On behalf of the team at 5, I am pleased to forward our market letter for the third quarter of 2021. World leaders convened in Glasgow on October 31st to address international commitments to lower greenhouse gas emissions. The energy market welcomed these delegates with a complex set of conditions that frame the challenge posed by the transition to a clean energy economy. These include historically high natural gas prices and significant energy shortages in several markets that moved aggressively to decarbonize their electricity grids: UK, Germany, and California. At the same time, energy shortages in China may undercut decarbonization efforts of the world’s largest carbon emitter.

On behalf of the team at 5, I am pleased to forward our market letter for the second quarter of 2021. The unusual weather that caused historic outages and extreme electricity and natural gas prices in Texas in Q1 surfaced in other markets in Q2. Both the Pacific Northwest and the Western US faced extreme weather conditions, namely, heat. In Death Valley, temperatures hit 130 degrees on July 9, a world record for the hottest reliably measured temperature in recorded history.

On behalf of the team at 5, I am pleased to forward our market letter for the first quarter of 2021. This letter focuses on the latest Black Swan event, Uri, the winter storm that hit Texas in mid-February. The storm caused a catastrophic loss of generation and triggered an extended period of extremely high energy prices. This letter provides: (i) a summary and chronology of the legal and regulatory proceedings that Uri has spawned; (ii) a snapshot of how the storm has impacted a variety of market participants including municipal utilities, wind farms, renewable purchasers, commercial and industrial buyers, and the natural gas market; and (iii) an overview of legislative efforts to address electric reliability in ERCOT.

On behalf of the team at 5, I am pleased to forward our market letter for the fourth quarter of 2020. This issue revisits the 2020 election and discusses its potential impact on energy policy. Other topics covered include: (i) key energy provisions in the Stimulus Bill passed on December 29, 2020, (ii) green hydrogen, and (iii) the continued shift in generation from coal and nuclear to renewables. We conclude by noting the dramatic spike of LNG prices in Asia, a good reminder that, notwithstanding a long period of depressed pricing, electricity and natural gas remain volatile commodities that must be carefully managed.

On behalf of the team at 5, I am pleased to forward our market letter for the third quarter of 2020. This letter focuses on the upcoming Presidential election, the confirmation of Judge Amy Coney Barrett to the Supreme Court, and the potential impact of these events on energy policy. The election and a changing court will impact how energy policy is regulated both at the Federal and the state level. Notwithstanding the perceived impact of these changes in Washington, we caution against putting too much weight on political and judicial changes. In short, it is often the case that when it comes to energy policy, economics, not politics, often prevails.

On behalf of the team at 5, I am pleased to forward our market letter for the second quarter of 2020. This letter updates our analysis of COVID-19 and its impact on energy demand. It also discusses the pandemic’s impact on state renewable goals, and how FERC’s position on several important energy policy decisions could shift depending on which party wins the 2020 presidential election.

On behalf of the team at 5, I am pleased to forward our first market letter for 2020. Since the spread of COVID-19, our primary concerns have been the safety of our team and supporting our clients. I want to give special thanks to our technology team and its leader, Matt Shaw. Matt planned and executed our multi-year effort to develop an industry leading technology solution, Level5. While we did not build this system with a pandemic in mind, it has allowed us to support clients without interruption during these difficult months. Not surprisingly, this market letter is focused on COVID-19 and its broad and evolving impact on the energy market.

On behalf of the team at 5, I am pleased to forward our market letter for the fourth quarter of 2019. Today energy deregulation is a tale of two markets. The Mid-Atlantic states (PJM), New England (NEISO) and New York (NYISO) are caught in a struggle between state regulators who seek to subsidize carbon-free generation and opponents who argue (for economic, policy, or political reasons) that these subsidies threaten the viability of a competitive market. The debate reached a crescendo last quarter when the Federal Energy Regulatory Commission (FERC) issued an order that effectively undercuts current state subsidies of carbon-free power generators.

On behalf of the team at 5, I am pleased to forward our market letter for the third quarter of 2019. This letter discusses: (i) electricity price spikes in Texas, (ii) new limits on natural gas usage in New York, and (iii) California’s continued struggle with the linkage between power lines and wildfires.

On behalf of the team at 5, I am pleased to forward our market letter for the second quarter of 2019. The beach is a great place to find some wind and not just to fly a kite. In fact, many Northeastern states are counting on offshore wind to meet their renewable generation goals. This letter reviews recent offshore wind developments and explores how realistic these projects are in light of: (i) the relatively high cost of offshore wind, and (ii) the permitting required to construct these projects and the related transmission infrastructure.