Electricity Markets

Public power responds to ERCOT call for reduced energy use

When the Texas grid operator called on energy conservation to help get through a stretch of extremely hot and humid weather this week, public power utilities, including Austin Energy, CPS Energy and New Braunfels Utilities, responded by urging their customers to cut their electricity use.

The Electric Reliability Council of Texas on Aug. 13 issued a level 1 energy emergency alert, a call for conservation that hadn’t been declared since January 2014. ERCOT, which runs most of the grid in Texas, has three levels of emergency alerts.

ERCOT can issue a level 1 alert when operating reserves drop below 2,300 megawatts and are not expected to recover within 30 minutes. Going into the summer, ERCOT had a 4,075 MW reserve margin.

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.

On the afternoon of Aug.13, ERCOT’s average real-time market energy price hit the $9,000 per megawatt-hour offer cap for several 15-minute settlement intervals, ERCOT said.

“The Public Utility Commission of Texas and grid operator ERCOT have closely anticipated high demand days as we experienced yesterday,” said Russ Keene, Executive Director of the Texas Public Power Association, on Aug. 14.

“Through the regulators’ good leadership the market participants are coordinated for a sustained spate of 100-degree days across much of the state as occurred August 13,” he said. “The Texas energy-only grid is often called the envy of the world and it performed well as designed, certainly more narrowly then anyone finds comfortable, but successfully passing yesterday’s stress test.”  

Keene noted that ERCOT announced a “level one energy alert” for two hours in midafternoon on August 13, suggesting voluntary conservation measures and that the peak demand on Aug. 13 was 74,181 MW, “which had actually been surpassed a day earlier at 74,531 MW.” 

TPPA’s members own and provide about 15 percent of the state’s daily demand, “and our members’ fleets are mature, stable plants operating in a steady state and we are responding proactively during these challenging times of tightened reserve margins,” Keene said.

“The growth of future, new project capacity in ERCOT portends some alleviation of the tight reserves, with scores of interconnection studies underway. Signed interconnect agreements portend as much as 2,000 MW of gas and as much as 20,000 MW of wind and solar coming on line by 2022.”   

Public power utilities in Texas respond to high power demand

In a news release issued on Aug. 13, San Antonio-based CPS Energy said that its residential and business customers along with Texas residents in the ERCOT region were being encouraged to reduce their electricity use as much as possible through 7 p.m.

CPS Energy said that on Aug. 12 it set a new all-time peak for energy use of 5,109 MW. Its previous peak usage of 5,080 MW was set on July 23, 2018.

“With temperatures expected to soar this week and into next, customers are encouraged to take key actions to reduce their use throughout the hottest part of the day, between 3-7 p.m.,” CPS said in an Aug. 13 news release. “Typically, a spike in electric consumption is seen during this time of day when area temperatures reach their highest and most people are returning home from work,” it noted.

Noting that ERCOT had declared a level 1 energy emergency alert, New Braunfels Utilities on Aug. 13 urged consumers and businesses to reduce their electricity use as much as possible, especially during the peak hours of 3:00 to 7:00 p.m.

New Braunfels Utilities also noted that customers have the ability to view ERCOT’s daily peak demand forecast, current load, and available generation at the grid operator’s website or by downloading the ERCOT mobile app, as well as get the latest grid conditions updates by following ERCOT on Twitter.

New Braunfels Utilities kept a close eye on market conditions and worked to educated and warn customers.  On Aug. 12 and Aug. 13 during critical hours NBU issued an Energy Action Day, asking customers to practice energy efficiency behavior during the hours of 3-7 pm.

Additionally, two of NBU’s largest customers had reduced load during the events and NBU facilities participating in ERCOT’s Emergency Response Services reacted to ERCOT signals and shed load as requested.  Due to these measures, NBU’s load did not surpass the load record of 319 MW set Sunday August 11.

Meanwhile, Austin Energy leveraged its social media channels to get the word out to its customers about what steps they could take in response to the higher power demand.

Austin Energy exceeded 2,800 MW of demand on Aug. 13 but fell short of exceeding its peak summer use last year on July 23, 2018 of 2,878 MW, noted Jennifer Herber, a spokesperson for the utility.

ERCOT issued warning in March

ERCOT in March warned it faced record peak demand and thin reserve margins this summer, making it more likely the grid operator would need to issue emergency alerts.

Looking ahead, ERCOT expects to see a surge in new solar generation, which can help meet peak load.

There is about 1,870 MW of solar on ERCOT’s system, with about 1,320 MW of capacity with signed interconnection agreements and posted security slated to come online this year, according to a monthly report the grid operator issued Aug. 13.

Next year, installed solar capacity plus projects with signed interconnection agreements grows to 7,190 MW and a year later to 10,850 MW, according to ERCOT. Not all developers with interconnection agreements have posted financial security.

Although not necessarily as effective in meeting peak demand, wind capacity is also expected to jump in ERCOT. There was about 22,050 MW of wind capacity in ERCOT at the start of the year. Based on developers with signed interconnection agreements, most of which have also posted financial security, ERCOT’s wind capacity could grow to 34,845 MW next year and 36,665 MW in 2021, according to the grid operator.

Natural gas combined cycle capacity is likely to remain stable, with 35,500 MW in place and up to another 1,000 MW expected by the end of 2021, most of which does not have financial security.