Texas grid operator braces for tight supply-demand balance this summer

Dive Brief:

The Electric Reliability Council of Texas (ERCOT) expects a tight supply-demand balance across its grid this summer as the oil and gas industry, along with new industrial load, continue to drive electricity demand higher.
On Wednesday, the grid operator for most of the state released its final Seasonal Assessment of Resource Adequacy (SARA) for the summer, predicting a new all-time peak demand record and the likely need to enter Energy Emergency Alert (EEA) status to maintain reliability.
ERCOT's analysis forecasts peak summer demand of 74,853 MW, which would be 1.3 GW higher than the previous peak set last July. Total generation resource capacity is expected to be 78,929 MW.

Dive Insight:

The grid operator signaled in a March report that emergency alerts may be needed during the June-September season, but the analysis released Wednesday paints a more detailed and urgent picture. ERCOT says it found the potential need for an EEA "in all of the scenarios studied for the final summer SARA."

But officials on a media call yesterday said that doesn't mean rolling blackouts would be necessary, or even likely. The grid operator can import power from outside the state and call for voluntary load reductions in times of extreme shortage, while Texas' competitive market will also lead to prices that are likely to reduce demand.

"We are confident we will be able to maintain reliability of the system as a whole," said Senior Director of System Operations Dan Woodfin. Though the grid's reserve margin is dipping down to historical lows, he said there is no indication resources available under an EEA would be insufficient.

But "with tight conditions expected this summer, consumers may want to talk with their retail provider or utility that serves them, about what they can do," Woodfin added.

ERCOT says the planning reserve margin for this summer has increased to 8.6%, from the previous estimate, due to the the expected return of a 365 MW gas-fired unit, increased output from some upgraded units and "an increase in the amount of DC tie imports, which is now based on what is expected during emergency conditions."

Looking ahead, ERCOT expects higher planning reserve margins between 2020 and 2023, as new wind and solar projects in the interconnection queue come online and are eligible to be included in the operator's Capacity, Demand and Reserves (CDR) Report.

More than 700 MW of wind and solar capacity has been approved for commercial operations since the December 2018 CDR, offering peak summer capacity of 333 MW. Another 22 distributed solar units totaling 143 MW were also added and have a combined capacity contribution of 106 MW, according to the report.