ERCOT: Electricity A-OK for this summer

Texas’ power supplies won’t dip below dangerous levels this summer or next according to peak demand projections by the grid operator for most of the state.
The 2007 peak demand forecast is 63,794 megawatts, according to the Electric Reliability Council of Texas (ERCOT), a 2.3 percent increase from last year’s peak demand, 62,339 mw. Another 1,125 mw of industrial demand can be turned off at a moment’s notice, bringing the forecast to 62,669 mw.
With about 71,812 mw of generating capacity expected to be available, this summer’s reserve margin stands at 14.6 percent, above the 12.5 percent minimum needed to ensure reliability for extreme temperatures and unexpected major outages, ERCOT said in its annual report on capacity, demand and reserves. The 91-page document can be found here.

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ERCOT control room in Austin.

Next summer the margin is projected to be 12.6 percent, with 72,740 mw of supply and 64,010 mw of demand, while the margin could dip to 10.1 percent in 2009, 8.3 percent in 2010 and 6.7 percent in 2011.
Does this mean Texas is in trouble come 2009 and we should expect Baghdad-like electrical outages? Not really.
ERCOT’s annual reserves report is a snapshot using projected demand and very conservative estimates of generation units that will be available. For example, the only new power plant output it includes in future projections are from projects with signed air permits for operations, with 550 mw of non-wind powered units coming on next year and another 750 megawatts coming on in 2011. But there are many more megawatts worth of projects in the pipeline that simply don’t have the permits today. By this time next year there will likely be many more megawatts of power either on line or cued up to get there shortly. Texas continues to be a profitable place to build and run power plants.
Last year’s projected reserve margins were used by some to inspire anxiety over the state’s power needs because they predicted a dip below the reserve margin as early as this year. Rolling blackouts on April 17, 2006 caused by an unexpected series of events bolstered supporters of plans by TXU for a fleet of new coal-fired plants.
TXU, of course, changed course on many of those projects with the pending buyout by a group of equity investors, but as we reported earlier this year those missing projects don’t necessarily mean imminent doom either.
About 1,252 mw of generation (other than wind) has been added since last summer, including 726 mw of “mothballed” generation returning to service. Over 1,200 mw of additional new wind generation is expected to be available by summer.
New on this year’s assessment is a change in the methodology used for calculating the percent of wind generation expected to be available at the time of summer peak. In the past it was calculated at about 2.6 percent of installed capacity, but now it’s 8.7 percent.

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