Dive Brief:
- A summer heatwave this week drove electricity demand to a new July peak record in Texas, where 5 GW of power plant retirements in the last year have created a tight balancing challenge for the state's grid operator.
- The Electric Reliability Council of Texas (ERCOT) on Monday reached 70,587 MW between 4 p.m. and 5 p.m. — more than 900 MW higher than the peak set on July 3.
- Heading into the summer, ERCOT officials projected a 72,756 MW summer peak based on expectations for normal weather — a significant jump from the last all-time peak of 71,110 MW set in August 2016.
Dive Insight:
ERCOT knew supplies would be tight this summer, but also that sufficient generation was supposed to be available. So far, that's how it has played out. The summer heat wave stifled the region and set a new peak record for the month, but did not create cause for alarm.
"We did not issue any conservation alerts or emergencies yesterday ... So far, the system is performing as expected," an ERCOT spokesperson told Reuters.
Generation retirements have created tighter reserve margins in ERCOT, and this summer is seen as a test for the grid operator's energy-only market, which lacks a capacity market used in other regions to ensure long-term power supply.
ERCOT's final Seasonal Assessment of Resource Adequacy for this summer predicted a total generation resource capacity of 78,184 MW. The grid operator also has a summer unit outage forecast of 4,349 MW, based on data from the last three summers.
The rise in anticipated peak is driven by the state's growing economy, according to the grid operator.
Reuters reported ERCOT North prices topped $167/MWh on Monday, the highest since a January cold snap, compared with an average of around $36/MWh so far this year.
