Electricity Markets

ERCOT cuts summer load forecast but says energy alerts could still be necessary

The Electric Reliability Council of Texas (ERCOT) on Wednesday reduced its peak load forecast for this summer to take into account the impact of COVID-19 but said it may still have to issue energy alerts because of expected hot weather.

ERCOT reduced its summer peak load forecast by 1,496 megawatts (MW) in its final Seasonal Assessment of Resource Adequacy (SARA) and said it now expects peak summer demand of 75,200 MW, which reflects a projected reserve margin of 12.6%.

In addition to releasing its final SARA report for this summer, ERCOT on Wednesday also released a preliminary assessment for fall and an updated its Capacity, Demand and Reserves (CDR) report.

In its preliminary SARA, released in early March, ERCOT forecast 2020 summer peak load of 76,696 MW, resulting in a projected reserve margin of about 10.6%. ERCOT noted, however, that its revised forecast is still higher than its all-time peak demand record of 74,820 MW set on Aug. 12, 2019.

The grid operator anticipates there will be sufficient generation to meet expected demand under normal operating conditions, however, extreme weather, low wind output and higher-than-normal generation outages may result in the need to declare Energy Emergency Alerts (EEAs).

Since the preliminary summer SARA was released, seven planned wind, solar, and storage projects totaling 979 MW and contributing 276 MW to summer peak began commercial operation. Approximately 411 MW of planned capacity, mostly wind power projects, that were expected to be available during peak demand hours have been delayed beyond summer 2020 due to COVID-19.

Based on the pre-COVID-19 load forecast of 78,299 MW, ERCOT said its planning reserve margin for summer 2021 is forecasted to be 17.3%, rising to 19.7% in 2022 and then decreasing to 18% in 2023. However, the grid operator noted that the longer term effects of COVID-19 on the region’s capacity outlook are still uncertain, and it will continue to monitor changes and make adjustments as needed.

Since the December 2019 CDR, ERCOT has approved 2,273 MW of new generating resources, with summer peak capacity contributions of 790 MW. New planned resources eligible for inclusion in the report since the last CDR total 6,540 MW.

Based on preliminary data provided by generation project developers, ERCOT said planned capacity additions for summer 2021 total 17,993 MW. While most of the new capacity are renewable energy projects, developers have also proposed some small, flexible gas-fired resources.

In its preliminary assessment for fall, ERCOT said the region is expected to have enough capacity to serve forecasted peak demand in October and November.

The fall SARA includes a 60,966 MW fall peak demand, which is based on average weather conditions during the fall peak demand seasons from 2004 to 2018. ERCOT said its fall SARA has been updated to reflect the impacts of COVID-19 on load and the economy.

ERCOT’s fall SARA anticipates 6,806 MW of new planned capacity will be available at the start of the fall season, including 42 MW of battery storage. Of that total, 3,155 MW are expected to be available during fall peak hours, with gas-fired units contributing 96 MW, wind contributing 1,709 MW, and solar contributing 1,350 MW.