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Texas Braces for More Summer Electricity Alerts


These translations are done via Google Translate

(Reuters) – The Electric Reliability Council of Texas (ERCOT) has warned reserve margins will be squeezed next week as temperatures rise and it may need to instruct generators to postpone non-urgent maintenance.

ERCOT is the independent system operator for most of Texas, managing the flow of power to more than 27 million customers representing about 90% of state-wide load.

ERCOT has issued similar warnings several times over the last month, after issuing multiple alerts calling on consumers to reduce their power consumption last summer to avert the risk of rolling blackouts.

The state’s summer power shortages are primarily the result of fast population and economic growth, which has left generators struggling to keep pace with the rapid increase in load.

The state’s resident population increased to 30.5 million in 2023 from 22.0 million in 2003, an average annual rise of 1.6%.

The state economy grew at an average annual rate of 3.4% between 2017 and 2023, compared with 2.2% for the country as a whole.

As a result, state electricity sales increased to 487 billion kilowatt-hours (kWh) in 2023 from 323 billion kWh in 2003, an average annual increase of 2.1%.

Texas power sales have grown more than three times faster than in the rest of the country, where they increased at an average rate of just 0.6% per year between 2003 and 2023.

GROWTH AND ISOLATION

Like other fast-growing electricity systems, such as those in China and India, ERCOT has suffered from periodic mismatches between generation and load.

It is much harder to balance generation and load, while maintaining a sufficient reserve margin, in a system characterised by fast growth than one with flat or declining demand.

Flat or declining load usually means there are plenty of legacy generators no longer in regular service but that can be called to start up when reserve margins become tight. ERCOT does not have that option.

The system’s problems are compounded because it has few links with power networks in the rest of the country that would enable it to import power when there is a local shortfall.

Texas has made a political choice to limit cross-border interconnections with other states to avoid oversight of its electricity system by the Federal Energy Regulatory Commission (FERC).

In contrast to other states, Texas has also until recently shunned the idea of paying power plants to maintain spare capacity, rather than for the units of electricity actually generated.

To reduce overall costs, the state has operated an energy-only market rather than a capacity market as well.

Rather than paying for reserve capacity that will be idle for much of the year, Texas has relied on high wholesale prices to encourage marginal generation and force load reductions at times when margins are low.

Chartbook: Texas electricity consumption, opens new tab

ERCOT’s balancing problems are especially acute during the summer months, when daytime loads peak far higher than in the rest of the year as a result of extensive air conditioning.

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But reserve margins can also be depleted in the spring and autumn shoulder seasons, when many gas-fired, coal-fired and nuclear generators are taken offline for maintenance.

Heatwaves that arrive earlier than usual in the spring, or occur later than normal in the autumn, stretch power supplies because many generators have scheduled routine downtime.

To rebuild reserve margins, reliability managers can issue ‘no touch’ orders to generators and transmission owners instructing them to postpone any but the most urgent maintenance.

If that still proves insufficient to boost reserve margins to a healthy level, grid managers can order flat-out ‘maximum generation’ from available units.

Ultimately, the grid can seek various forms of voluntary demand reduction; issue alerts calling for customers to conserve electricity; and in the last resort forcibly disconnect loads on a rotating basis.

MANAGING HEATWAVES

The proliferation of crypto-mining operations and data centres, associated with very large loads, seems to have turbocharged growth in electricity consumption in 2022 and 2023.

However, because of population and economic growth, Texas electricity consumption has set records most years recently, irrespective of whether the summer has been especially hot or not.

Heatwaves have nonetheless stretched resources to the limit, and forced the grid to undertake extraordinary measures to boost short-term generation and reduce load.

In recent weeks, ERCOT has been relying on no-touch orders, some of them subsequently cancelled, to maximise the generation and transmission resources available in periods of warm weather.

Last summer, it relied heavily on emergency alerts broadcast to consumers asking for electricity conservation when reserve margins were particularly low.

The state experienced a total of 2,687 cooling degree days between May and September 2023, the second-highest on record after 2011.

August and September 2023 were much hotter than normal, forcing the grid to issue multiple alerts to generators and customers.

But the combination of higher wholesale prices and repeated appeals for conservation appear to have blunted load growth successfully.

The number of cooling degree days was up by 23% between May and September 2023 compared with the same period in 2021, while electricity sales were only 16% higher.

It is easy to criticize ERCOT’s repeated balancing difficulties, but the system’s problems are those of rapid growth, so they are nice problems to have.

ERCOT’s grid managers have been effective at balancing the system, given the historical absence of a capacity market and the political reluctance to interconnect with neighbouring grids.

John Kemp is a Reuters market analyst. The views expressed are his own. Follow his commentary on X

 

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