Tag Archives: energy efficiency

Latest ERCOT projections suggest adequate resources for next few years — buoyed by wind, gas and solar

ERCOT has recently released a series of biannual reports suggesting adequate electric resources in Texas over the coming months and years. While “resource adequacy” has been a buzzword in Texas in recent years, due in part to a series of unfortunate outages from fossil fuel plants and extreme weather events, the ERCOT reports released today suggest a healthy reserve — in normal weather situations. This is due in part to the continued use of energy efficiency and demand response, as well as significant investment in new power plants, including wind, solar and natural gas. 

According to its 10-year projection report known as the “Report on Capacity, Demand and Reserves in the ERCOT Region,” ERCOT expects that Texas will meet its current reserve target of 13.75% in 2015, 2016 and 2017. By 2018, reserves would dip under the current target, falling to 12.3%.It is important to note, however, that ERCOT — as per its current board policy — continues to discount the capacity of wind resources to only 8.75% at peak demand since wind values tend to be lower on a hot summer day. However, recent ERCOT proposals suggest that West Texas wind should be valued closer to 15%, while Coastal wind resources actually provide closer to 40% at peak times. Making those adjustments would raise the reserve margin. According to ERCOT’s latest Planning Report, also recently released, over 8,712 MWs of wind power is expected to be added over the next three-and-a-half years, bringing total wind capacity to some 19,777 MWs by 2017. That report also highlighted some 3,000 MWs of solar that is being developed in Texas, though only a few of those projects have signed interconnection agreements. 

The report also used ERCOT’s latest load forecasts, which take into account the impact of energy efficiency, while also giving credit for demand response programs run by both ERCOT, as well as transmission and wire companies. Thus, the report assumes that at least 1,900 MWs of these demand response programs will be available to the market should they be needed. 

A shorter term forecast — known as the Seasonal Assessment of Resource Adequacy — shows some concerns for the upcoming summer, however. ERCOT reports that the summer will start with tight reserves, but that six new gas and wind generating projects will add some 2,122 MWs of power by the end of the summer. ERCOT states that in normal weather there should be sufficient reserves, though in extreme weather situations, or should several large units have issues, they would need to rely on their demand response products, operating reserves and a call for additional energy conservation. 

Sierra Club believes that new generation — particularly from wind and solar — along with continued investment in demand response and energy efficiency should keep the lights on in Texas for years to come. Among our recommendations are increasing the required utility energy efficiency goals to 1% of peak demand by 2018, increasing the budget for Emergency Reserve Services, and allowing demand response companies to bid in directly into the energy market. Stay tuned for more. Click here for access to several of the ERCOT reports. 

New Report Finds Energy Efficiency is America’s Cheapest Energy Resource Energy Efficiency Costs Utilities 2 to 3 Times Less Than Traditional Power Sources; Average of 2.8 Cents per Kilowatt Hour

A new report from ACEEE — American Council for an Energy Efficient Economy — found that energy efficiency is the nation’s cheapest resource. The non-profit institute looked at utility energy efficiency programs in a variety of states over a variety of years and found costs were a fraction of the energy costs for generation. Below is the press release. We will be digging in to some more specific Texas numbers in future blogs. 


For Immediate Release
Media Contact: Patrick Kiker
202.507.4043, pkiker@aceee.org

Washington, D.C. (March 26, 2014): According to a new report released today by the American Council for an Energy-Efficient Economy (ACEEE), energy efficiency is the cheapest method of providing Americans with electricity. Energy efficiency programs aimed at reducing energy waste cost utilities only about three cents per kilowatt hour, while generating the same amount of electricity from sources such as fossil fuels can cost two to three times more.

“The cheapest energy is the energy you don’t have to produce in the first place,” said ACEEE Executive Director Steven Nadel. “Our new report shows that when utilities are examining options on how to provide their customers with cheap, clean electricity, energy efficiency is generally the best choice.”

