ERCOT's Latest May 2023 CDR Report: What to Expect in Texas' Electricity Market for Summer and Winter Seasons

ERCOT (Electric Reliability Council of Texas) is responsible for managing the flow of electric power to more than 26 million Texas customers, representing about 90 percent of the state's electric load.

The Texas electricity market has numerous factors that influence the supply and demand of electricity. ERCOT (Electric Reliability Council of Texas) is responsible for managing this system and ensuring that there is enough power to meet the needs of consumers at all times. In its recent Capacity, Demand, and Reserves (CDR) report, ERCOT has provided an update on the expected peak demand and available resources for the upcoming summer and winter seasons.

According to the report, the forecasted peak demand for summer 2024 is 85,029 MW, while the firm peak demand (which includes the impact of curtailable load programs) is 81,643 MW. The winter 2024-25 peak demand forecast is 71,547 MW, and the firm peak demand forecast is 68,835 MW. These forecasts take into account the expected load increases during peak demand hours due to the interconnection of large loads such as crypto-mining facilities to transmission service provider networks. ERCOT assumes that these large loads will only consume 10% of their total load, and there are also approximately 760 MW of large loads connected directly to co-located generation plants.

To ensure the stability and reliability of the electricity grid, ERCOT needs responsive reserves that can balance the supply and demand of electricity in real-time. Load resources play an important role in providing these responsive reserves since they can be activated quickly and provide the flexibility needed to respond to changing conditions on the grid. In the November 2022 CDR report, ERCOT reported 910 MW of load resources providing responsive reserves. Moving forward to May 2023, ERCOT expects an increase in load resources providing responsive reserves by 500 MW, bringing the total to 1410 MW.

The Planning Reserve Margin for summer 2024 is forecasted to be 33.9%, representing a decrease of 6.0 percentage points relative to the 39.9% margin reported in the November 2022 CDR report. This decrease is mainly due to delays in planned projects that were expected to be in service by July 1, 2024. However, the Reserve Margin is expected to rise to 44.2% for summer 2025, largely reflecting solar capacity additions, much of which represents project delays from prior years.

ERCOT expects 26,230 MW of planned resource capacity to be available by July 2024, with 14,038 MW expected to be available during peak load periods. This includes 1,335 MW of summer-rated gas-fired resources, 542 MW of wind resources, and 12,161 MW of solar resources. ERCOT expects this amount of solar and wind capacity to be available on an average basis during seasonal peak demand hours (the peak-average capacity contribution). Since the November 2022 CDR report, two new gas-fired resources totaling 233 MW have qualified to be included in this CDR.

ERCOT also forecasts 10,340 MW of installed battery storage capacity by July 2024, but ERCOT protocols currently do not include a methodology for determining the peak-average capacity contribution of battery storage, so the contribution in this CDR is officially reported as zero MW. However, ERCOT has developed an interim capacity contribution methodology for the SARA reports, and the summer 2023 capacity contribution percentage is 17.9% based on this interim method. Applying this percentage to the summer 2024 installed capacity yields a capacity contribution of 1,851 MW. ERCOT is also developing a capacity contribution methodology for future CDR reports.

In conclusion, ERCOT's CDR report provides a comprehensive overview of the expected peak demand and available resources for the upcoming summer and winter seasons. While there are challenges in ensuring the stability and reliability of the Texas electricity market, ERCOT's recent Capacity, Demand, and Reserves (CDR) report sheds light on the expected peak demand and available resources for the upcoming summer and winter seasons, and the steps they are taking to maintain grid stability and reliability despite these challenges.

1. The information presented in this conversation is based on the ERCOT Capacity, Demand, and Reserves (CDR) report from May 2023.
2. The thoughts and opinions expressed in the above article are solely those of the author and do not necessarily reflect the views of any individual or organization.