OK, so it looks like this series on power storage has turned into a three-day rant; particularly disconcerting because it has nothing whatsoever to do with Canadian preferred shares or even financial markets in general. Sorry, guys, but in the first place it’s interesting and in the second place Assiduous Reader JP keeps sending me interesting links, unlike youse other bums, who never send me NUTHIN’.
One thing I found myself was the 2011 Ontario Auditor General’s Report on Renewable Energy:
Since the prevalence of SBG events could threaten the reliability of the electricity system, the IESO has been taking action to ease the power surplus. However, there are technical difficulties and cost implications of these actions. Among them:
- • Storing surplus power is difficult because of the seasonal nature of renewable energy and the need for unrealistically large storage capacity.
- …
…
However, intermittent renewable energy sources such as wind and solar require fast-responding backup power and/or storage capacity to keep the supply of electricity steady when the skies are cloudy or the wind dies down. The OPA informed us that because viable large-scale energy storage is not available in Ontario, wind and solar power must be backed up by other forms of generation.
…
Despite these concerns, the cost and environmental impacts of such backup generation capacity were not formally analyzed to ensure that this information would be available to policy decision-makers. We noted that:
- • Prior to the passage of the Green Energy and Green Economy Act in 2009, the Ministry did not quantify how much backup power would be required. It was not until February 2011 that the Minister issued a new supply-mix directive that asked the OPA to consider backup options, such as converting coal-fired plants to gas-fired operation, importing power from other jurisdictions, and developing storage systems. The OPA has not yet made any recommendations to the Ministry.
- • The only analysis on backup power that the Ministry cited was a study done by a third party engaged by the OPA as part of its 2007 IPSP development. The study noted that 10,000 MW of wind would require an extra 47% of non-wind sources to handle extreme drops in wind. We noted that the third party who carried out this study also operated an Ontario wind farm, raising questions about the study’s objectivity. In spite of this, the OPA and the Ministry did not confirm or update
this study’s projections and did not determine how much backup power would be required.
The only question left in my mind is: Is Ontario energy policy determined by morons, or is it determined by dolts? Never mind. Don’t answer. I don’t want to know.
Assiduous Reader JP sends me a link to a US Department of Energy report: Grid Energy Storage:
At present, the U.S. has about 24.6GW (approx. 2.3% of total electric production capacity) of grid storage, 95% of which is pumped storage hydro. Europe and Japan have notably higher fractions of grid storage. Pursuit of a clean energy future is motivating significantly increased storage development efforts in Europe and Asia, as well as the U.S.
…
In the past few years, the urgency of energy storage requirements has become a greater, more pressing issue that is expected to continue growing over the next decade:
- California enacted a law in October 2010 requiring the California Public Utilities Commission (CPUC) to establish appropriate 2015 and 2020 energy storage procurement targets for California load serving entities, if cost effective and commercially viable by October 2013 (AB 2514). In February 2013, the CPUC determined that Southern California Edison must procure 50 MW of energy storage capacity by 2021 in Los Angeles area. Additionally, in June 2013, the CPUC proposed storage procurement targets and mechanisms totaling 1,325 MW of storage. Other States are looking to the example that California is setting, and Congress has introduced two bills that establish incentives for storage deployment.
…
New capabilities of pumped hydro, through the use of variable speed pumping, is opening up the potential for the provision of additional services that may be used to assist in the integration of variable generation sources. Projects may be practically sized up to 4,000 MW and operate at about 76%–85% efficiency, depending on design. Pumped hydro plants have long lives, on the order of 50-60 years. As a general rule, a reservoir one kilometer in diameter, 25 meters deep, and having an average head of 200 meters would hold enough water to generate 10,000 MWh.
Japan is an emerging storage powerhouse:
Japan is emerging as a hot-spot for energy storage projects, as utilities and technology companies look to battery-based solutions in response to the surge in solar PV installations.
Two new battery storage projects have been announced in the past week, with Toshiba to install a 20MWh/40MW lithium-ion battery project in Tohuku, and the island of Okinawa announcing a 2MW battery storage project on Tuesday.
Japan is expected to be the largest market for solar PV installations in 2013, with around 9GW to be installed following the introduction of feed in tariffs last year in response to the Fukushima nuclear disaster.