“Why build more expensive power plants when efficiency gives you more bang for your buck?” said Maggie Molina, Utilities, State and Local Program Director and author of the report, The Best Value for America’s Energy Dollar: A National Review of the Cost of Utility Energy Efficiency Programs. “Investing in energy efficiency helps utilities and ratepayers avoid the expense of building new power plants and the harmful pollution that plants emit.”

The report looks at the cost of running efficiency programs in 20 states from 2009 to 2012 and finds an average cost of 2.8 cents per kWh—about one-half to one-third the cost of alternative new electricity resource options, as illustrated by the following graph from the report:


Levelized costs of electricity resource options. Source: Energy efficiency data represent the results of this analysis for utility program costs (range of four-year averages for 2009-2012); supply costs are from Lazard 2013.

The report analyzes energy efficiency costs from states across the country, including: Arizona, California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Massachusetts, Michigan, Minnesota, New Mexico, New York, Nevada, Oregon, Pennsylvania, Rhode Island, Texas, Utah, Vermont, and Wisconsin.

Other Key Findings Include:

  • At an average of 35 cents per therm, natural gas utility energy efficiency programs are also highly cost-effective (in 2013, the national average natural gas commodity price was 49 cents per therm).
  • Both electricity and natural gas efficiency programs have consistently remained low-cost resources over the past decade, which shows the reliability of efficiency as a long-term resource.
  • Each dollar invested in electric energy efficiency measures yields $1.24 to $4.00 in total benefits for all customers, which include avoided energy and capacity costs, lower energy costs during peak demand periods like heat waves, avoided costs from building new power lines, and reduced pollution.
  • Incorporating higher levels of energy efficiency in long-term planning can protect utilities and their customers against volatile and rising costs of traditional energy resources.

To read the report, The Best Value for America’s Energy Dollar: A National Review of the Cost of Utility Energy Efficiency Programs, visit: http://aceee.org/research-report/u1402

About ACEEE: The American Council for an Energy-Efficient Economy acts as a catalyst to advance energy efficiency policies, programs, technologies, investments, and behaviors. For information about ACEEE and its programs, publications, and conferences, visit aceee.org.

Texas Capacity Debate: New Synapse Report Demonstrates that Peak Demand Can Be Met Through 2023 With Modest Policy ‘Tweaks’

Improving energy efficiency and demand response will keep the lights on for Texans and insulate the state from future issues arising from extreme weather

Today, the Sierra Club, Lone Star Chapter  filed a new report with the Public Utility Commission (PUC) and ERCOT (Electric Reliability Council of Texas) that shows that Texas should have adequate capacity beyond 2020 without making any changes to its current market structure, and could ensure adequate resources just by making some slight adjustments in the resources already on the system.

The report prepared by Synapse Energy for the Sierra Club, Demonstrating Resource Adequacy in ERCOT: Revisiting the ERCOT Capacity, Demand and Reserves Forecasts, runs two different scenarios based on ERCOT’s latest load forecast.  The first scenario updates ERCOT’s more recent forecast, accounting for new generation resources, crediting wind for its contribution during peak events and better accounting for energy efficiency and demand response. This scenario,  “Counting What We Already Have,” demonstrates that the market should meet the current target reserve margin through 2023.

The second scenario, “Augmenting Demand-Side Resources” examines what would happen to resource adequacy assuming two policy changes – raising the energy efficiency goal to 1.0% by 2018 and doubling the Emergency Reserve Service (ERS) program. This second scenario shows even more robust resource adequacy through 2023, adding about three percent to the reserve margin.

With Texas enjoying unprecedented growth in variable renewable resources, designing our energy market and ancillary services to maintain reliability, particularly in extreme weather is very important.  ERCOT’s load forecast assumes that our future weather trends will mirror “historical weather patterns,” using the past 12-years of weather data.  Even if the state sees the effects of increased weather variability, the policy tweaks recommended by the Synapse report would insulate the state from problems arising from excessive peak demand.  In fact, the likelihood of increased weather extremes makes these proposals all the more important.

