ERCOT: Narrow reserves boost real-time prices above $700/MWh

Dive Brief:

  • The grid operator for most of Texas saw its reserve margins fall and power prices spike last week, reaching $718/MWh around 4 p.m. CDT Friday, Platts reports. 
  • Platts reported that during the spike, the Electric Reliability Council of Texas (ERCOT) was exporting a combined 800 MW to the Eastern grid over two tie-ins. 
  • ​The price spike came just 10 days after ERCOT issued its final Seasonal Assessment of Resource Adequacy report, concluding that the grid would have adequate reserves for the fall, thanks in part to recent capacity additions.

Dive Insight:

What a difference a season makes. ERCOT's most recent seasonal assessment for the fall concluded the grid serving 90% of Texas will have more than 82,000 MW of total generation capacity and a peak demand forecast of about 54,400 MW.

Around the time of last week's price spike, Platts reports total system demand was almost 62,000 MW, bumping up against about 63,600 MW of available capacity.

The tight reserve sent prices skyrocketing, a situation the grid operator hopes to avoid when cooler temperatures arrive. But peak load is risingERCOT expects it to reach 54,437 MW this fall, an increase of more than 9% over last year's fall peak load estimates of almost 50,000 MW.

In August, the grid operator set four new peak demand records in one week this summer due to high temperatures. On Aug. 10 in the late afternoon, ERCOT saw demand reach 70,531 MW and then go higher, to 70,572 MW.

In between the preliminary and final fall SARA analysis, ERCOT noted four gas-fired combustion turbine units and three wind projects began operating, adding nearly 900 MW of fall capacity to meet peak demand. The grid operator's forecast also accounts for between 13,700 MW and 19,000 MW of planned and un-planned outages, for routine maintenance ahead of more extreme winter temperatures.

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Filed Under: Generation