How to Make the Grid Secure

LCG March 1, 2021--February’s winter weather has brought a new level of uncertainty to the Texas grid, on top of rapid renewables growth and hot summer weather. Not only did the blackouts solidify the need to plan for extreme weather in winter and summer, but they also brought Texas residents, the governor, and the legislature into a public conversation about demand-supply planning.

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Long Ridge Energy Announces Plans to Allow Transition to 100 Percent Hydrogen

LCG, March 4, 2021--Ohio's Long Ridge Energy Generation is retrofitting its 485-MW combined-cycle power plant to use a blend of natural gas and carbon-free hydrogen, making it the nation's first large gas turbine plant to transition operations to hydrogen fuel.

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Industry News

Weather Derivatives See Growth in Volume

LCG, June 6, 2003--While the typical values of weather derivative contracts are typically one-third what they were a couple of years ago, the number of such deals has increased to approximately three times the volume seen a year ago, according to a recent study by PrcineWaterhouseCoopers for the Weather Risk Management Association.

The Chicago Mercantile Exchange handled 7,000 weather transactions based on its weather derivatives contract, with Wolverine Trading acting as market maker. Typically, conditions that determine which participant pays the other are either temperature, precipitation, wind or sun exposure. For example, a farmer whose crop might suffer from extreme heat might be paid by a counterparty such as a natural gas trader who can make higher profits when more air-conditioning is needed. The payment would be reversed if conditions were cool rather than hot.

Whereas many of the most active participants in weather derivatives used to be trading enterprises, they have since been supplanted by regulated utilities and banks.
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