… and Israel’s getting in on the action:
Alstom has signed two contracts totaling around €120 million1 with PSP Investment Ltd for the supply of two 150 MW pump-turbines with the associated balance of plant equipment and Alstom’s Distributed Control System (DCS) for the 300 MW Gilboa pumped storage power plant in Israel.
Alstom also signed an eighteen-year operation & maintenance (O&M) agreement, covering day-to-day operation and maintenance of the power plant. The project represents Alstom’s first entry into the Israeli hydro market and will be the country’s first pumped storage power station, Alstom already has a proven track record in the Israeli power generation market with respect to existing steam plants and gas plants.
The power plant, located 60 km east of Haifa, will be commissioned in 2018, and will increase the country’s installed power generation capacity by 2.5%. It will contribute to increasing the reliability of electricity supply and will provide an important tool to control the demand and distribution of electricity.
During off-peak hours, pumped storage uses the energy from other power stations to transfer water to a high storage reservoir. The stored water will later be reused to generate electricity to cover temporary peaks. This helps lower the overall operation cost of power production and levels the fluctuating output of intermittent power sources.
And what are we doing here in Ontari-ari-ari-owe, barely years after the Auditor-General’s report? Flywheels!
There’s nothing like a 4,000-kilogram spinning steel cylinder to smooth out the ups and downs of the power system.
At least, that’s what Temporal Power is betting on.
The fledgling firm showed off its technology to Ontario energy minister Bob Chiarelli on Wednesday.
Temporal is betting on flywheels as a solution to an increasing problem on Ontario’s power system: With an increasing amount of wind and solar power flowing onto the grid, you need systems that can counterbalance the natural ebbs and flows of renewables.
…
Temporal has an agreement with Ontario Power Generation and NRStore — a firm headed by Annette Verschuren —– for a flywheel facility to counter-balance the minute-by-minute voltage variations on the power grid.
As far as I can tell – from the DoE report – flywheels are good for conditioning power. For load-shifting … not so much.
But fear not! Time-of-Use Billing with our billion dollar smart meter programme will save us! Right? Right?
The most significant result of those presented below is that both the conventional impact analysis and the elasticity analysis report the same result for the estimated residential summer weekday On-Peak reduction, 3.3%.
The following is not a figure, it’s a table, but never mind.
| Figure ES- 12: Approximate Impact on Average Residential Commodity Costs | |||||
| Season | On-Peak | Mid-Peak | Off-Peak Weekdays | Weekend | Total Within Season |
| Summer | -$2 | -$2 | $0 | $2 | -$2 |
| Summer Shoulder | -$2 | -$1 | $0 | $1 | -$2 |
| Winter | -$2 | -$2 | $0 | $0 | -$3 |
| Winter Shoulder | $0 | $0 | $1 | $0 | $0 |
| Total Across Seasons | -$6 | -$5 | $2 | $3 | -$6 |
Turning back to finance, just as a change of pace, it seems that while Canadian household income coverage is still lousy, asset coverage is much better:
In a new report from Merrill Lynch, economist Emanuella Enenajor says Canadian consumers have been undergoing a “stealth deleveraging” – a significant reduction in debt accumulation that has largely flown under the radar because of the focus on the market’s favoured measure of household debt loads, the debt-to-disposable-income ratio. This sat at a record 164 per cent at the end of 2013 – widely seen as evidence that Canadians simply can’t break their reckless and unsustainable debt habit.
…
Statistics Canada data show that household debt growth in the fourth quarter was just 4.5 per cent year over year, the slowest since 2001. Non-mortgage debt (credit plus loans) grew just 0.1 per cent last year.The problem is, the other half of the equation has slowed as well. Disposable income has grown 4.3 per cent annually, on average, since 2010, compared with 5.1 per cent annually in the decade before the financial crisis.
…
Canadian households’ debt-to-net-worth ratio – which takes into account the value of the assets acquired with much of that debt, such as real estate, and thus may be a more complete measure of the household debt burden – has been generally declining since the recession, and ended 2013 at its lowest level since the middle of 2008. Ms. Enenajor said that while rising asset values (namely, the continued strength in the residential real estate market) have helped, the key has been the slowdown in household debt growth. People are also saving more as their borrowing has slowed.
