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Texas Summer Likely to See Record Peak Demand, Tighter Reserves, Says ERCOT

The Electric Reliability Council of Texas (ERCOT), which serves most of the state, said tight operating reserves and expected record-breaking peak use this summer could lead to requests for customers at times to voluntarily reduce power demand.

Tighter operating reserves have followed the recent retirement of older coal-fired generating units, ERCOT officials said in the final seasonal assessment of resource adequacy (SARA) for the spring season (March-May) and a preliminary assessment for June through September.

“The ERCOT market has experienced a series of new peak demand records over the last few years as Texas’ economy continues to grow at record pace,” CEO Bill Magness said. “We expect high peak demand will continue this summer.”

The grid operator manages the flow of electric power to 24 million Texas customers, representing about 90% of the state’s electric load. The ERCOT wholesale market provides financial incentives for generators to be available when demand rises, and for retail electric providers to prepare for price fluctuations.

Voluntary load reductions are anticipated this summer. ERCOT also expects to see an increase in power sold in the market by industrial facilities in response to higher power prices during peak demand.

“At ERCOT, our focus this summer will be on performance,” said Magness. “We expect everyone involved in the electric business in ERCOT, including ERCOT as the grid operator, along with the generation and transmission owners, retail marketers and those involved in demand response will be focused on maximizing performance as well.”

Total resource capacity for the upcoming summer is forecast to be 77,658 MW. The preliminary summer SARA report includes a 72,974 MW summer peak load forecast based on normal weather conditions for 2002-2016.

The latest forecast is higher than the all-time summer peak demand record of 71,110 MW set on Aug. 11, 2016.

“Almost 3,800 MW in new generation resources began operating in 2017, and more than 14,000 MW of resources are planned to be in service by 2020,” ERCOT noted.

The final summer SARA report is scheduled to be released in May and would reflect the expected summer weather conditions.

ERCOT’s final SARA report for spring indicated sufficient generation to meet systemwide demand “under a range of extreme system conditions.” The adjusted spring peak load forecast is expected 59,477 MW.

The SARA report is based on an assessment of generation availability and expected peak demand conditions at the time it was prepared. The assessment takes into account expected generation outages that typically occur during each season for routine maintenance, as well as a range of generation outage scenarios and weather conditions that could affect seasonal demand.

“The Public Utility Commission of Texas (PUC) continues to closely monitor the forecast for electricity supply and demand for this coming summer,” said the regulator. “As expected, the decisions of generation owners to retire several large coal-fired power plants has significantly reduced the excess supply of electricity that the ERCOT power region has enjoyed over the past five years.”

Although this summer is expected to be tighter than in recent years, PUC said ERCOT is designed with several mechanisms and tools to incentivize increases in supply or temporary reductions in demand to maintain the reliability of the system.

“These tools include programs operated by ERCOT, retail electric providers and distribution utilities that compensate customers who can temporarily reduce their demand or operate their own generation if outages of large power plants occur during extreme weather conditions,” PUC noted.

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