ERCOT Projects Lights Will Stay on in Texas This Summer
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Three months after the lights and heat went out in Texas during a February cold snap, the Texas electric grid operator projected the lights should stay on this summer. That is, unless the Lone Star State is hit with a "Black Swan" combination of higher-than-expected demand, below-average generation from renewable resources and above-average number of thermal generating units experiencing unplanned outages.
The Electric Reliability Council of Texas (ERCOT) (Austin, Texas) predicted that there was a 1% chance that all three of those events could happen this summer. Going into the winter of 2020-2021, ERCOT said its analysts thought there was a 1% chance that temperatures could fall as low as they did during this past February. But they did, triggering a cascading series of energy emergencies that temporarily shut down thousands of megawatts of electric generation, cut power and heat to an estimated four million homes and businesses, sent energy prices soaring and resulted in the death of nearly 200 people.
The crisis engulfed Texas regulators who are involved in overseeing electricity and oil and gas markets, leading to widespread resignations.
In its final assessment of this summer's electric supply and demand, released May 6, ERCOT predicted record-breaking electric demand in Texas this summer due to expected hot and dry conditions and continued economic and population growth throughout the region. The agency operates Texas' in-state electric grid, which serves more than 26 million Texans and about 90% of the state's electric load.
ERCOT said this summer's reserve margins should be about 15.7%, slightly over the industry's general rule of thumb of 15% that is followed by most market participants across the country. That 15.7% reserve margin equates to about 9,718 megawatts (MW). The reserve margin is an important backstop that keeps the lights on in case temperatures exceed forecast, or generation from intermittent generators underperforms, or there are a higher-than-expected number of unscheduled outages at power plants.
Unlike nearly every other state, Texas is not interconnected with adjacent transmission organizations. The state has limited ability to import power during emergencies.
Thin reserve margins have characterized the Texas electricity market for a few years, as coal-fired plants closed, demand rose and delays were experienced in bringing new generation online. For more on that, see May 18, 2020, article - COVID-19 Cuts Texas Summer Electric Demand by 1,500 Megawatts, May 14, 2019, article - Texans May Experience Electric Emergencies This Summer and March 5, 2018, article - Texas Faces a 'Tight' Summer, as Electric Reserve Margins Shrink.
ERCOT projected that this summer's peak electric demand in the areas of Texas it serves will be about 77,144 megawatts. It estimated its resources at 86,862 MW. These resources include electric generators as well as customers who have committed to shed load under certain conditions.
In releasing its final summer Seasonal Assessment of Resource Adequacy (SARA) May 6, the grid operator said it was "identifying low-probability, high-impact situations similar to the February winter event in its seasonal assessments, to ensure all market participants and government officials have a comprehensive view into market conditions. This will allow the market to more fully plan and prepare for even the most remote possibility."
In a statement, ERCOT added that it would, for the first time, "visit selected power plants across the state to review summer weatherization plans. While plant visits have occurred in the past for winter weatherization, this is the first time officials will visit plants for summer."
The agency said it would take other steps this summer to keep the lights on, including:
- Coordinating with Transmission Service Providers (TSPs) to limit planned outages during the summer months
- Requesting generators contact gas suppliers to identify any pipeline activities that would affect the availability of gas for their generators during the summer season
- Coordinating communications with market participants
Looking beyond the summer of 2021, the grid operator sees reserve margins fattening, as more generating resources come online. Next summer, ERCOT projected reserve margins will expand to 28.8%, and the summer after that 35.1%.
ERCOT's summer 2021 seasonal assessment of supply and demand reflects "ERCOT's commitment to improve transparency and visibility into the market and the factors that affect reliability, even when there is a very remote possibility of these events happening," Woody Rickerson, the agency's vice president of grid planning and operations, said in a statement releasing the summer 2021 assessment.
"While the risk for emergency conditions remains low this summer based on many of the scenarios studied, a combination of factors in real time, including record demand, high thermal generation outages and low wind/solar output, could result in tight grid conditions," Rickerson continued. "We cannot control the weather or forced generation outages, but we are prepared to deploy the tools that are available to us to maintain a reliable electric system. We hope this report helps market participants prepare to assist the grid if needed."
Looking ahead, the grid operator is monitoring new operational risks resulting from a changing resource mix. "While tight grid conditions have historically been limited to the hours of highest electric consumption, ERCOT now sees the potential for tight conditions during low wind conditions, or during the early evening hours when solar resources come offline," it said. "As the capacity of battery storage increases in ERCOT, these resources are expected to help mitigate some of this risk."
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