EnergyERCOT Expects Record Electricity Demand for Summer Heat But Projects Sufficient Generation for Power Grid

In its Summer 2022 Seasonal Assessment, the Electric Reliability Council of Texas (ERCOT) pegs peak demand this summer at 77,317 megawatts (MW). One MW can power about 200 homes at peak hours.

Peak usage hours usually come in the mid-afternoon and extend into the early evening as people return home from work and tend to crank up their air-conditioning.

During these peak hours, ERCOT expects to have 91,392 MW available to meet that demand, about 87 percent of the total installed capacity.

ERCOT and the Public Utility Commission announced on Monday that they’d hold a press conference on Tuesday to discuss the grid’s summer readiness.

By source, ERCOT expects natural gas to lead the way generating 51 percent of total capacity this summer followed by solar with 20 percent, which disappears as soon as the sun goes down. Coal generation is next at 13 percent.

Wind, which generates most in the early morning hours when demand tends to be lower, is expected to account for 9 percent of the generation followed by nuclear at 5 percent.

Over the next decade, ERCOT estimates total capacity to grow 10 percent as the state’s population continues to grow. Part of the state grid’s growth is the addition of most of Lubbock to ERCOT in May last year, which previously pulled from the Southwest Power Pool.

This comes during an unseasonably hot heatwave in May this year which caused a conservation request by ERCOT last Friday, asking Texans to increase their thermostat temperature and avoid using big appliances. Six generation units tripped offline due to mechanical issues on Friday collectively amounting to about 2,900 MW of generation. This caused capacity to wane more than expected as demand rose.

During that period, ERCOT says thermal generation accounted for 78 percent of the generation.

By Saturday afternoon, ERCOT said five of the six generators that fell offline had returned to service. The grid regulator could not provide specifics on what caused the failures.

Throughout the entire conservation request period, the grid’s reserve margin never moved beyond normal conditions. Despite various media figures sounding the alarm of outages, including one saying that Texas had “run out of electricity,” no emergency alerts were triggered.

Electricity in the state did not “run out.”

At some points over the weekend and in certain parts of the state, wholesale electricity prices jumped substantially higher than normal — even nearly reaching the $5,000 per megawatt-hour (MWh) cap, lowered last year from its previous $9,000 MWh stature during the legislature’s grid reforms.

Regardless, most Texans will not see a commensurate spike in their utility bills because the vast majority have fixed-rate utility plans, paying a set price per kilowatt used. Those who will see a spike are those with wholesale-indexed utility plans, buying electricity on the ERCOT wholesale market.

Those who fly by the fluctuating wholesale price are typically large-scale industrial users, and the Texas legislature prohibited residential customers from using those plans for their homes.

Conservation requests are seldom but not unheard of, with two being issued during the 2019 summer and another in June 2021 after that year’s blackouts.

The springtime is often used for generators to go offline for repairs before the summer heat hits. But when an unexpected heatwave arrives sooner than expected, it can cause conditions to tighten more than usual.

Texas is facing an influx of renewable generation — combined wind and solar estimated to reach roughly one-third of the grid’s total capacity — which brings with it reliability questions that the state is still trying to solve.

As Texas adds tens of thousands of renewable MW capacity to the grid, it’s also retiring tens of thousands of coal and natural gas generation — intermittency supplanting dispatchability.

And when mechanical failures cause thermal generators to unexpectedly trip offline, which also happened last June, the anxiety of another grid collapse appears front and center.

But this time, like every other instance except for February 2021, nothing came of tightening conditions as the grid regulator and generators swiftly returned most of the plants to operation.