Bloomberg has a story about how the ECB’s negative interest rates are bringing back the carry trade, but I was more interested in the gorgeous collection of trite slogans and thought-substitutes embodied in a single quote:
“The ECB has signaled risk is on again,” Eric Busay, a Sacramento-based money manager at the California Public Employees’ Retirement System, the largest U.S. public pension fund with $294 billion in assets, said in a June 6 phone interview. “People are concerned when to exit the trade and they understand the rush to exit could be crowded. But at the same time, you have to be in it to win it.”
I love it! Say it with a straight face, win a CFA charter!
It was another positive day for the Canadian preferred share market, with PerpetualDiscounts winning 14bp, FixedResets up 8bp and DeemedRetractibles gaining 5bp. Volatility was virtually nonexistent. Volume was a little above average.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
|||||||
| Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
| Ratchet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.4974 % | 2,525.8 |
| FixedFloater | 4.56 % | 3.81 % | 29,955 | 17.78 | 1 | 0.0000 % | 3,768.4 |
| Floater | 2.89 % | 3.02 % | 45,131 | 19.60 | 4 | 0.4974 % | 2,727.2 |
| OpRet | 4.38 % | -10.11 % | 26,719 | 0.08 | 2 | -0.1167 % | 2,710.0 |
| SplitShare | 4.81 % | 4.24 % | 62,170 | 4.14 | 5 | 0.1273 % | 3,118.4 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1167 % | 2,478.0 |
| Perpetual-Premium | 5.52 % | 1.43 % | 82,308 | 0.08 | 17 | 0.0532 % | 2,400.0 |
| Perpetual-Discount | 5.26 % | 5.29 % | 115,809 | 14.95 | 20 | 0.1393 % | 2,545.8 |
| FixedReset | 4.51 % | 3.74 % | 220,218 | 6.78 | 78 | 0.0765 % | 2,527.9 |
| Deemed-Retractible | 5.00 % | 1.03 % | 147,343 | 0.14 | 43 | 0.0521 % | 2,527.6 |
| FloatingReset | 2.67 % | 2.51 % | 132,919 | 3.97 | 6 | 0.1525 % | 2,483.7 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| PWF.PR.A | Floater | 1.24 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-06-10 Maturity Price : 20.40 Evaluated at bid price : 20.40 Bid-YTW : 2.59 % |
| MFC.PR.K | FixedReset | 1.77 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.75 Bid-YTW : 3.94 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| BMO.PR.T | FixedReset | 125,224 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-06-10 Maturity Price : 23.15 Evaluated at bid price : 25.01 Bid-YTW : 3.75 % |
| RY.PR.H | FixedReset | 120,030 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-06-10 Maturity Price : 23.16 Evaluated at bid price : 25.04 Bid-YTW : 3.76 % |
| TD.PF.A | FixedReset | 110,150 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-06-10 Maturity Price : 23.15 Evaluated at bid price : 25.04 Bid-YTW : 3.74 % |
| RY.PR.I | FixedReset | 82,215 | RBC crossed 73,200 at 25.20. YTW SCENARIO Maturity Type : Call Maturity Date : 2019-02-24 Maturity Price : 25.00 Evaluated at bid price : 25.17 Bid-YTW : 3.41 % |
| ENB.PR.T | FixedReset | 78,136 | Scotia crossed blocks of 35,000 and 25,000, both at 24.35. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-06-10 Maturity Price : 22.91 Evaluated at bid price : 24.30 Bid-YTW : 4.13 % |
| SLF.PR.A | Deemed-Retractible | 72,189 | RBC crossed 60,000 at 23.84. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.88 Bid-YTW : 5.30 % |
| There were 37 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| CIU.PR.C | FixedReset | Quote: 20.93 – 21.69 Spot Rate : 0.7600 Average : 0.5882 YTW SCENARIO |
| GCS.PR.A | SplitShare | Quote: 24.90 – 25.24 Spot Rate : 0.3400 Average : 0.2200 YTW SCENARIO |
| IAG.PR.A | Deemed-Retractible | Quote: 22.66 – 22.95 Spot Rate : 0.2900 Average : 0.2018 YTW SCENARIO |
| PWF.PR.K | Perpetual-Discount | Quote: 23.66 – 23.88 Spot Rate : 0.2200 Average : 0.1478 YTW SCENARIO |
| CU.PR.F | Perpetual-Discount | Quote: 22.25 – 22.45 Spot Rate : 0.2000 Average : 0.1302 YTW SCENARIO |
| PWF.PR.E | Perpetual-Premium | Quote: 25.10 – 25.34 Spot Rate : 0.2400 Average : 0.1848 YTW SCENARIO |
“At present, the U.S. has about 24.6GW […] of grid storage, 95% of which is pumped storage hydro.”