The full report can be found here.


CPS Energy investments in clean energy paying off

Back in the 2010 to 2011 period, CPS Energy changed course, due to new leadership, significant opposition from the community over previous plans — including that of the Sierra Club — and some wise investments and strategies. The San Antonio municipal electric and gas utility — the largest in Texas — abandoned a plan to heavily invest in a scheme to double the size of the South Texas (Nuclear) Plant in Matagorda County and instead bet on LED lights, demand response, solar and IGCC — Integrated Gasification Carbon Capture. On three of the four, they appear to have been good decisions. On the other — so-called “clean” coal — the jury is still out. 

First, CPS Energy teamed up with demand response companies and technologies — companies that can help residential and industrial customers literally reduce their energy use during certain peak times of the summer or winter and better control their loads. CPS Energy has a variety of programs, but the most successful has been the Home Manager, which allows residential customers to control air conditioners, electric water heaters and pool pumps via computer, smart phone or tablet. According to CEO Doyle Beneby, the goal is to use Home Manager, Smart Thermostats, as well as more robust commercial and industrial DR to reach 250 MWs of DR in San Antonio by 2020. The good news? They are more than half-way there in 2014. 

At a recent quarterly Environmental Stakeholder meeting, Beneby and CPS Energy’s Chris Eugster told the folks in attendance that some 16,000 homes are currently using Home Manager — leading to the potential to save more than 30 MWs during peak demand events – while another 80,000 homes are on the Peaker Saving program, a more limited program aimed squarely at air conditioning, but that still accounts for around 30 MWs. Some 200 industrial and commercial customers account for another 70 MWs of peak demand savings when called upon. All told? 134 MWs of Demand Response. 

It has already helped the state. CPS Energy reduced demand by 47 megawatts during the polar vortex freeze earlier this month–on January 6th.   This emergency response service was critical in the early morning hours when several plants were unexpectedly down, including significant power loss from the Comanche Peak Nuclear plant owned by Luminant. 

LED lighting with the company GreenStar is also going full throttle. Not only is the company manufacturing LED lights in the San Antonio area, they are being installed In San Antonio’s streets. Some 11,000 traffic lights using old technology have been replaced with LED lighting by the local company with a goal of getting to 25,000 lights by October, covering about 30% of all traffic lights. The other good news is these lights are “dark sky” certified, meaning they point down, not up, meaning hopefully one day those living in the city can see the stars. 

On the solar side, CPS Energy says it now has more than 12 MWs of onsite solar installed in its territory, three solar PV utility-scale plants up and running — about 44 MWs in all — and the newest utility-scale plant — the Alamo 1 41 MW plant being built by OCI should be done this year. That means CPS Energy will be at approximately 100 MWs out of their 400 MW solar goal. OCI — whose manufacturing plant is now being called Mission Solar rather than Nexelon– will eventually hire 400 San Antonians and is also in the process of building another 50 MW solar facility in South Texas. 

The deal to bring power from so-called “Clean Coal” on the other hand, has hit a snag. While CPS Energy has not given up on the potential to import power from the Summit Plant being developed west of Odessa, Texas, the continual delays and price increases has meant Summit has been unable to meet deadlines and price expectations. Beneby said he would still consider taking power from the plant — which would “gasify” coal – before running turbines and sending the carbon dioxide emissions underground, but the price would have to be right. 

In other news, Beneby said he had gone forward with an agreement made during the sometimes contentious rate discussions last winter, when City Council approved an increase in CPS Energy rates, and was exploring the creation of a new program designed to bring payment assistance and weatherization to a greater penetration among San Antonio’s less affluent, older folks on fixed incomes and those with old, leaky homes. Thus far, some 7,080 homes have been weatherized in recent years, but the goal of reaching 40,000 homes by 2020 will be challenging without a much greater marketing and implementation presence and Beneby said they were exploring creating a new organizational structure — including collaborating with neighborhood groups and non-profits — to get there. 

