Tag Archives: ERCOT

Texas Renewable Energy Keeps Growing: Both Austin and ERCOT Showing it Can Be Done

Ok I’ve written about this before but the pace is getting to be mind-boggling. Every month, ERCOT releases its Monthly Status System Planning Report and the amount of proposed generation keeps growing. And in particular what appears to be winning is wind power, and increasingly solar. The February 2014 Monthly Status Report shows that ERCOT is currently tracking 219 proposed projects totaling over 55,300 MWs, about half – 26,700 MWs in all — of which is wind. The latest to sign what is known as a Generation Interconnection Agreement with the local transmission company is the Briscoe Wind Farm, a 300 MW facility located in West Texas. Just earlier this month we announced that Austin Energy had negotiated a cheap wind deal with Lincoln Renewable for 300 MWs in Castro County.

Here are the latest numbers from ERCOT.

Confidential Projects Projects under Study Projects with Signed Agreement Total
Natural Gas 3,544 11,437 9,521 24,502
Coal 0 30 240 270
Wind 5,538 12,777 8,413 26,728
Solar 1,335 1,414 198 2,947
Storage 0 874 0 874
Nuclear 0 0 0 0
Petroleum Coke 0 0 0 0
Total 10,417 26,532 18,372 55,321

What is pretty interesting is the geographic distribution of these projects. If you look at ERCOT’s five traditional load zones — Panhandle, West Texas, North Zone, South Zone and Coastal Zone, future natural gas projects dominate in the South and North Zone — where wind and solar resources are just not as strong. But from the Coastal Zone — where gas and wind split the pie — to West Texas and especially the Panhandle, wind and increasingly solar beat out gas projects.

Coal you might ask? Two projects – a tiny 30 MW proposed project in Milam County and the long-awaited IGCC project by Summit in Ector County, which has been delayed three times, and is currently scheduled for 2018.. maybe. Petroleum Coke, like those proposed Las Brisas and White Stallion projects that SIerra Club fought?  Dead. none. What about nuclear? Didn’t NRG and Luminant promise to build us new reactors? Dead.

In fact, other than gas, wind and solar, the only projects are three proposed storage facilities which could revolutionize the use of renewable energy, making it dispatchable just like gas.

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Webberville Project — three times more expensive than the new one they are talking about.

Now back to Austin Energy. While two weeks ago we told you about a deal to purchase wind at a bargain rate of $26 to $36 per MWh that City Council recently approved — a price rivaling what we pay for our dirty coal power — this Thursday Austin Energy will be proposing to City Council that they authorize negotiations over two utility-scale solar plants to be constructed by SunEdison. While the exact price can not be revealed, Austin Energy is reporting that it is between $45 and $55 per MWh, making it the cheapest solar deal in the country. The two plants will total up to 150 MWs of capacity, and be located in West Texas. If these deals come to fruition, Austin Energy would not only meet its 35% renewable energy commitment four years early by the time the plants come online in 2016, but even its 200 MW solar goal. With the Local Solar Advisory Committee recommending that Austin Energy double its goal to 400 MWs by 2020, Austin Energy’s initial negative reaction — based on a belief that solar would cost more in the $80 to $100 per MWh range — now seems well.. so last year. In fact, Austin Energy reports that they had over 125 proposals for utility-scale solar from 66 separate projects, and $100 per MWh was the very highest they got. In fact, most were in the $60 dollar range. Remember in 2009, we negotiated a deal for 30 MWs of solar for around $165 per MWh. So that means for Austin Energy solar energy prices got chopped by some 70% between 2010 and 2016 when the latest solar projects get built.

Folks, the news for renewable energy in Texas just keeps getting better. Cyrus Reed, Conservation Director, Lone Star Chapter

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.

 

Latest Brattle Report Suggests Either Energy-Only Market or Capacity Market will keep lights on in Texas

In a long-awaited report ordered by the Public Utility Commission, the Brattle Group’s study entitled “Estimating the Economically Optimal Reserve Margin in ERCOT” was released last week and showed that Texas has many options to keep the lights on, including potentially doing nothing.

The study was ordered by PUC Chairman Donna Nelson to determine the most economic reserve margin – literally the amount of supplies over the amount of demand – in Texas. The answer? A reserve of only 10.2 % would be the most economic approach and the good news is based on normal weather patterns Texas’ market would actually provide a 11.5 percent reserve margin in the coming years. In other words, in purely economic terms, Texas’ energy-only market would provide reliable and economic electric power. In fact, in normal years, one would expect less than an hour of reliability issues out of 8760 hours in a year.

