Texas regulators voice concern over wind's impact on ERCOT market, reliability

Dive Brief:

Renewable resources, particularly wind generation, are helping Texas hold down power prices, but some regulators are concerned that the intense variability has led to corrective actions that are sending inefficient market signals.
The Electric Reliability Council of Texas last week set another wind generation record, reaching 16,141 MW at about 9 p.m. on March 31, the grid operator announced in a tweet. Wind accounted for almost 40% of total system load at the time.
Platts reports on a new "reliability desk" at ERCOT, the grid operator for most of Texas. The job function was launched in January, and aims to better predict renewable generation as well as deal with its variability.

Dive Insight:

Smoothly incorporating growing wind energy into the Texas grid is a key challenge for regulators, as the renewable resource makes up a growing chunk of the state's portfolio.

Last month, ERCOT said it had more than 82,000 MW of generation resources available to serve the expected peak demand of approximately 58,000 MW during the mild shoulder season.

The grid operator has more than 18 GW of nameplate wind resources, and could exceed 28 GW within three years, by some estimates. Wind generation has been pressuring some gas plants, cutting revenues because renewable power is dispatched first and reduces energy prices.

Platts, reporting this week on the ERCOT Board of Directors meeting, revealed the new reliability desk and also some concerns over how the grid operator uses "reliability unit commitment" dispatching to maintain reliability. The RUC structure shifts operating costs to the market, and has been increasingly used recently.

Public Utility Commission of Texas regulator Ken Anderson said at the meeting, "I view RUCs as a market failure or a failure by the operators, one or the other," according to the news site.

Reflecting the growing importance of wind energy in Texas, ERCOT's summer assessment includes scenarios that combine the forecasted peak load with low wind output. A preliminary assessment predicts peak load of nearly 73,000 MW, about 2.6% higher than ERCOT’s all-time peak demand record of 71,110 MW.

In the low-wind scenario, output level represents only 3.8% of the total installed wind capacity, compared to a historical average contribution of 19.4% of installed capacity during summer peak load hours.