Natural gas, also commonly referred to by its chemical name, methane, is one of the single most controversial topics of the energy transition so far. On the one hand, natural gas is an energy commodity that is far cleaner than coal as a feedstock for power generation and it is a fuel for which there is no alternative in terms of its load-following characteristics. It can be dispatched on very short notice, ramp up and down quickly and easily, and can stay on-line for days on end, as long as the gas delivery network is functional (which, as we learned in Texas in February 2021, is not always the case).
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Topics: Natural Gas Sustainability Education
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“If not me, then who? If not now, then when?” Ray Anderson, Founder of Interface.
Throughout the evolution of any great company, there are hallmark moments that define each new chapter. These experiences often serve as fuel for the company’s new trajectory and become a reference point for the team’s future work and ultimate impact. Our team experienced one of these catalyzing moments in mid-November during a screening of Beyond Zero that concluded with a live Q&A with the film’s writer and director, Nathan Havey.
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The team at 5 has spent many months, complemented by countless charts, graphs, and blog posts, discussing the rising prices and volatility in the energy markets. When you spend so much time in the weeds, the bigger picture becomes cloudy. In this reflection, we step back to highlight the fundamental shift that has happened in the marketplace over the last year. Shifts of this magnitude do not happen often, perhaps once every ten years, and they need to be called out.
10 min read
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.
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On October 31, the 26th United Nations Climate Change Conference (aka COP26) will kick off in Glasgow, Scotland. This event will mark what many energy and sustainability leaders consider to be an important escalation in the global fight to reduce pollution and implement measures to address the effects of climate change. There is one developing environmental commodity, carbon offset credits, that continues to gain traction and we are excited to help clients capitalize on this new sustainability opportunity.
Topics: Sustainability Education Renewables Resiliency
3 min read
One of the most common questions clients ask when purchasing electricity or natural gas is, “How much money will this save me?” This was a reasonable question and for many years savings could be realized because energy prices had been trending lower. Figure 1 shows how the NYMEX has settled over the last 28 years. This chart shows that natural gas hit its peak in 2006 in the wake of Hurricane Katrina and Rita where gas prices approached $14/Dth.
Topics: Markets Procurement Education Resiliency
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Con Edison electricity customers have likely noticed a significant increase in delivery costs over the last 12 months. There are two specific variable components that have caused these rates to skyrocket in 2021:
Topics: Markets Procurement Demand Response Education
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Illinois Passes Nation-Leading Climate and Equitable Jobs Act
On September 15, Illinois Governor J.B. Pritzker signed historic clean energy legislation, known as the Climate and Equitable Jobs Act (CEJA). Among many things, the CEJA requires Illinois to achieve a 100% carbon-free power sector by 2045, becoming the first Midwestern state to commit to ending the use of fossil fuels.
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Have you ever believed the energy market myth that natural gas prices are always cheaper during the fall and spring?
Topics: Markets Natural Gas Demand Response Education
3 min read
Aluminum manufacturers are among the most energy-intensive industries in the world. In 2010, the process used by smelters to refine primary aluminum from bauxite ore consumed approximately 3% of the entire world’s electricity supply. The vast amounts of energy used in this process have driven many aluminum manufacturers to locate their plants in parts of the world where bauxite is plentiful and electricity is relatively inexpensive. Today, there is a new energy-intensive industry that is driving demand for more electricity supplies: cryptocurrencies. According to the Cambridge Center for Alternative Finance, Bitcoin alone, one of the most well-known cryptocurrencies, uses 110 Terawatt-hours of electricity annually, or 0.55% of global electricity supplies. The fact that cryptocurrencies can use more electricity than some small nations has motivated companies that mine Bitcoin to find host locations where electricity is reliable, plentiful, and inexpensive. Bitcoin, Ethereum, Dogecoin, and others have used record amounts of electricity this year, raising concerns around the amount of energy these monetary systems use and the amount of carbon used to supply their facilities.