I’m not an expert in electric transmission and so may be way off base when it comes to the jargon used by the practioners, but I am always very suspicious when a rate (GigaWatts = GigaJoules/second) is used to describe a stored quantity. Seems to me that grid “headroom” would be much more appropriate than storage…
oops! read: “practitioners”
You’re quite right, it’s rather strange to talk of capacity in terms of a rate. I can only suppose they do it because they want to express everything in terms of generation power – we speak of 800MW gas plants, for instance.
But this does raise the question – which is not addressed in the DoE report – of how many GWh storage they have on hand.
It would be much more informative to quote these figures in the way that the article on Japan did:
So they’ve got 40MW all right, but only half an hour’s worth!
There’s a Wikipedia article titled List of Energy Storage Projects that gives capacities in terms of MWh.
The largest pumped energy installation in the world is the Bath County Pumped Storage Station that can produce 3000MW for ten hours!
[hat tip: Assiduous Reader JP]
a comment about hft.
earlier today a trader was bidding in a candian pref.
he had 100 shares on tor and there was 400 other shares
2 trades went off
100 sell and 200 sell both Toronto
amazing the trader got filled for 100 and the other bid got filled for 200
first come first serve.
this is not the case in usa market.
I bid today at 630am (first bid on the screen in this stock) – about 137k shares on many many trades went off and I got a total of 38 shares – yep 38 shares – an accumulation of odd lots (which isn’t supposedly legal either)
that’s the difference between Canadian and usa markets – I believe I read that Canadian markets fill the bid or offer “first” before any trade can next transact off the screen.
also a trader has done about 1.5mil shares now and he hasn’t been odd lotted even 1 time – not once.
I routinely get odd lotted on the bid and then the stock will pop (predatory probing is what its called here).
in either event – the Canadian markets are somewhat what the markets in the USA used to be – transparent (bid or offer and you get hit if you are on that venue first – its not the case here in the US)
An example of a Canadian market trade would highlight the rampant lack of transparency in the USA markets in a few seconds.
reikreik
reikreik
I believe I read that Canadian markets fill the bid or offer “first” before any trade can next transact off the screen.
Not quite right. On the Toronto Stock Exchange there is “Dealer Priority” – if Dealer A hits the bid and both Dealer A and Dealer B have bids outstanding, then it is the former that will get filled, irrespective of time priority. Time Priority applies only if it is Dealer C with the sell.
Additionally, Market Makers can elect to participate – up to about 30%, I think – in all trades executed on the quote. So if Dealer A has a bid for 1000 shares and Dealer B hits it, it might be that Dealer M (the market maker) buys 300 and Dealer A buys 700.
I routinely get odd lotted on the bid and then the stock will pop (predatory probing is what its called here).
On the Toronto Exchange, odd lots are in a separate book. The market maker fills all odd lot market orders at the board lot quote.
You may be interested in the post CSA/IIROC: Your Order is State Property.
Price-Time priority is also violated between exchanges (which is what I presume happened to you), but of course we have fewer exchanges here.
THANKS FOR THE INFO
BUT SO FAR THE TRADER IS GETTING EXCELLENT FILLS AND SO FAR I HAVENT SEE ANY PRINTS GO OFF WHEN THE TRADER IS THE ONLY ONE AT A PRICE AND THAT TRADER DIDNT GET THE FILL
SO IF HE BIDS/OFFERS SO FAR HE CAN EXPECT TO BE FILLED ON MOST TRANSACTOINS.
ILL READ THE POST AS WELL
ALSO I HAVE NOTICED SOME PRINT THRUS ON CHI (THRU TORONTO) BUT THIS USED TO HAPPEN ON USA BUT NOTHING CRAZY (DUE TO FRAMENTATION OF THE MARKETS)
SO FAR SO GOOD
TODAY THE TRADER HAD 3 DIVIDENDS
1 LONG BAM.PR.P , 2 LONG DRM.PR.A 3 SHORT HSB.PR.E
OF COURSE EX DATE IS 6/11 – IS THERE A SITE TO FIND PAY DATE? OR IS THIS DATE SPECIFIED IN THE PROSPECTUS?
