ERCOT Reports Record Electric Demand Expected This Summer; Low Risk Of Emergency Conditions Based On Expected Generation Availability & Weather Conditions -- EnergyChoiceMatters.com

ERCOT Reports Record Electric Demand Expected This Summer; Low Risk Of Emergency Conditions Based On Expected Generation Availability & Weather Conditions

ERCOT CDR Shows 2022 Reserve Margin Increasing To Nearly 29%; Exceeds 30% In Subsequent Years

May 6, 2021

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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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The Electric Reliability Council of Texas (ERCOT) said today that it is anticipating record-breaking electric demand this summer due to expected hot and dry conditions and continued economic and population growth throughout the region.

ERCOT today released its final Seasonal Assessment of Resource Adequacy (SARA) for the summer season (June – September), its preliminary assessment for the fall season (October – November) and the May Capacity Demand, and Reserves (CDR) Report.

ERCOT anticipates there will be enough generation to meet the summer 2021 peak demand of 77,144 MW. Based on this forecast, the ERCOT region will have a 15.7% reserve margin this summer season. The current system-wide peak demand record for ERCOT is 74,820 MW set on Aug. 12, 2019. One MW typically powers about 200 homes on a hot summer day.

ERCOT said that it is identifying low-probability, high-impact situations similar to the February winter event in its seasonal assessments, to ensure all market participants and government officials have a comprehensive view into market conditions. This will allow the market to more fully plan and prepare for even the most remote possibility.

Additionally, ERCOT announced plans to visit selected power plants across the state to review summer weatherization plans. While plant visits have occurred in the past for winter weatherization, this is the first time officials will visit plants for summer.

Final Summer SARA

"The new scenarios reflect ERCOT’s commitment to improve transparency and visibility into the market and the factors that affect reliability, even when there is a very remote possibility of these events happening," said ERCOT’s Vice President of Grid Planning and Operations Woody Rickerson.

"While the risk for emergency conditions remains low this summer based on many of the scenarios studied, a combination of factors in real time, including record demand, high thermal generation outages and low wind/solar output could result in tight grid conditions," said Rickerson. "We cannot control the weather or forced generation outages, but we are prepared to deploy the tools that are available to us to maintain a reliable electric system. We hope this report helps market participants prepare to assist the grid if needed."

"ERCOT introduced new, more extreme scenarios in the summer SARA, and while they are all within the realm of possibility, the grid operator believes there is a less than one percent chance that they would actually occur. For reference, based on available meteorological data, the winter storm that occurred in February was approximately a one-in-100 event," ERCOT said

"Looking ahead, the grid operator is monitoring new operational risks resulting from a changing resource mix. While tight grid conditions have historically been limited to the hours of highest electric consumption, ERCOT now sees the potential for tight conditions during low wind conditions, or during the early evening hours when solar resources come offline. As the capacity of battery storage increases in ERCOT, these resources are expected to help mitigate some of this risk," ERCOT said

"ERCOT is also monitoring current drought conditions across the state. After consulting with generators on their risk mitigation plans, the grid operator does not believe the drought poses a significant risk at this time," ERCOT said

Capacity, Demand and Reserves Report

Based on information provided by resource owners and developers, the planning reserve margin for summer 2022 is calculated to be 28.8 percent, which is up 1.5 percentage points relative to what was reported in the December CDR. The summer reserve margin calculation for 2023 through 2027 exceeds 30 percent. These figures are based on information available at the time the report was created.

The reserve margins from the May 2021 CDR are as follows:

December 2020 CDR
Year     Reserve Margin
2022         28.8%
2023         35.1%
2024         34.7%
2025         33.5%
2026         32.3%

For comparison, the reserve margins from the December 2020 CDR are as follows:

December 2020 CDR
Year     Reserve Margin
2021         15.5%
2022         27.3%
2023         27.2%
2024         26.6%
2025         25.4%

"While a higher reserve margin does reduce the risk of needing to declare emergency conditions, it does not eliminate that risk. A combination of factors during real-time operations can still result in the need to declare an energy emergency, making it important to distinguish between resource adequacy concerns and operational concerns," ERCOT said.

"ERCOT continues to see new generation resources being added to the region, including a significant amount of utility-scale solar resources. As of the end of April, utility-scale solar and battery storage projects accounted for almost 80% of the new resources being studied for interconnection to the ERCOT region," ERCOT said.

In response to data requests, the May CDR includes a new tab titled "Decommissioned Generation Resources," which lists generating units that have been retired in ERCOT. The grid operator will maintain this list in future CDRs as a historical record.

Link to CDR

Preliminary Fall SARA

Based on the preliminary fall SARA, ERCOT anticipates there will be sufficient generation to meet system-wide demand under normal system conditions and many of the scenarios examined. Based on expected fall peak weather conditions, the preliminary fall SARA anticipates a seasonal peak demand of 62,662 MW.

However, the grid may still experience temporary tight conditions if a high demand day occurs when one or a combination of the following occurs: there are significant maintenance outages, renewable energy production is low and/or there is extreme weather. See explainer document.

The preliminary fall SARA also includes a new section with more extreme scenarios for consideration. Moving forward, all future SARA reports will include this additional analysis.

Links

Final Summer SARA

Preliminary Fall SARA

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