Electricity Markets

ERCOT expects record peak summer demand

The Electric Reliability Council of Texas expects record peak demand and thin reserve margins this summer, making it more likely the grid operator will need to issue alerts to draw on resources such as demand response.

ERCOT, which manages most of the Texas grid, expects peak demand to hit about 74,850 megawatts this summer, assuming normal weather, according to a preliminary Seasonal Assessment of Resource Adequacy report the grid operator released March 5. ERCOT set a peak load record last summer of 73,473 MW.

ERCOT expects to have 78,150 MW to meet its summertime needs, giving the grid operator a reserve margin of 3,300 MW.

“In all of the scenarios studied, we identified a potential need to call an energy alert at various times this summer,” Bill Magness, ERCOT president and chief executive officer, said.

When ERCOT declares an energy alert, the grid operator can take advantage of additional resources that are only available during scarcity conditions. The resources include demand response, resources that are normally set aside to provide operating reserves, additional generation or imports from neighboring regions and voluntary calls for conservation, ERCOT said.

ERCOT didn’t call any emergency alerts or ask for voluntary conservation last summer, the fifth hottest in Texas. In part, ERCOT got through the summer, which included only one extended extremely hot spell, because generators responded to higher prices during peak demand periods, the grid operator said in a report on its summer operations.

The grid operator’s planning reserve margin is at a record low of 7.4 percent, ERCOT said.

ERCOT expects to issue its final summer SARA report in May.

ERCOT has more than enough resources to meet its needs for the spring, which runs from March through May, according to a final report released March 5. The grid operator expects to have 81,300 MW to meet its peak load forecast of 61,570 MW this spring.

With ERCOT’s reserve margins falling, the Texas Public Utility Commission earlier this year ordered the grid operator to make a change to its “operating reserve demand curve,” or ORDC, which will increase real-time prices when power supplies are limited.