OR I GUESS HE MIGHT SEE THEM ON HIS CLEARING IN DIVIDENDS RECEIVABLES BUT NOT SURE SO FAR WTIH THIS SET UP.
THANKS FOR THE HELP
OF COURSE EX DATE IS 6/11 – IS THERE A SITE TO FIND PAY DATE? OR IS THIS DATE SPECIFIED IN THE PROSPECTUS?
Your best bet is the company websites – for instance BAM.PR.P, DRM.PR.A and HSB.PR.E.
ANY IDEA WHAT THE DURATION AND PREF RATTNG FOR ZPR MIGHT BE?
REIKREIK
BEEN LOOKING FOR A HEDGE JUST IN CASE AND I SEE THIS ONE.
SO FAR I SEE THE TOP 5 HOLDNGS BUT AM STILL LOOKING FOR ITS FULL FACT SHEET TO FIND ALL THE STOCKS THAT MAKE IT UP.
REIKREIK
6/30 for bam and hsb and drm ha ha who knows so far but ill dig
thanks reikreik
ANY IDEA WHAT THE DURATION AND PREF RATTNG FOR ZPR MIGHT BE?
That’s an immense calculation. I did it for the December 2012 edition of PrefLetter, but that will be long out of date.
You have to download all their holdings into an Excel Spreadsheet, translate their descriptions into tickers, download rating and duration information from HIMIPref™, put that into the spreadsheet and then fiddle until you get reports formatted the way you want them.
so you need a good bottle or two at your side and even then it might take longer
ill just watch how it reacts and use it small now and then.
thanks
reikreik
so today dc.pr.b had a dividend and its adjusted the closing price and its up about 20 to 25 cents on the adjusted close
but several places said that aim.pr.a has a dividend today
Dividends AIM.PR.A
Declared Date 05/13/14
Ex-Dividend Date 06/12/14
Latest Indicated Dividend Amount 0.4063
Yield 6.30%
but its showing the stock down 27 cents as if it never adjusted the price and its just down on the day???
do you show aim down on the day and there was no dividend or is it really up 13 to 15 cents and it really had a dividend?
sorry for the basic question.
reikreik
do you show aim down on the day and there was no dividend or is it really up 13 to 15 cents and it really had a dividend?
According to my data, AIM.PR.A was bid at 25.75 at the close June 11 and is currently bid at 25.46; down 29 cents gross, up about 11 cents net of the $0.40625 dividend that went ex today.
DC.PR.B was bid at 25.12 at the close June 11 and is currently bid at 24.95; down 17 cents gross, up about 25 cents net of the $0.42188 dividend that went ex today.
You’ll have to check with your software/quotes provider to see whether they (i) adjust the changes for dividends [I’ve seen it both ways] and
(ii) have both dividends properly recorded.
download rating and duration information from HIMIPref™, put that into the spreadsheet
An alternative way is to create a dummy portfolio in HIMIPref™ for the index; then you get all the HIMIPref™ reporting and can download this into a Tab Delimited File for import into Excel as desired.
IT HAD TO BE A DIVIDEND – HAD A NICE BOUNCE AFTER THE DIVI THERE.
BRITAIN MIGHT BE RAISING RATES HERE TOO AFTER THE BELL
THIS COULD PRESSURE BRITAIN, CANADA (WHICH PROBABLY HAD A HIT FROM THE ALL THE RESETS BUT ALSO ITS RELATIVE TO EURO ZONE – USA SAW IT AS WELL FOR 2 DAYS – NOT TOO FAMILIAR WTIH BRITISH PREFS AS THEY ALL SEEM TO MOVE UP AND DOWN BIG AS IF THERE IS NO MATURITY AND MANY NO CALL FEAUTRES SINCE I CANT FIND ANY THAT SEEM TO HAVE SMALL MOVES UP OR DOWN.
thanks
reikreik
HEY REIKREIK,
Do you realize that capital letters is considered to be SHOUTING in the internet world?
Please tone it down.
Yes, you know I generally type in all caps, including my printouts but worked hard to type in small caps here (not because im shouting or not and certainly don’t agree that caps is shouting (its the content that matters). but ill try on this site.
imagine if Hymas typed in caps, would you evaluate his analysis any differently – if so why?
maybe we can create an app that changes all caps messages to small caps – should be worth 5 to 10 billion overnight.
good weekend.
reikreik
reikreik
REIKREIK