Ascend Analytics (“Ascend”), the leading provider of market intelligence and analytics solutions for the energy supply, announced the publication of its new ERCOT Market Report, Release 5.2. The most recent release in its series of proprietary power market forecasts, Ascend's updated ERCOT Market Report projects that ERCOT’s load growth forecasts are unlikely to be met due to practical limitations to supply buildout. ERCOT will ride a weather-dependent knife’s edge as tension between load growth and power supply additions bites in the late 2020s, resulting in increased electricity scarcity and heightened price volatility. 

Tension between potential load growth and the rate of plausible supply buildout will lead to a market with a very sensitive reserve margin. To help developers, financiers, and energy market stakeholders navigate the structural changes underway in the unique and rapidly expanding ERCOT market, Ascend is hosting a webinar, “ERCOT Market Outlook: Power Generation Resources, Assemble!” at 11am MT on Thursday, May 29th. In addition to exploring implications of the firm’s proprietary load growth and supply projections, which are grounded in Ascend’s Opportunity Cost Forecasting Framework, the webinar will discuss how: 

• Ascend forecasts a more moderate load forecast than ERCOT, reaching 119 GW of peak demand by 2030, far short of the ERCOT’s Transmission Service Provider-supplied demand forecast of 208 GW, and also significantly lower than ERCOT’s more conservative 138GW adjusted demand forecast. 
• New generation, led by solar and storage, will outpace load growth in 2025 and 2026 and will reduce scarcity risk until load begins to accelerate in 2027.  
• Scarcity will emerge rapidly as the reserve margin craters with load growth in 2027 and beyond. 
• On average, load growth will keep the system tight. However, tension between potential load growth and the rate of supply buildout will lead to a market with a very sensitive reserve margin. Realized load and supply being highly sensitive to weather and the rate of new capacity installation being uncertain will create boom and bust years in ERCOT. 
• Expected phaseout of the IRA clean energy tax credits will heavily slow the buildout of renewables and storage in the 2030s amid higher effective costs for clean energy. 
• 4h batteries will become more economic than 2h batteries within the next 1-2 years, as scarcity conditions become increasingly associated with empty batteries and the non-spin ancillary service hold its value longer than the saturated shorter duration ancillary products. 

"ERCOT continues to undergo rapid change, and supply additions will have a difficult time keeping up with demand growth,” said Brent Nelson, Managing Director of Markets and Strategy at Ascend Analytics. “With scarcity conditions ongoing and weather-dependent, expect a volatile market with boom years and bust years, and forward markets that reflect this asymmetric price risk. With limited supply available for new gas generation, storage is well-positioned as a capacity resource under these conditions, as long as state and federal policies remain conducive.”