ERCOT Reserve Margin Up for Summer 2020, Energy Alerts Still Possible

The ERCOT region will likely experience record electric use this summer driven by summer heat. 

ERCOT Wednesday released its final Seasonal Assessment of Resource Adequacy (SARA) for the upcoming summer season (June – September), a preliminary assessment for fall and an updated Capacity, Demand and Reserves (CDR) Report.

“There is a lot of uncertainty in today's world, but we are confident that Texas will still be hot this summer,” said ERCOT President and CEO Bill Magness. “Texans will need electric power as they do every summer, and ERCOT is prepared to do our part to keep it flowing reliably." 

ERCOT adjusted its peak load forecast to 75,200 MW to account for economic impacts related to COVID-19. The new forecast is 1,496 MW less than what was reported in the preliminary summer SARA and increases the summer 2020 reserve margin to 12.6%, up from 10.6%. However, the new forecast is still higher than ERCOT’s all-time peak demand record of 74,820 MW set on Aug. 12, 2019.

The grid operator anticipates there will be sufficient generation to meet the expected demand under normal/expected operating conditions. However, extreme weather, low wind output and higher-than-normal generation outages may result in the need to declare Energy Emergency Alerts (EEAs).

Since the preliminary summer SARA was released, seven planned wind, solar, and storage projects totaling 979 MW and contributing 276 MW to summer peak began commercial operations. Approximately 411 MW of planned resource capacity expected to be available during peak demand hours (mostly wind) has been delayed beyond summer 2020, and only one small battery project has been delayed due to COVID-19.

The Capacity, Demand and Reserves (CDR) Report reflects pre-COVID load forecasts due to the high level of uncertainty in how the pandemic will affect future years. ERCOT will continue to monitor changes and make adjustments as needed, and a special tab was created in the report to show how COVID-19 could impact peak demands and planning reserve margins through 2024.

Based on the pre-COVID load forecast of 78,299 MW, the planning reserve margin for summer 2021 is forecasted to be 17.3%. According to the report, the planning reserve margin is forecasted to increase to 19.7% in 2022 and then decrease to 18% in 2023.

Since the December 2019 CDR, resources totaling 2,273 MW have been approved by ERCOT for commercial operations, with summer peak capacity contributions of 790 MW. New planned resources eligible for inclusion in the report since the last CDR total 6,540 MW.

Based on preliminary data provided by generation project developers, planned capacity additions for summer 2021 total 17,993 MW. The majority of these planned projects are renewables and some small, flexible gas-fired resources.

The CDR and SARA reports reflect the anticipated resource capacity available to meet the forecasted summer peak demand. This anticipated capacity may differ from what will actually be available based on system conditions and the operational status of the resources.

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