Electricity Markets

ERCOT may need to enter emergency alert status this summer

The Electric Reliability Council of Texas on May 8 said that in all of the scenarios studied for its final summer seasonal assessment of resource adequacy (SARA), the grid operator has identified a potential need to enter Energy Emergency Alert status in order to maintain system reliability.

ERCOT said that the final summer SARA report includes a forecasted peak demand of 74,853 MW, which is 1,300 MW higher than the all-time peak demand record set last summer on July 19. The SARA report covers June through September.

ERCOT notes on its website that per ERCOT protocols and North American Electric Reliability Corporation requirements, the grid operator is required to declare an Energy Emergency Alert (EEA) when operating reserves drop below 2,300 MW or system frequency cannot be maintained above certain levels and durations. There are three levels of EEA, depending on the amount of operating reserves that are available to meet the electric demand on the system.

The grid operator this week said that while operating reserves are expected to remain tight, total generation resource capacity has increased to 78,929 MW compared to 78,154 MW in the preliminary summer SARA released in March. This is due primarily to the expected return of a 365 MW gas-fired unit, increased output from certain units that are undergoing equipment upgrades and an increase in the amount of DC tie imports, which is now based on what is expected during emergency conditions.

ERCOT said that the planning reserve margin for summer 2019 has increased to 8.6% from the preliminary estimate of 7.4% based on the resource updates incorporated in the final summer SARA report.

Other grid operators release summer forecasts

Meanwhile, other grid operators are also starting to release their summer power demand forecasts.

The PJM Interconnection and the Midcontinent Independent System Operator said they will be able to meet 2019 summer demand.

PJM on May 2 said it is ready to meet demand during a summer predicted to be hotter than usual. Planners at PJM expect electricity use to peak at around 151,000 MW this summer, when the National Weather Service is forecasting above-average temperatures for almost the entire PJM footprint.

“The summer is when we see our highest electricity use, and we plan and prepare for summer operations throughout the year,” said Andrew L. Ott, PJM president and CEO.

Last summer’s peak demand was 150,830 MW, which occurred on August 28. PJM’s all-time highest power use was 165,563 MW in the summer of 2006.

PJM said it has ample resources available in reserve to cover generation that is unexpectedly unavailable or for demand that is higher than anticipated. PJM’s required reserve is 16 percent of the forecasted demand level, and this summer PJM’s expected reserve margin is more than 28 percent, or around 40,000 MW. PJM has 183,454 MW of installed generating capacity available.

For its part, MISO in late April said it has projected adequate power reserves to meet 2019 summer peak demand. The regional transmission organization expects summer demand to peak at 125 gigawatts, with 149 GW of available capacity.

Overall decreases in coal resources along with increases in demand-response, behind-the-meter generation, wind and solar resources have led to a higher base reserve margin for 2019 of 19.3 percent, MISO said.

ERCOT also releases preliminary assessment for fall and updated report

Along with the summer SARA, ERCOT also released a preliminary assessment for fall and an updated Capacity, Demand and Reserves (CDR) report.

The updated CDR calculates higher planning reserve margins between 2020 and 2023, primarily due to an increased number of potential wind and solar projects that are currently in the interconnection queue and eligible to be included in the CDR.

Since the December 2018 CDR, approximately 733 MW of installed wind and solar capacity has been approved by ERCOT for commercial operations, with summer peak capacity contributions of 333 MW. Twenty-two distributed generation solar units totaling 143 MW were also added to the report and have a combined capacity contribution of 106 MW.

Planned resources that became newly eligible for inclusion in the CDR report total 5,643 MW of installed capacity by 2023, including 517 MW of battery storage.

ERCOT said that The CDR and SARA reports reflect the anticipated resource capacity available to meet the forecasted summer peak demand. The anticipated capacity “may differ from what will actually be available based on system conditions and the operational status of the resources,” it said in a news release.

ERCOT’s preliminary assessment for fall

Meanwhile, the ERCOT region is expected to have sufficient resource capacity to serve forecasted peak demands in the upcoming fall season (October- November 2019). 

The fall peak demand forecast used for the fall SARA report is 61,034 MW. The total resource capacity expected to be available for the peak demand is 84,125 MW. This total includes planned capacity additions of 1,485 MW, consisting of 207 MW of gas-fired generation (based on fall ratings), 2,909 MW of wind with a fall peak capacity contribution of 1,084 MW, and 304 MW of solar with a fall peak capacity contribution of 194 MW. The wind capacity values included in the report reflect a capacity contribution of 37% for non-coastal resources and 39% for coastal resources. The solar fall capacity values reflect a capacity contribution of 64%.

This preliminary fall SARA report includes a unit outage forecast of 13,833 MW. ERCOT's outage forecast is based on the historical average of outages for weekday peak hours for each of the last three fall seasons (2016 - 2018).