News Release
January 10, 2013

ERCOT transmission studies identify upcoming transmission projects and potential long-term needs

Jan. 10, 2013, AUSTIN, TX — As electric demand continues to grow in much of Texas, the Electric Reliability Council of Texas (ERCOT), grid operator for most of the state, expects Texas transmission providers to complete improvement projects totaling $8.9 billion by the end of 2017.

The recently released Electric System Constraints and Needs Report identifies existing and potential constraints that could create reliability concerns or increase power costs for consumers in the next five years. The 2012 Five-Year Transmission Plan Report describes the projects planned to address these issues, along with other steps transmission providers are taking to help relieve congestion on transmission facilities.

ERCOT also has released a Long-Term System Assessment, which provides an assessment of system needs over the next 10 to 20 years. This report, which is updated every two years, evaluates several possible scenarios that could affect future transmission needs at key locations within the ERCOT grid.

"As we see the gap between available generation and peak electric demand become tighter over time, it becomes increasingly important to deliver new power resources to the grid as quickly, reliably and cost-effectively as possible," said ERCOT CEO Trip Doggett. "These studies help ERCOT, transmission providers and market participants plan ahead so we can prepare effectively for changing grid and market conditions."

Addressing current and near-term challenges

Congestion occurs when the amount of electricity being delivered to a specific destination exceeds a transmission pathway’s ability to move that power efficiently and safely, much like a busy roadway during rush hour. Congested transmission circuits are considered system constraints, which limit the movement of power to consumers in the affected areas.

ERCOT expects transmission congestion in the Houston area this year because some paths used to deliver power to the area will be out of service while they undergo improvements. In other areas, growing demand and construction-related outages could result in high levels of congestion on 17 different circuits. Congestion could affect the cost of power in the affected regions as generation from less efficient resources is used in those areas along alternate pathways.

In the next few years, a primary priority is to address constraints that have resulted from increased oil and gas exploration and production in West and South Texas. This growth has affected power demands both in the Permian Basin region of West Texas and the Eagle Ford Shale area in South Texas.

Another priority region is the Lower Rio Grande Valley, where there are only two high-voltage circuits to carry power into the growing region. Two projects scheduled for completion before the summer 2016 peak season will improve the capability to import power into the region and serve growing electric demand in the Brownsville area.

A long-standing constraint between West Texas, where most of the state’s wind generation is located, and the North Texas region, ,which includes the Dallas-Fort Worth area, is expected to be resolved by the end of 2013 when the state’s Competitive Renewable Energy Zone (CREZ) projects are completed. However, with more than 20,000 megawatts of new wind power currently being studied, new constraints could occur in future years, particularly in the Panhandle region.

Preparing for the future

The Long-Term System Assessment looks beyond the five-year ERCOT stakeholder planning horizon, evaluating a range of possible scenarios that could affect the types and locations of generation resources, as well as consumer energy use patterns. Although Texas law requires ERCOT to provide a 10-year analysis, a grant funded by the U.S. Department of Energy has enabled it to expand that assessment to a 20-year planning horizon.

The results indicate that the following resources likely will be needed within the next 10 years:

  • At least one path to import power into the Houston region as regulatory requirements will limit development of new generation within that region
  • An additional circuit to carry more power into the Lower Rio Grande Valley (unless more generation resources are developed there)

Within the 20-year study period:

  • Potential retirement of older natural gas-fired resources in urban areas could necessitate more transmission facilities within the Dallas-Fort Worth and Houston regions to support capacity and voltage stability.
  • Natural gas and renewable generation resources are likely to be competitive in a variety of scenarios, and significant growth in renewables may require ERCOT to study the need to integrate more variable generation that cannot sustain consistent output.
  • If market factors result in significant growth in renewable resources, it may become cost effective to develop higher voltage transmission solutions to connect those resources to areas where electric consumption is high.
  • Although there should be sufficient water resources to allow operation of existing and future power plants in an extended drought, those conditions could lead to increased power plant development in eastern Texas where more surface water is available.

Study process and considerations

The scenarios used in the long-term assessment began with a "business-as-usual" scenario, adjusted for potential changes that include retirement of older units, improvements to wind turbine technologies, growth in non-wind renewable technologies, and continuation of the Production Tax Credit combined with higher natural gas prices. All of these factors could affect the type and location of new generation resources.

Although these are long-term outcomes of a variety of potential conditions, they help to inform the more immediate five-year plan, which is updated annually. As the transmission planning authority for the region, ERCOT works with transmission and distribution providers and other stakeholders to identify the need for new transmission facilities based on engineering analysis of operational results, load forecasting, generation interconnections, and transmission and system studies.

These studies are developed with input and review from three stakeholder committees: the Regional Planning Group, which reviews and comments on new transmission projects, the Planning Working Group, which reviews processes and criteria used to plan transmission system improvements, and the Long-Term Planning Task Force. Major projects must be also be endorsed by the ERCOT Board of Directors.

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The Electric Reliability Council of Texas (ERCOT) manages the flow of electric power to 24 million Texas customers -- representing 85 percent of the state's electric load. As the independent system operator for the region, ERCOT schedules power on an electric grid that connects more than 41,500 miles of transmission lines and 550 generation units. ERCOT also performs financial settlement for the competitive wholesale bulk-power market and administers retail switching for 6.7 million premises in competitive choice areas. ERCOT is a membership-based 501(c)(4) nonprofit corporation, governed by a board of directors and subject to oversight by the Public Utility Commission of Texas and the Texas Legislature. ERCOT's members include consumers, cooperatives, generators, power marketers, retail electric providers, investor-owned electric utilities (transmission and distribution providers), and municipal-owned electric utilities.

Contact
Robbie Searcy (512) 225-7213
rsearcy@ercot.com