Market Information System Grid and Market Conditions

News Release

May 16, 2008

ERCOT Expects Adequate Power Supplies for Summer

Generation Additions Improve Future Outlook

Power supplies are adequate to meet this summer’s consumer demand in the Electric Reliability Council of Texas (ERCOT) region, according to the grid operator’s annual summer assessment released today. 

The summer peak demand forecast of 64,927 megawatts (MW) is 4.4 percent higher than the actual peak demand for 2007 (62,188 MW), which occurred during a cooler-than-normal summer. 

Since the December 2007 assessment, 1,491 MW of natural-gas powered resources have completed grid interconnection agreements and are projected to be in-service in 2008 and 2009.  These additions are the primary factors increasing the reserve margin to 13.8 percent in 2008, up from 13.1, and 16.5 percent in 2009, up from 12.1, surpassing the 12.5 percent target minimum needed to ensure reliability for extreme temperatures and unexpected generation outages.  ERCOT reserve margins are now projected to be above the 12.5 percent minimum through 2012.  

Reserves drop to 12.3 percent in 2013 but ample resources that can be built in time to correct this reserve dip are already in the interconnection review process, according to Bill Bojorquez, vice president of system planning for ERCOT.  Units 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) range from 3,091 MW in 2009 to 19,608 MW in 2013.  Additional potential resources include more than 4,500 MW of generation capacity which is currently mothballed but could be brought back into service.   

The electricity demand growth rate over the next ten years in the 2008 long-term peak demand forecast has been lowered to 1.8 percent, compared to last year’s 2.12 percent forecast growth rate, due to a projected downturn in the economic outlook for Texas, as measured by economic indicators such as the real per capita personal income, population, gross domestic product and various employment measures.   

A new consideration in this year’s assessment is the amount of 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).  Estimated load decrease in 2008 is estimated at 143 MW and 160 MW for 2009-2013. 

ERCOT continues to lead the nation with the highest installed wind generation capacity at 5,519 MW, according to the summer assessment.  An additional 3,928 MW of wind capacity have executed interconnection agreements and are reported to be in service by summer 2009.  For summer peak capacity, ERCOT counts 8.7 percent of wind nameplate capacity in accordance with ERCOT’s stakeholder-adopted methodology, based on a study of the effective load serving capability of wind.  

Summer peak generation by fuel type is 69 percent natural gas, 21.7 percent coal, 6.7 percent nuclear, 0.8 percent water (hydropower), 0.7 percent wind, 0.1 percent biomass, and 1.1 percent other (primarily methane and petroleum coke). 

“We are pleased to report an improvement in the reserve margins for this summer and the outlook for the next five years,” Bojorquez said.  “Generation developers have continued to show an interest in the ERCOT market, as evidenced by the increased number of generation requests in the planning queue.”  

In the deregulated market, the generation owner decides when and where to build new generation and bears the risk of investment.

Capacity, Demand and Reserves in the ERCOT Region








Summer Peak Forecast (MW)







Total Resources (MW)







Reserve Margin (12.5% minimum required)







Improvement since Dec 2007

Up 0.7%

Up 4.4%

Up 3.3%

Up 3.8%

Up 4.0%

Up 4.1%


Generation Additions

Unit Name





South Houston Green Power Expansion



Gas –  Combined-Cycle

BP Global Power

Victoria Power Station



Gas –  Combined-Cycle

NuCoastal Power Corp

Laredo Peaking Unit 4



Gas – Combustion Turbine

Topaz Power Group

Laredo Peaking Unit 5



Gas – Combustion Turbine

Topaz Power Group

Cedar Bayou 4



Gas –  Combined-Cycle

NRG Energy

Winchester Power Park



Gas – Combustion Turbine




Reserve Margin

Generation reserves in excess of forecasted peak demand needed to ensure reliability for extreme temperatures and unexpected generator outages.  The ERCOT stakeholder-approved methodology for calculating the reserve margin is: resources less forecast, divided by forecast.  The minimum reserve margin target of 12.5% was approved by the ERCOT Board in 2002.


One megawatt is roughly enough electricity to power 500-700 average homes under normal conditions in Texas, or about 200 homes during hot weather when air conditioners are running for longer periods of time and more often. 

Additional Information Online:

2008 ERCOT Planning Long-Term Hourly Peak Demand and Energy Forecast, May 13, 2008 

ERCOT Region Map

The ERCOT Region includes Houston, Dallas, Fort Worth, San Antonio, Austin, Corpus Christi, Abilene and the Rio Grande Valley.  It does not include the El Paso area, the Texas Panhandle, Northeast Texas (Longview, Marshall and Texarkana), and Southeast Texas (Beaumont, Port Arthur, and the Woodlands).   

The Electric Reliability Council of Texas (ERCOT) manages the flow of electric power to more than 26 million Texas customers -- representing about 90 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 46,500 miles of transmission lines and 710+ generation units. It also performs financial settlement for the competitive wholesale bulk-power market and administers retail switching for nearly 8 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. Its members include consumers, cooperatives, generators, power marketers, retail electric providers, investor-owned electric utilities, transmission and distribution providers and municipally owned electric utilities.