Ercot Power Supply Tightens, Raising Red Flags for Summer

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For two consecutive days last week, the Electric Reliability Council of Texas (Ercot) caught many by surprise when it issued calls for customers to conserve power, calling into question how prepared the power grid operator for most of Texas will be when it actually gets hot this summer. "Our reserve margin is at an all-time low and with all due respect, we do not have resource adequacy or we would not be getting asked to trim back usage in the spring," said Charles McConnell, executive director of the University of Houston's Center for Carbon Management and Energy Sustainability. "This has been discussed as problematic for the last five to seven years and the piper is now calling," McConnell told Energy intelligence. "We have waited for a crisis to create movement, so we will be late in addressing it and will suffer. But policy is often lagging and often only motivated by crisis." McConnell has long criticized Ercot market structure for shutting down much of the state's reliable baseload coal power plants and making it nearly impossible to fund new baseload gas plants (NGW Sep.9'19). Instead, Ercot rules -- which only pay generators for power they sell into the grid not for being available -- favor the cheapest power, i.e. wind and solar generation, he says. That growing reliance on wind paid off in spades last month when wind produced some 38.6% of Ercot power, besting gas' 30% (NGW Apr.12'21). April, which is usually windier than March, was expected to continue that trend, but last week renewables underperformed. Grid conditions tightened Tuesday with 25%, or 33,000 megawatts, of Ercot power generation off line. Scarcity wholesale power pricing was invoked sending prices soaring as high as $2,000 per megawatt hour, up from the $20s/MWh earlier in the day. Prices are capped at $3,000/MWh. Ercot's daily outlook for Wednesday showed demand expectations dipping into the reserves power pool just after noon. Ercot did not have to institute emergency conservation measures on either day. As for the impact of lagging wind and solar power, neither could be ramped higher as the system grappled with higher-than-anticipated power plant outages. As temperatures climbing into the upper 80s and 90s increased cooling loads across the Lone Star State, the state’s grid manager called on power customers to conserve energy on Apr. 13-14, far too early in the year for comfort, critics maintain. On Tuesday, Ercot Vice President of Grid Planning and Operations Woody Rickerson said seasonal maintenance is essential and when unplanned outages crop up, tight grid conditions will arise when "combined with low wind and solar output forecasted for today." According to reports, solar farms were producing 3,000 MW less than expected due to cloudy conditions and wind farms generated 3,000-4,000 MW less than usual over the two-day period. But spring tightness is not a sign of summertime problems, Ercot maintains. The grid operator anticipates there will be nearly 87,000 MW of resource capacity available this summer, with the reserve margin reaching 15.5% by summer, up from 12.6% in 2020. Ercot anticipates a summer 2021 peak of 77,144 MW, which would exceed the current record of 74,820 MW set on Aug. 12, 2019.However, recent summers have shown the reserve margin built into the Ercot system can be taxed during major heat waves, when its wind component falls off in the heat and other sources of power see unplanned outages. Tom Haywood and Lisa Lawson, Houston

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