ERCOT Board Approves Higher Reserve Margin Target

ERCOT's board of directors has endorsed a new target reserve margin of 13.75 percent, up from 12.5 percent which has been used since 2002, in ERCOT's reporting of capacity, demand and reserves.

ERCOT's next capacity, demand and reserves forecast will be the December update of the May summer assessment, which showed summer reserve margins above 13.7 percent through 2014, but dropping to 12.9 in 2015.

The new 13.75 percent target reserve margin was recommended by the Technical Advisory Committee, based on ERCOT staff's update of the loss-of-load events study, an analysis to quantify the impact of system volatility on reserve levels and reliability.

The analysis recommended using 12.2 percent of installed wind capacity for the reserve margin calculation since wind is variable, but board members endorsed the Technical Advisory Committee's recommendation to keep the wind load-carrying capability factor at the current level of 8.7 percent.