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ERCOT: Reserve Margin Climbs 2% For Summer 2020 Versus 2019

2020 Reserve Margin Exceeds Economically Optimal Reserve Margin

2021 Reserve Margin Forecast Over 18%

December 5, 2019

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Copyright 2010-19
Reporting by Paul Ring •

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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.

ERCOT said that the planning reserve margin for summer 2020 is forecasted to be 10.6%, based on resource updates provided to ERCOT from generation developers and an updated peak demand forecast.

This is 2% higher than the 8.6% reserve margin ERCOT reported as it entered the summer 2019 peak demand season.

As previously reported, a Brattle report has found the Economically Optimal Reserve Margin to be 9.0%

The December 2019 CDR forecasts the summer reserve margin as follows:

December 2019 CDR
Year     Reserve Margin
2020         10.6%
2021         18.2%
2022         17.3%
2023         15.2%
2024         12.9%

For comparison, the May 2019 CDR had included the following forecast:

May 2019 CDR
Year     Reserve Margin
2020         10.5%
2021         15.2%
2022         13.0%
2023         10.3%
2024          7.8%

"ERCOT maintained system reliability through record-setting electric demand and high temperatures this summer," said ERCOT President and CEO Bill Magness. "We anticipate there will continue to be sufficient generation to meet Texas’ growing power needs."

ERCOT said that, "The ERCOT region continues to experience above-normal growth in peak electricity demand due to strong load growth in Far West Texas and along the coast where new industrial facilities are being constructed."

For 2020, the forecasted peak demand is 76,696 MW. ERCOT’s current system-wide peak demand record is 74,820 MW, set on Aug. 12, 2019 between 4 and 5 p.m.

Based on preliminary data from generation owners, new capacity additions from planned projects for summer 2020 total 7,633 MW. Based on ERCOT’s current interconnection queue, the majority of new generation projects are renewable and small, flexible gas-fired resources.

Since the May 2019 CDR report, two gas-fired plants totaling 1,227 MW have been canceled, and eight solar projects with a 1,056 MW capacity contribution have been delayed. The CDR includes a Generation Resource Scenarios tab that identifies generation units that have informally announced plans to retire. Until ERCOT receives an official Notice of Suspension of Operation from the owners, these units will continue to be reflected in the CDR.

Resources totaling 1,058 MW of installed capacity have been approved by ERCOT for commercial operations since the May CDR, and a total of 4,654 MW of installed capacity became eligible for inclusion in the CDR.

Link to CDR

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