZE now has offices not only in North America, but also in Europe and Asia. NAEMA has changed its name from Mid-Continent Energy Marketers Association to North American Energy Markets Association to accommodate for the growth in its members. And now, finally, both of our organizations are crossing paths on a very exciting occasion: ZE is hosting the next NAEMA conference to be held in Vancouver, BC, Canada.  (Check out a video preview of the upcoming conference and what else you can see when you experience the event next year.)

Meanwhile, the Fall 2013 conference in the U.S. capital was anything short of notable, especially in terms of the social activity I signed up for; which turned out to be rather unorthodox. First of all, the time of the conference overlapped with the U.S. government shutdown. One of the spillover effects was the temporary closure of all national museums and monuments (the most disappointing news for me). Our Smithsonian’s tour was replaced with the city tour, which became the most striking tour I’ve been on – ever.

Source: ZE

To start, we toured around several monuments to meet very nice and polite guards preventing public from entering the sites and read signs ornamented with cheerful yellow tape sending a very clear message to those who did not get it: “Do not enter”. The landmark which was open for public was Arlington cemetery (kind of gloomy and somewhat ironic). Then on Capitol Hill we finally had an opportunity to catch a glimpse of demonstration of American freedom of speech. My expectations of angry protestors demanding Congress to do their job and stop holding Americans hostage of the lawmakers’ inability to compromise and negotiate were crashed: just a handful of citizens reluctantly wondered around without much enthusiasm. However, just five minutes after observing those rather jaded protesters we got caught into the whirlpool of screaming and running away from the site guided by the heavily armed uniformed men who responded to the shooting incident near Capitol Hill.  In a nutshell, the Washington city tour was very educational, maybe just not so much from the point of history or architecture.

After the dust had settled from the earlier tense events, the conference continued and, similar to all NAEMA conferences, the covered topics remained very insightful. It started with the presentations on the issues most frequently raised by those involved in the power markets. The topic hitting news front pages for the industry, coordination between natural gas and electricity markets, was discussed by M. Gary Helm from PJM. According to Helm, the natural gas consumption by the electric power sector increased from about 5 Tcf in year 2000 to 9 Tcf in 2012 – and, is expected to continue it continual ascend up into the 40s. PJM is well positioned to accommodate for this growth with shale gas plays situated in the PJM area, multiple gas storage facilities, and major gas pipelines running through the region. PJM is putting a lot of efforts in capitalizing on this factor.  According to the ISO’s projections, installed capacity of the coal power plants will decrease over the next four years by almost 20 GW being offset by natural gas capacity and demand response measures. In fact, the capacity of natural gas generators sitting in the interconnection queue now comprises 82% of the total generation base remaining in the waiting line. (To read more about U.S. coal, see our blog, A Farewell to Coal Power in the United States?)

With all these factors  and the addition of  load forecasts being revised down over the last three years, one positive news item for consumers is a continued downward trend in spot power prices. However, the issue of growing co-dependence of the natural gas and power industries with their differing processes, procedures, and planning practices, is becoming critical for the region.

Source: ZE

Another trend is a substantial growth of renewable generation and weather services, which usually go hand-in-hand. The conference presentation by OwnEnergy addressed issues faced by wind power generators. According to this presentation, this sector has no concerning issues. Wind provides nearly 5% of the nation’s energy today with 60GW installed as of 2012. According to the presenters, the capacity factor-adjusted cost of producing this type of power has been declining, the same as wind energy PPA prices. Costs will continue dropping, meaning that government support will not be needed. This picture-perfect view was further supported by the presentation from MDA Weather Division (MDA), which expanded on how improved weather forecasting services serves intermittent power generation suppliers.

In addition, Travis Hartman from MDA discussed looming climate changes from a scientific perspective.  And… yes… the science says that there is an increase in the global land-ocean temperature index that (although not linear) can be viewed only on a large scale, like a hundred year timespan. I am not sure if this statement put many minds at ease, but you cannot argue with the science, at least, as long as assumptions make sense.

From ZE’s perspective, the next NAEMA conference (hosted by ZE) will unlikely  be during a government shutdown, so we won’t be able to repeat the entertainment and jokes that resulted of that contentious period. What we can almost surely promise is beautiful scenery, great golf courses, excellent industry discussion, and many other exciting things that are bound to occur at events like these. Check out the full brochure below to learn more – and be sure to register early! See you in 2014!

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