Nonetheless, the study also presented an alternative market structure, and suggested that a 14.1 % required reserve margin would be more reliable long-term though slightly more expensive to maintain. The study did suggest that in extreme weather situations – like the 2011 heatwave – the 14.1% required reserve margin would be cheaper during that year because energy prices would  volatile in any energy-only market. Thus, overall a capacity market during an extreme weather year would cost consumers $3 billion less because of lower power outages, while during a normal year, a capacity market would be about $400 million more expensive.

Table. What the Brattle Study Says about the Reserve Margin

Category Energy-Only Case Capacity Market Case Difference
Equilibrium Reserve Margin 11.5% 14.1% 2.6%
Loss of Load Events Per Average Year 0.33 0.23 (-.1)
Loss of Hours Average Year 0.86 0.23 (0.63)
Energy Price  -$/MWh $58 $48 (-$10)
Capacity Price ($/kW-yr) $0 $39 $39
Total Customer Cost ($B/YR) $35.7 $36.1 $0.4
Extreme Weather Year Energy Price $99 $65 (-34)
Extreme Weather Year Capacity Price 0 $76 76
Total Customer Cost (Hedged) $44.7 $41.5 (-3.2)

It is important to note that the Brattle report – like all economic studies – made assumptions about load growth, weather, the impact of demand response, and the amount of wind generation at peak – all of which can be challenged. As an example, the study still assumed that wind production only generates 8.7% of its total capacity during peak summer hours, a number that has been shown through repeated studies and actual data to significantly undercount the value of wind. Thus, the assumed margin are probably in reality higher than reported in the Brattle report.  But the essential message – that the energy-only market in most years would provide reliable and economic energy – at least gives policy makers breathing room and time to make any needed changes to the market.

The Sierra Club believes the answer is actually somewhere in the middle – that a required reserve margin slightly above the economically optimal reserve may be needed assuming that extreme weather events continue to face Texas. As an example, the report notes that assuring a reserve margin of 12.9% would meet the Southwest Power Pool’s reliability standards even in extreme weather events. We believe that assuring some build-out of new generation and new demand response programs – largely through expanded ancillary services — could assure this targeted reserve. Thus, the long-term solutions are not necessarily the imposition of a forward capacity market as has been imposed in markets like PJM and New England at great costs to consumers, but rather targeted programs meant to grow new resources like energy efficiency, demand response, energy storage and solar to meet Texas’s growing electric demand and supply needs. Paying older power plants a capacity payment just for being around is not the way to meet these new needs.

Texas will need to make significant investments in new transmission grids, continued smart meter development and other technologies like energy storage and demand response, while making the market work for these new technologies. It will also need to economically retire its older, dirtier power plants and transition to cleaner forms of energy. Look for our solutions soon!

In the meantime, PUC is expected to schedule a workshop on the Brattle report, as well as an additional study looking at the cost and benefit of each approach to keeping the lights on and ERCOT’s latest supply and demand projections, which are still being debated at the ERCOT Board of Directors.

Latest ERCOT planning report again points to gains for wind and solar

Every month, ERCOT — the Electric Reliability Council of Texas — releases a monthly planning report which reviews existing and new generation resources, asynchronous tie interconnection, transmission planning and other notable activiites. Once again, the December  2013 System Planning report showed significant gains for wind. Thus, several new wind projects went on-line in December, bringing the total amount of wind within ERCOT to 11,255 MWs, including 2,775 MW in the South zone, which is essentially coastal wind resources which tend to blow more consistently during the days. In addition, three new wind projects signed interconnection agreements in West Texas.

According to their latest summary of Generation Interconnection Requests, some 15,301 additional MWs of generation have signed interconnection agreements. Of this, 7,484 MWs is gas generation, and 7,447 is wind generation. Some 130 MWs of solar projects have confirmed interconnection agreements with transmission companies. Only one coal project — the Summit carbon-capture project near Odessa — has a signed interconnection agreement. In addition, some 35,000 MWs of additional generation is in the study phase — looking to see if going forward makes sense. Of this, about 15,000 MWs is gas, and 17,000 MWs is wind, with another 2,700 MWs of solar in the development queue. There are no biomass, nuclear or coal plants, but there are 875 MWs of storage being considered. The planning report shows that the future of electricity in Texas will be some combination of wind, solar, storage and yes, some newer gas units. Coal and nuclear appear to have no future. The Sierra Club will continue to work to set the rules so that the cleanest resources — wind, storage, solar and of course energy efficiency and demand response – can compete and ultimately win. According to our electric grid operator, those resources are already winning!

