Reserve margins above minimum through 2015 

AUSTIN, May 12, 2010 – The Electric Reliability Council of Texas (ERCOT), grid operator for most of the state, expects adequate electricity resources to meet this summer’s peak use in the ERCOT region, according to the 2010 summer assessment released today. 

“Generation resources are forecast to exceed peak demand by 21.4 percent this summer – well above the 12.5 percent minimum needed for reliable operation of the electric grid in case of major outages or unusual temperature extremes,” said Kent Saathoff, vice president of system planning and operations.  

Reserve margins are forecast to remain above the 12.5 percent minimum through 2015, a slight improvement since the last forecast in December 2009, which showed the reserve margin dropping below the minimum beginning in 2014.

“The reserve margins for the short term forecast have increased primarily due to an adjustment of the load forecast to match changes in the economic conditions,” Saathoff said.  “Based on updated economic forecasts and market participants’ current plans for future generation, the reserve margin appears to be adequate through 2015.” 

The ERCOT peak use forecast is based on an average weather profile and economic factors including per capita income, population, gross domestic project and various employment measures. 

Since the December 2009 assessment, capacity resources available for the next five years have dropped approximately 2,100 megawatts (MW) due to the mothballing of nine older gas-fired units, totaling 2,053 MW, and the cancellation of two wind projects, representing 48 MW of the net-dependable capacity.  In addition, 2,073 MW of new committed generation has been added to the projected forecasts. 

The 2010 summer peak demand forecast is 64,052 MW.  ERCOT’s all-time peak use of electricity is 63,400 MW, which occurred on July 13, 2009.  

Peak electricity use in the ERCOT region is driven by high temperatures and economic conditions. The forecast is based on average peak weather conditions.  Actual electricity demand will vary as temperatures vary from normal. 

ERCOT’s assessment also includes 1,323 MW of contractually committed demand response resources and interruptible loads which operators can dispatch on command. 

For the third year, the summer assessment included demand supplanted by energy efficiency conservation efforts as reported to the Public Utility Commission by ERCOT member utilities, in compliance with Legislative House Bill 3693 (2007).  Texas state law mandates that at least 20 percent of all investor-owned-utility growth in electricity demand be met through energy efficiency programs each year.  The estimated load decrease not already accounted for in the load forecast is 242 MW – about the size of a small power plant – up from 110 MW in 2009. 

The report also shows potential resources in the final phase of the interconnection process but lacking either an air permit or interconnection agreement (and therefore not counted in the reserve calculation), ranging from 8,116 MW in 2011 to 26,182 MW in 2015.   

One megawatt is roughly enough electricity to power 500 average homes under normal conditions in Texas, or about 200 homes during hot weather when air conditioners are running for longer periods of time. 

Installed capacity by fuel type is 59.2 percent natural gas, 22.3 percent coal, 6 percent nuclear, 10.8 percent wind and 1.6 percent water/biomass/solar/other. 

ERCOT continues to lead the nation with the most installed wind generation capacity at 9,117 MW.  For summer peak capacity, ERCOT counts 8.7 percent of wind nameplate capacity as dependable capacity at peak in accordance with ERCOT’s stakeholder-adopted methodology.  

Long-term projections in the annual assessment show three scenarios based on generation retirements at 30 years, 40 years and 50 years.  The mid-range scenario of unit retirements at 40 years or older indicates a need for more than 60,000 MW of new generation capacity needed to meet the 2030 projected demand of 96,000 MW (including a 12.5 percent reserve margin).  

The ERCOT region includes 22 million people.  The region represents 85 percent of the state''s electric load and 75 percent of the Texas land area.  ERCOT does not include the El Paso area, the Texas Panhandle, Northeast Texas, and Southeast Texas. 

ERCOT Region Summer Peak Forecasts and Reserve Margins

* Revised May 13, 2010 following completion of the Summer 2010 procurement for Emergency Interruptible Load Service, which had the effect of improving the reserve margins going forward.

Previous Reserve Margin Snapshots

Resource Changes since December 2009

New Generation

(transmission interconnection agreement, air permit, verification)

Mothballed Units

Online:

2010 Capacity, Demand and Reserves Report (PDF)

2010 Capacity, Demand and Reserves Report (Excel workbook)

“Load Forecast and Reserve Margin Update”
Presentation by Dan Woodfin, director of system planning, for the May 18 board meeting