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TIEC: New Generation Being Built in Texas Belie Claims of Impending Disaster
"Despite the claims of a few incumbent generators, there is no impending disaster or reliability emergency requiring radical action," Texas Industrial Energy Consumers said in comments to the Public Utility Commission of Texas.
"Since the Commission began addressing resource adequacy concerns two years ago, more than 5,000 MW of new generation has been added to the resources included in ERCOT's Capacity and Demand Report (CDR). In addition to the well-publicized Panda plants, which add roughly 2200 MWs of efficient gas-fired generation, recent CDR Reports also include new thermal generation projects by NRG, Calpine, Golden Spread, LCRA, and others totaling 1,649 MWs. This does not even include the significant amount of renewable generation (wind and solar) that has been added to the CDR Report since May of 2012," TIEC reported.
"And this is just the tip of the iceberg," TIEC added. "Public announcements and greenhouse gas (GHG) permit filings reveal that GDF Suez is constructing 134 MW of uprates, Invenergy is planning 330 MWs of peaking capacity, Southern Company is planning a 530 MW combined-cycle plant, MinnTex is pursuing 650 MWs of peaking capacity, Indeck is planning 650 MW of peaking capacity, STEC is constructing 225 MW of peaking capacity, Frontera is constructing 45 MW of uprates, and Tenaska and the Brownsville Public Utilities Board (BPUB) are jointly developing 800 MW of combined-cycle capacity in South Texas. These projects alone would add more than 3,500 MW to ERCOT's resources. While TIEC acknowledges these projects may not all be constructed, conservative projections that account for all available resources (including mothballed generation) indicate that ERCOT would not fall below the current 13.75% target reserve margin for many years."
"In addition to new generation, new demand response capability has also developed through new REP offerings and inventive new demand response products that complement the energy-only market design," TIEC said.
"Recent advancements in market-based demand response for smaller customers are a significant step forward in ensuring resource adequacy," TIEC said.
"REPs are developing time-of-use products and other products that allow residential loads to be curtailed. 'Passive' demand response capability (i.e., customers curtailing usage on their own in response to high prices) is also increasing as the higher SWOCs take effect. This type of market response can be expected to continue as the ORDC is implemented and the SWOC continues to increase over the next two years, providing further incentive and opportunity for loads to respond to prices. While the precise quantity of new demand response is difficult to calculate because it is not subject to the same registration requirements as generation, these new developments demonstrate that loads are responding to the Commission's market design changes," TIEC said, which also noted CPS Energy's recently developed residential load aggregation which will be offered into Non-Spinning Reserve Service.
"In short, the changes the Commission has made to the energy-only market to date are working. The Commission should not pursue any further, radical market overhauls until market participants have been given adequate time to respond to the recent changes and the impacts can be fully evaluated," TIEC said (emphasis in original).
TIEC said that, "[m]andating a reserve margin is unnecessary, inefficient and misleading."
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September 24, 2013
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Reporting by Paul Ring • ring@energychoicematters.com
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