EnergyERCOT Projects Record Energy Usage for 2020 Summer

With the coronavirus pandemic drastically changing the typical demand models, Texas' energy regulator braces for a hot summer.
May 28, 2020
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A year ago, the Electric Reliability Council of Texas (ERCOT) trundled towards a summer of constant, oppressive heat interlaced with near grid breakdowns.

Last year, ERCOT warned against possible rolling blackouts as wind energy did not generate as much as planned and a traditionally-powered energy plant broke down.

This year, ERCOT projects record electricity usage for the summer. The council decreased its peak-load estimate by just below two percent from its earlier summer forecast this year before the COVID-19 pandemic. But they still project a record usage of 75,200 megawatts (MW), higher than last year’s record high of 74,820 MW set on August 12.

“Peak-load estimate” refers to the electricity demand high at a particular moment in time. Essentially, it’s the absolute highest amount of electricity a grid can handle at any given moment. Last summer, the demand at times almost exceeded the supply and thus consumers were nearly unable to access the electricity when they needed it.

The electricity grid only has so much output capability and most of the time it’s more than sufficient to keep up with demand. But at times, such as the dead of summer, the supply struggles keep up and is not constantly set at the peak projection. At cooler times in the day, the supply capacity is far lower than at the peak.

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This mapping allows for scarce resources to be allocated most efficiently. But when a problem in the supply chain arises, consequences occur — such as the ERCOT warnings from last year.

ERCOT’s projections attempt to inform the energy industry how much will be needed to prevent electricity blackouts. Unlike many other regions, Texas energy producers are only paid after they provide their service. In other regions of the U.S., payment occurs on the front end as producers and consumers agree to production contracts for certain amounts of energy.

Bill Magness, ERCOT president and CEO, said, “There is a lot of uncertainty in today’s world, but we are confident that Texas will still be hot this summer. Texans will need electric power as they do every summer, and ERCOT is prepared to do our part to keep it flowing reliably.”

In its new projections, ERCOT increased its new reserve margins to 12.6 percent — which will serve as a backup option during peak hours.

Earlier this year, the Senate Business and Finance Committee debated the Operating Reserve Demand Curve, a mechanism that adjusts energy prices based upon how much is in reserve. Essentially, increasing prices as the reserve decreases and vice versa. This is intended to incentivize producers to invest those added profits into more supply capacity.

Part of the reason for the adjustment is that seven projects previously under construction have begun operations. These will, in total, add 979 MW to the grid load — almost 30 percent of which will go toward summer peak demand.

ERCOT said that much of that addition will come from added wind and solar production. In total, about five percent of the grid’s peak-load will come from renewables and the reserve margin will have increased four percent if ERCOT’s new projection comes true.

After a spring of uncertainty in the energy industry due to the demand pitfall of oil due to the pandemic, ERCOT is planning ahead so as to not experience the same loss of service as last year.

With much of the traditional modeling changing — such as a shift away from typical commercial consumption levels and towards residential levels as coronavirus causes many to stay home — consumers and producers in Texas enter strange waters as another hot summer looms.

Correction: An earlier version of this article misstated the “peak-load estimate.”

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Brad Johnson

Brad Johnson

Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.