News Release
May 31, 2011

ERCOT Expects Adequate Power Supplies for Summer (Update)

Reserve margins forecast above minimum through 2013 

(Updated June 1, 2011 to reflect revised generation total)

The Electric Reliability Council of Texas (ERCOT), the state grid operator and manager of the wholesale electric market, expects adequate electricity resources to meet this summer’s highest electricity usage in the ERCOT region, according to the summer assessment released today.

“We expect to have enough generation resources to exceed peak demand by 17.5 percent this summer – surpassing the 13.75 percent threshold set by ERCOT for reliable operation of the electric grid in case of major outages or unusual temperature extremes,” said Kent Saathoff, vice president of grid operations and system planning.  “As always, if the grid experiences a prolonged period of abnormally high temperatures or higher-than-normal unplanned outages due to drought conditions or other unexpected weather event, we will be prepared to implement the progressive series of emergency procedures to preserve the security of the grid.” 

The summer peak demand forecast is 63,898 megawatts (MW) – almost 2,000 MW less than last summer’s record-breaking peak demand of 65,776 MW on Aug. 23.  The demand forecast is based on long term historical average temperatures and economic conditions as measured by employment.  Actual electricity demand will vary as temperatures vary from the forecasted weather profile and as actual economic conditions vary from the forecast. 

 “Last year we used the lowest scenario of the economic forecasts for our forecast models, but we’ve noted a positive trend in the economy beginning this year, so we returned to the baseline economic forecast this year,” Saathoff said.  “This accounts for the higher demand forecasts for the years beyond 2011.” 

Short-term outlook improved 

Reserve margins are forecast to remain above the minimum target through 2013, an increase of almost 2 percentage points since the last assessment, which showed the reserve margin dropping below the minimum beginning in 2013. 

“Our reserve margins for the next several years have improved due to the addition of more than 1,000 MW of additional generation,” Saathoff said. 

Additional new and refurbished resources added since the December reserve margin forecast include:

  • 565 MW from three new gas units in Jack County (operational before winter peak);
  • 406 MW from Greens Bayou 5, a 1973 gas unit in Harris County returning to service;
  • 45 MW from Lufkin Biomass, Angelina County, scheduled to be available in time for summer peak. 

ERCOT’s assessment for 2011 also includes 1,484 MW of contractually committed demand response resources and emergency interruptible loads which operators can dispatch on command.  

Another 128 MW in demand reduction is anticipated this summer due to energy efficiency programs.  Impact from energy efficiency programs are assumed to accumulate in the 10-year outlook, to 681 MW in 2015 and to 1,448 MW in 2020, based on on-going program requirement from Senate Bill 1125 passed by the Texas Legislature in May, effective Sept. 1.   

Ten-year outlook affected by delayed projects 

For the first time the summer assessment shows the reserve margins through ten years, instead of five.  The reserve margin drops below the target minimum of 13.75 percent beginning in 2014 and stays below, based on currently committed generation. 

Four thermal (fossil-fuel) units totaling 3,280 MW which were previously planned for completion 2014-2016 have been delayed a year:

  • 1,380 MW, Pondera King Power Project, Harris County, natural gas, June 2014 to June 2015
  • 620 MW, Las Brisas Energy Center Phase 1, Nueces County, petroleum coke, July 2015 to October 2015
  • 620 MW, Las Brisas Energy Center Phase 2, Nueces County, petroleum coke, July 2016 to October 2016
  • 660 MW, Coleto Creek Unit 2, Goliad County, coal, January 2016 to January 2017. 

Potential resources not added in the report’s operational generation include more than approximately 2,300 MW of generation capacity which is currently “mothballed” but could be brought back into service at the owners’ decision.   

Other potential resources not added into the reserve margin calculation include proposed units that have initiated the final study phase of the transmission interconnection process.  Planned units in the final phase total 8,200 MW for 2012 and increase to more than 19,681 MW by 2020. Continued development of some portion of these units will be necessary to maintain an adequate supply of generating capacity and maintain the reliability of the system. 

“ERCOT’s role in the competitive market is to provide an outlook for future peak demand and the amount of generation needed to maintain long-term reliability of the electric grid,” Saathoff said.  “The generation owner bears the risk of investment and decides when and where to build new generation, and whether to retire or mothball existing generation, based on market conditions.”     

ERCOT REGION SUMMER PEAK FORECASTS, RESOURCES AND RESERVE MARGINS, 2011-2020

 

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Summer Peak Forecast(MW)

63,898

65,665

67,757

70,540

72,591

74,198

75,365

76,654

77,866

79,274

Firm Load Forecast(MW) (Includes demand response reductions)

62,286

63,880

65,790

68,381

70,231

71,628

72,576

73,638

74,612

75,771

Resources (MW)

73,175

75,065

75,152

75,967

78,144

79,347

80,379

80,379

80,379

80,379

Reserve Margin* (13.75% target)

17.5%

17.5%

14.2%

11.1%

11.3%

10.0%

10.8%

9.2%

7.7%

6.1%

*In November 2010, the ERCOT board endorsed a new target reserve margin of 13.75 percent, up from 12.5 percent which has been used since 2002. 

Generation by fuel type 

Summer generation by fuel type is 64.2 percent natural gas, 26 percent coal, 7 percent nuclear, 1.1 percent wind, and 0.7 percent hydro, 0.1 percent biomass, and 0.8 percent other (includes landfill gas and petroleum coke, and other fuels not specifically categorized such as diesel). 

ERCOT continues to lead the nation with the most installed wind generation capacity at 9,452 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.  

SUMMER FUEL TYPES, 2011

Fuel Source

% of Available Capacity *

% of Nameplate Capacity

Biomass

0.1%

0.1%

Coal

26.0%

23.3%

Natural Gas

64.2%

57.4%

Nuclear

7.0%

6.3%

Other

0.8%

0.7%

Hydro

0.7%

0.7%

Wind

1.1%

11.6%

Solar

0.0%

0.0%

*Wind has been discounted using availability factor of 8.7%. 

Long-term projections 

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 62,000 MW of new generation capacity needed to meet the 2031 projected demand of approximately 99,900 MW (including a 13.75 percent reserve margin). 

The ERCOT region includes 23 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. 

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. 

Online:

2011 Capacity, Demand and Reserves Report (PDF version)

2011 Capacity, Demand and Reserves Report (Excel version)

 

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