He also said that one of the other demands — that CPS Energy redo its energy efficiency study which led to its current goal of 771 MWs of demand response and energy efficiency by 2020 — was being met, and that CPS Energy had hired Nextant to do the study. He expected it to be released in March or April and to show that CPS Energy could do more — both by 2020 and beyond. 

Finally, Beneby noted that he was in talked with Senator Troy Fraser and SAWS — the San Antonio Water Service — over the concept of building power plants to help desalinate water and have the power plants available to the grid in times of stress. The idea would to co-locate a natural gas combined cycle plant of approximately 200 MWs to power a 75,000 acre-foot desalination plant. When water was not needed, or the electric grid was stressed, the electricity plant would be available. Beneby said CPS Energy was not tied to the technology, and a solar plant, or solar-gas hybrid plant were also possible though the plant would need to be able to be dispatched on short notice. 

Stakeholders line the hall at PUC to file comments on proposed changes to Texas’ s Energy Market

A variety of stakeholders lined the hall on Floor 8 of the Travis Building north of the Capitol in Austin today to file comments with the Public Utility Commission on what changes — if any — are needed in Texas’s energy market to help keep the lights on. With suggestions that electricity demand is growing, and supplies dwindling, and a couple of high-profile incidents in 2011 when Texas came close to brown-outs or black-outs, stakeholders have been discussing these issues at the PUC and ERCOT — which runs Texas’ electrical grid and market — for a couple of years. And there are at least two camps. On one side, are a majority of the generators — Luminant, NRG and Calpine, but also Austin Energy and Xcel — who argue that without a new Forward Capacity market to pay generators not only for the energy they produce when they produce it, but also for the capacity they have or promise to have, there will be no incentive to build new generation to meet demand. Many markets in the US have such a capacity market, and it does provide extra cash to generators (as well as to demand response to lower demand), though actual new construction has been limited in most markets. On the other, are environmental and consumer organizations like the Sierra Club, Public Citizen, EDF and AARP, large industrial and municipal  consumers like HEB,  Shell, the Texas Industrial  Energy Consumers and the Steering Committee of Cities Served by ONCOR — who are concerned about higher electricity prices and the potential that a capacity market will only help keep older generation units on longer, but not guarantee new generation. And perhaps another group — like CPS Energy, Golden Spread Electric Cooperative and GDF Suez Energy — who are not convinced a capacity market is needed, but are not opposed to some additional changes. Today was the deadline to respond to literally dozens of questions from Chairman Nelson and Commissioner Anderson — one a capacity booster the other a skeptic — on what we all thought.

The Sierra Club did file comments — some 25 pages long — that said: No capacity market needed — too expensive, too complicated and no guarantees. But we do think that some changes may be needed, and the best way is to do short-term competitive contracts through the Ancillary Service market at ERCOT. Since most of our “problem” is for a few hours a year on a cold winter morning or hot summer day, an extra Supplemental Reserve Service contracted a year in advance could help both those building peaking plants, or providing solar plus storage capabilities or those able to turn down demand could participate, helping to avert any issues before they arise. Other changes already occurring at ERCOT — such as allowing “loads” to bid into the energy market — and turn down demand when prices spike — should be allowed to move forward. The Comptroller of Public Accounts must begin rulemaking to adopt 2012 energy codes so that new buildings in Texas are energy efficient. PUC should adopt new rules on interconnection of distributed solar and require that excess energy be paid a fair market rate.

indeed, ERCOT is in the middle of redoing both their ancillary service market and their demand and supply forecasts and it may well turn out that there really is no big crisis at all. Actually the real crisis is that energy companies like luminant, NRG and Calpine are not making as much money as they would like!

Stay tuned for more in this ongoing saga. For a copy of our comments, see here..