ELECTRICITY

Triple-digit temps and record demand? No problem yet for Texas grid operator

HOUSTON -- The expanding patches of brown grass and sweltering conditions here leave no doubt: A real Texas summer has arrived.

After a deluge of rain and milder weather earlier in the year, triple-digit temperatures have descended with a vengeance on Texas and fueled record electricity demand.

The Electric Reliability Council of Texas (ERCOT), the state's main grid operator, reported a peak of more than 68,400 megawatts during the 4 to 5 p.m. hour (local time) last Wednesday, topping a record from 2011. Then it surpassed that level twice Thursday, including with a new high of 68,912 MW from 4 to 5 p.m.

Peak demand figures, which are preliminary and can sometimes include exports, remained high Friday and are expected to be strong again today.

Yet, other than a call for conservation in late July, ERCOT generally hasn't had to ask residential consumers for much help to meet demand on recent hot days. Texas just doesn't seem overly worried about power supplies at the moment.

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"Certainly the system is operating as it was designed to do, and we're very pleased by that," Robbie Searcy, an ERCOT spokeswoman, said last week. "I think it's a source of great pride for ERCOT and should be for the market."

Searcy noted that the grid operator previously said it expected to be able to meet demand this summer, assuming enough generation was available (EnergyWire, May 5). Plant outages can tighten the equation and require action on any given day, as happened on July 30 when ERCOT sought conservation from 3 to 7 p.m. The Lower Rio Grande Valley also was asked to conserve power at certain times in early June.

Besides the weather, Texas grid planning must factor in a growing population. While keeping the lights on may seem like a given, ERCOT has faced questions in recent years about supplies.

But talk of a possible capacity market, which could include payments to generators regardless of whether volumes are needed, has cooled in the last year and a half amid relatively optimistic forecasts for reserves.

John Fainter, president of the Association of Electric Companies of Texas (AECT), applauded ERCOT's efforts during the current heat wave.

"Barring something that's totally unexpected, I think they're doing a great job with it," Fainter said last week. "It's August in Texas. It's supposed to be hot."

Conservation and reliability

New generation has come online in recent years and Fainter said smart meters have helped people manage consumption. Fainter also cited the use of appliances and buildings that are more efficient. He said distributed generation, demand management and conservation likely have played a role too.

While conditions have varied, an area from Dallas to Houston has seen some above-normal conditions after a mild start, according to Chris Coleman, senior meteorologist with ERCOT. Temperatures at 100 degrees Fahrenheit or greater have been widespread in Texas in recent days.

Very hot weather may continue early this week, although Coleman said there could be some retreat in the days ahead and potentially further cooling later in August.

ERCOT did issue an advisory last week to generation and transmission providers in the region to urge them to have facilities available.

Luminant, a power company that's part of Dallas-based Energy Future Holdings Corp., said it helped meet demand by generating more than 13,500 MW during a peak hour Wednesday.

ERCOT noted that about 2,500 MW during a Wednesday peak period came from wind, while wind contributed about 3,400 MW during a Thursday peak time. One MW can power about 200 homes during a peak period in ERCOT.

"We've seen the benefits of the new generation being added to the ERCOT region," Searcy said, "and again appreciate the work that market participants have put in to preparing all their facilities for this summer."

Searcy said it's important for ERCOT to limit conservation requests to times "when we believe it's really needed for system reliability purposes," although people may want to use less energy and save money at other times.

"We don't want consumers to think we just ask for conservation because it's hot," she said.

A more drastic response involves rotating outages, which ERCOT has used sparingly, including in February 2011. There was an instance of rotating outages last year in the Lower Rio Grande Valley, where efforts are being made to bolster infrastructure. But nothing like that has emerged yet this summer.

ERCOT revised its forecast methodology last year to reflect that economic growth and load growth may not be as aligned as once thought.

The outlook for significant demand this month has caused certain ERCOT power prices to climb on the Intercontinental Exchange, according to a report from Platts.

Lingering questions

But the ERCOT region still has some "weak underpinnings," according to Ed Hirs, an energy economist with the University of Houston.

He said the market faces potential power plant retirements, and he said outages may happen more often with aging plants. Hirs said there isn't a lot of incentive for building baseload power plants in the area given the level of average wholesale prices.

ERCOT also doesn't have an adequate enforcement mechanism to make generators perform, Hirs said, citing past concerns about the potential for withholding in the market. And he said wind isn't necessarily the answer at peak times.

AECT's Fainter said Texas always will have to think about the weather, and he said factors such as U.S. EPA's Clean Power Plan also may be felt. That proposal seeks to reduce carbon dioxide emissions from power plants, and ERCOT has said it could lead to retirements of some coal-fired generation.

For now, David Power, deputy director of the Texas office of Public Citizen, said summer seems to be going well in the ERCOT market despite a combination of heat and economic growth.

"We've been able to show that without making major changes to the market, and with the increased amount of renewables that have come on the system as well as cheap gas, that the ERCOT grid is stable and functioning well," Power said.

He said transmission lines that were built in recent years help move wind power to where it's needed, and he suggested more infrastructure could connect solar-rich areas. Power said Texans do like air conditioning, but he said people can use less and save money.

Warm bodies of water, including the Pacific Ocean and Gulf of Mexico, are affecting Texas' weather, ERCOT's Coleman said. And while it's warm right now, the meteorologist said this likely won't go down as one of Texas' hottest summers.

Some of the current reaction about the heat may be almost psychological because the summer started out so mildly here, he said. But even Coleman said the intensity of the recent stretch has exceeded his outlook.

"It's Texas," he said. "We're going to get hot days. This is a little hotter than I had expected."

Twitter: @edward_klumpEmail: eklump@eenews.net

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