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Texas Energy Consultant Details Innovative Generation Development Under Current Market Design (Says Potential Market Changes _Slowing_ Development)
The following is a letter from Jeff Nottingham, an energy economist with Verdigris Energy LLC and a veteran of the ERCOT market, to EnergyChoiceMatters.com concerning recent generation development in ERCOT, and innovative technologies to reduce the cost of new build, all of which are occurring under the current ERCOT market design:
"Those of us working 'in the trenches' in ERCOT try, as we can, to catch the ongoing Resource Adequacy hearings presently occurring at the PUCT. I'm writing because it's important that your readers know what's really happening behind the scenes, out of the public spotlight
"On Friday one of Verdigris Energy's industrial clients signed a ten-year Generation and Retail Agreement with a supplier who will be placing 4.0 MW of backup generation at the customer's location. This project is one of other similar projects Verdigris Energy is presently developing, but is important because it is the first one to execution.
"This project will provide new capacity to the grid while yielding enhanced reliability and a new revenue source for my client. The project economics work under the existing market rules. In fact, my client will enjoy emergency backup generation and a share of the unit's profit without expending a dime of capital. We would love to hear from more energy buyers who would like to explore doing the same.
"We are also working with a startup generation development company who has newly patented technology expected to significantly improve gas-fired generation economics. That company is working on land-leases in Texas right now. They are confident in their ability to complete this project without any changes to the existing wholesale market design. It is a fact that ongoing debates about policy changes are making it more difficult to prepare a reliable business plan.
"While the Resource Adequacy debate continues in Austin, real projects and new ventures are emerging all over Texas to meet the need for economic and reliable power. The best thing policy makers can provide these market makers is a level playing field and rules that don't change every few years. If the market perceives a reliability problem, the market will solve it cheaper and faster than any central planning alternative devised by large-scale owners of generation."
-- Jeff Nottingham
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October 9, 2013
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Copyright 2010-13 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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