- The Electric Reliability Council of Texas (ERCOT) could head into next year's summer season with the slimmest reserve margins ever, according to the grid operator's December Capacity, Demand and Reserves (CDR) Report, released yesterday.
- For summer 2019, the margin is projected to be 8.1%, a 2.9% drop from the May CDR report that ERCOT attributes to canceled generation projects and growing demand from oil and gas operations in West Texas. The grid operator has faced questions about the possibility of blackouts, and officials say that will likely hinge on the summer weather.
- ERCOT set its current system-wide peak demand record of 73,473 MW in July as temperatures soared. But the lights stayed on thanks to a mix of actions on both the supply and demand side, and grid officials say the same coordination will be necessary for summer 2019.
Heading into the 2018 summer with a slim reserve margin, ERCOT officials warned they could not guarantee rotating outages wouldn't be necessary at times. The grid operator had not had to resort to blackouts since 2011, and managed to keep that streak alive this year as well.
But during a press call yesterday to discuss the latest CDR report, local media immediately peppered grid officials about the possibility of outages, questioning whether they could guarantee there would be no blackouts — and why they were not warning of the possibility.
The projected 8.1% planning reserve margin is the lowest ever, officials acknowledged on the call. But they also noted that there are two more assessments of ERCOT capacity between now and the summer demand season, and intangibles may play the largest role in whether the lights stay on.
"Certainly with a declining reserve margin there is a greater risk we would enter into an emergency situation," said Pete Warnken, ERCOT's manager of resource adequacy. But ultimately, "it depends on the weather. ... we really just don't know what's going to happen."
"Does that scare you?" a reporter asked during the press call, "Are you more worried now than you were a year ago?"
The ERCOT market "has experience with these cycles of retirements and resource investment," Warnken responded.
"What we're encountering now is really nothing new," said Warnken. "We certainly have tools in place to make sure we can maintain a reliable system."
ERCOT says peak load forecast for summer 2019 is expected to be 74,853 MW — about 650 MW higher than what was reported in the May CDR.
The decline in power reserves is primarily driven by a higher summer peak load forecast and planned generation projects that have been either canceled or delayed.
Since the May 2018 CDR report there have been about a dozen generation delays or cancellations, according to the grid operator. Cancellations include three planned gas-fired projects totaling 1,763 MW and five wind projects totaling 1,069 MW. There are also more than 2.4 GW of solar, wind and gas projects that have been delayed.
Higher summer peak demand is being driven by oil and gas development in West Texas. ERCOT says the annual growth rate in that region is projected to be around 8% through 2023, while the annual system-wide load growth rate is expected to be 2% during the same timeframe.
Planning reserve margins are expected to increase to 10.7% in 2020 and 12.2% in 2021, before declining again. Since the May CDR, ERCOT has approved 1,714 MW of new generating capacity for commercial operations and in total more than 7.4 GW of installed capacity became eligible for inclusion in the CDR.
ERCOT's next Seasonal Assessment of Resource Adequacy will be released in March, and the mid-year CDR report will be released in May.