Texas grid officials say they are ready for the upcoming winter and in 2024 will look to expand demand response resources to further improve electric system reliability.
“We are in as good a position as we have ever been to deal with the challenges that a winter season can bring,” Pablo Vegas, CEO of the Electric Reliability Council of Texas, said Tuesday.
Vegas updated the ERCOT board of directors on winter preparedness efforts following the cancelation of a request for proposals for 3 GW of generating capacity. The RFP aimed to entice shuttered power plants to restart, to help ensure winter reliability, but only about 11 MW of demand response capacity submitted bids.
“It was quite a short period of time that the market had to respond,” Vegas said. “We decided to go ahead and cancel that RFP for capacity and lean on the significant reliability efforts that we have been taking on over the last couple of years.”
Vegas added that ERCOT officials believe there is “a significant amount of demand response” that could be used to keep the grid reliable.
“I think that there's an opportunity for us to work with the market and with the Public Utility Commission to work on defining those kinds of products that could be utilized throughout the year, not just during an extreme winter season,” Vegas said. “And so that's something that we're going to commit to do in 2024, to work with the Public Utility Commission and with the market to see what the potential is for demand response products.”
Demand response efforts will include residential and small business customers, Vegas said, along with large industrial consumers, some of whom already participate in ERCOT’s structured demand response programs.
ERCOT’s winter preparedness efforts include inspection of generation and transmission facilities for compliance with new weatherization standards. The grid operator has completed over 1,500 inspections in the last two years and has 500 more planned for this winter, Vegas said.
The PUC in 2021, following Winter Storm Uri, approved requirements for generators and transmission providers to weatherize their plants and systems. Other market enhancements include the new ERCOT contingency reserve service, or ECRS, which acts as an insurance policy to address real-time operational issues on the grid.
“This winter will also be the first winter that we're going to have ECRS in place. It's another good learning opportunity. We learned a lot this summer about how ECRS performed and the role that it played,” Vegas said.
But the use of ECRS has been controversial. The ERCOT Independent Market Monitor filed a report with the board concluding ECRS has contributed to $12.5 billion in over procurement of ancillary services since it launched this summer. The grid operator responded that this figure is “absolutely false.”
“While it is true that the average price of electricity did rise about 11% in 2023 (June through November) when compared to 2022, much of that increase should be attributed to the historically hot summer and a 6.7% growth in peak load from the summer of 2022,” ERCOT responded.
Former ERCOT Independent Market Monitor Carrie Bivens resigned as director of Potomac Economic’s ERCOT monitoring team in November, and the role is now being performed by the firm’s president, David Patton.
Patton gave his presentation to ERCOT’s reliability and markets committee, but was not called in front of the full board to discuss the findings. ECRS “has had a profound effect on market outcomes,” he said.
