Dive Brief:
- Six Texas generation facilities supplying 2,900 MW of power tripped offline, leading the state's grid operator on Friday to call for conservation over the weekend amid "unseasonably hot weather driving record demand" for electricity.
- Ultimately the lights stayed on, and the Electric Reliability Council of Texas expects more resources available Monday to meet an expected peak demand of almost 72 GW. However, the grid operator's Seasonal Assessment of Resource Adequacy for this spring had anticipated peak demand of only 64,729 MW.
- More renewables, efficiency, demand response and storage resources could help meet growing power demand, say experts. And the Public Utilities Commission of Texas continues to work on overhauling market rules to ensure reliability.
Dive Insight:
Officials from ERCOT and the PUCT met Friday with Texas Gov. Greg Abbott, R, shortly before the grid operator issued its call for conservation around 5 p.m.
"ERCOT continues to work closely with the power industry to make sure Texans have the power they need," the grid operator said in a statement. It gave no details on the half dozen offline plants, which resulted in the loss of approximately 2,900 MW.
"At this time, all generation resources available are operating," ERCOT said. It asked Texas residents to "conserve power when they can by setting their thermostats to 78-degrees or above and avoiding the usage of large appliances" from 3 p.m. to 8 p.m. during the weekend.
Temperatures in parts of the state were expected to reach almost 100 degrees over the weekend. Temperatures in Austin are forecast to reach 98 on Monday, according to Weather.com, and ERCOT is forecasting peak load of 71,932 MW for the state.
But the grid operator anticipates up to 77,000 MW available at the system peak in the later afternoon.
"The failure of the grid and skyrocketing energy bills well before peak summertime demand is a preview of what’s to come if Texas continues to invest in more unreliable fossil fuel assets," Octopus Energy CEO Michael Lee said in a statement. The company is a retail supplier of renewable power in Texas.
Lee noted that Texas has seen its population grow in recent years and new businesses are driving higher demand. Texas could see 5,000 MW of new demand from crypto mining by 2023, according to miners in the state.
"The limited energy capacity amid high heat underscores how the snail’s pace at which new power plants are being built makes it impossible to accommodate the increased energy demand," Lee said. Additional solar and storage could help address grid constraints, he added.
Other experts point to energy efficiency and demand response.
"I remain very concerned about this summer," energy analyst and Stoic Energy President Doug Lewin said in a tweet.
I remain very concerned about this summer. W/out more storage & demand response (which could *still* be ramped up in time for August), if temps are ~110 in multiple load centers (not unimaginable given we’re ~100 in May), we could have serious problems. #txlege #txenergy
— Doug Lewin (@douglewinenergy) May 15, 2022
The American Council for an Energy-Efficient Economy last year identified seven residential energy efficiency and demand response programs that could lower summer peaks in Texas by 7,650 MW and winter peaks by 11,400 MW. Those load reductions could eliminate the need for new gas generation, the group concluded.
Lewin said in another tweet that the Texas grid could see more generating resources continue to fail because ERCOT and state regulators are taking a “conservative” approach to management. That "means forcing thermal plants to be ready to run more than they would have in past years," he noted, while potentially raising costs $1 billion annually.
Since Winter Storm Uri, ERCOT has managed the grid with a larger reserve margin. Independent Market Monitor Director Carrie Bivens told lawmakers in March that additional reserves required by the strategy added $300 million to $400 million to customer bills in the latter half of 2021.
Larger margins have been achieved in part through reliability unit commitments, or RUCs, which the grid operator uses to compel generators to be ready. At Thursday's PUCT open meeting, Commissioner Lori Cobos asked ERCOT for a report on which units were being RUC'd and what cost optimization efforts are in place.
"Reliability is paramount, but the impact of ERCOT's actions on consumer costs is also a very important factor to take into consideration," she said. "As a general strategy, ERCOT should be looking at the entire generation fleet to more cost efficiently select units to RUC."
Power prices on Friday reached $4,000/MWh across ERCOT, and in the Houston area topped $5,000/MWh, Bloomberg reported.