The report also lists three “ties” — that is devices that allow the ERCOT grid to interconnect with either the Western, Eastern or Mexican electric grids. While a small interconnection will go into effect this year — known as Railroad — there are two major projects being considered which would allow significant renewable resources to move out of Texas to other markets, or alternatively, other markets into Texas’s.  The Southern Cross HVDC — an interconnection with the Eastern SERC grid — could move massive amounts of wind — up to 3,000 MWs — in Texas and Oklahoma (and solar too) into the Southeast, while the Tres Amigas project in eastern New Mexico could allow 1500 MWs of Texas wind into New Mexico, Arizona and California (and perhaps some solar from those states into Texas). While these projects are still undergoing studies, they could revolutionize the use of renewables throughout the Southern US. Sierra Club will also be watching these projects, and is generally supportive, though the location of transmission lines and wind development must be sited appropriately to avoid any special habitats or special places. Onward!

ERCOT issues warnings due to high winter demand: what does it all mean?

With a high-profile discussion going on at the Public Utility Commission, the Electric Reliability Council of Texas (ERCOT) — which runs the state’s power grid — and among stakeholders about whether or not Texas has adequate electric generation, the sudden warning early Monday morning that Texas was facing a power crisis of sots was literally a blast of cold air. Early Monday morning, with arctic winds affecting virtually all of the state, peak power demand hit nearly 56,000 MW hours — the second highest winter peak demand ever.

ERCOT – seeing power demand come dangerously close to total resources online and available — went into Emergency Action Alert Stage 1, calling on some contracts to reduce energy demand through their Emergency Response Service. Then just a short time later, they went into EAA Stage 2, calling upon other resources at their disposal. The crisis was soon over. Demand went down and a couple of plants that had been off-line went on-line.

What happened was a weather extreme, combined with some inopportune maintenance by some plant owners, and two plants that were expected to be on-line were off-line due to malfunctions caused by the extreme cold. While ERCOT did not announce which two plants scheduled to compete to provide power were off-line, one appears to be a unit at the Comanche Peak Nuclear Power Plant. According to the Nuclear Regulatory Commission, the Comanche Peak nuclear power plant was forced to reduce generation in order to repair a water pump. Luminant, which operates the plant, confirmed the repair but declined to answer questions about other facilities according to Reuters.

In addition to the two plants being down unexpectedly, another 13,000 MWs were down for scheduled maintenance since generally in Texas the winter is a time of  low demand. Still those operating did make some money. According to ERCOT’s website, real time prices hit the market cap of $5,000 for nearly an hour Monday morning, before quickly declining after 9 AM.

The PUC will investigate Monday’s outages to see if protocols were followed, said commission spokesman Terry Hadley, while ERCOT will review its maintenance schedule and also whether the new “weatherization” requirements imposed on generators after the last big freeze in 2011 is actually working.

In the meantime, stakeholders will use Monday’s freeze — and the fact that the state came close to implementing rolling brownouts — as part of the discussion on whether Texas needs to fundamentally change its market structure. On the one hand, the system did work, with ERCOT calling on demand response to reduce demand when resources were stretched thin, and market prices did rise, rewarding generators who were able to meet demand when supply was tight. On the other, many would argue that the lack of new investment in fast-responding natural gas plants is cause for concern as population and demand increases in Texas.

Sierra Club has filed extensive comments in the PUC docket on the issue, arguing that relatively small new services can provide the cushion Texas needs, as we continue to invest in demand response, wind and solar. Implementation of new more efficient building codes, expansion of the utility energy efficiency programs, new more favorable treatment of onsite solar in Texas’s competitive markets, and clearer rules for energy storage resources will lead to more investment in these new more flexible technologies. A full forward capacity market, where all generators and demand response providers are paid a market clearing price for simply having the resource available if needed is not the answer in our view. Market forces should cause many of the older and less efficient — and more polluting — plants to retire, which should send a market signal to build newer more flexible plants and invest more in energy efficiency, onsite solar and demand response.

In the meantime, the discussion at PUC, ERCOT and the Texas Legislature will continue about how to keep the lights on, investment coming and modernize our grid, all while keeping prices reasonable.