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Latest ERCOT CDR Report Shows Tightening Reserve Margins, But Above Draft Economically Optimal Reserve Margin For Upcoming Years Except For 2019

December 4, 2018

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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The Electric Reliability Council of Texas (ERCOT) today released its December Capacity, Demand and Reserves (CDR) Report, which includes planning reserve margins for the next five years.

The planning reserve margin for summer 2019 is forecasted to be 8.1% based on resource updates provided to ERCOT from generation developers. This is 2.9% lower than what was initially reported in the May CDR. The report shows reserves are expected to increase to 10.7% in 2020 and 12.2% in 2021.

December 2018 CDR 
             Forecast 
Year      Reserve Margin
2019           8.1%
2020          10.7%
2021          12.2%
2022           9.8%
2023           7.5%

A recent draft report from Brattle estimates 9.0% as the economically optimal reserve margin

The anticipated decrease in power reserves for summer 2019 is primarily driven by a higher summer peak load forecast and delays and cancellations of planned generation projects.

"ERCOT’s ability to meet Texans’ growing power needs through the record-setting summer of 2018 was supported by the actions taken by power suppliers and consumers, and the policymakers who are committed to the success of the ERCOT market," said ERCOT CEO Bill Magness. "We anticipate the same type of focus on system performance as we head into another year with tight reserves."

Significant oil and gas development in far West Texas continues to drive increasing electricity demand in Texas. The annual growth rate in peak demand in West Texas is forecasted to be around 8 percent through 2023, whereas ERCOT’s annual system-wide load growth rate is 2 percent during the same time.

The peak load forecast for summer 2019 is expected to be 74,853 MW, which is 651 MW higher than what was reported in the May CDR. ERCOT’s current system-wide peak demand record is 73,473 MW, set on July 19, 2018 between 4 and 5 p.m.

Since the May 2018 CDR report, three planned gas-fired projects totaling 1,763 MW and five wind projects totaling 1,069 MW have been canceled. Another 2,485 MW of gas, wind and solar projects have been delayed.

Resources totaling 1,714 MW have been approved by ERCOT for commercial operations since the May CDR, and a total of 7,463 MW of installed capacity became eligible for inclusion in the CDR.

Link to CDR

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