Wednesday, January 23, 2019

Plentiful Generation Helps ERCOT Meet Extreme Demand

By Tom Kleckner

ERCOT executives said Tuesday that system generation has overperformed during the summer, helping the grid operator meet demand during July’s record heat and loads.

ERCOT Dan Woodfin demand


“We saw a real test of the system,” CEO Bill Magness told the ISO’s Board of Directors. “The fleet performed well, and everyone in the market was very aware of what was coming and what we needed to do. It was a good testament to how the participants in the market can perform and how they worked in a stressed situation.”

ERCOT, which manages about 90% of the Texas grid, set a new systemwide peak of 73.3 GW on July 19, breaking the record set in August 2016 by more than 2 GW. Its new weekend demand record of 71.4 GW on July 22 also broke the old mark of 71.1 GW.

All told, demand exceeded the old record during 14 intervals over July 18-23. Demand exceeded 70 GW between July 16 and 24 as a dome of high pressure settled over the state and sent temperatures into triple digits and some heat indexes to about 110 degrees Fahrenheit.

Staff this spring projected a summer peak of 72.97 GW in August.

ERCOT Dan Woodfin demand

ERCOT’s Dan Woodfin | © RTO Insider

Having plenty of generation to call on was key, said ERCOT Senior Director of System Operations Dan Woodfin. He noted generation outages in July were “significantly lower” than what the grid operator has historically seen.

ERCOT began the summer with 78.2 GW of available capacity and added 612 MW of gas generation in July. Wind power averaged daily output of 6.6 GW in July, above pre-summer expectations of 4.1 GW.

“The peak day, the 19th, the outages were almost 2,000 MW less than on the peak day last year. We saw that pretty consistently over that period,” Woodfin said. “The cooler weather that we’ve had the last couple of weeks has allowed the units to regroup and fix some things.”

The availability of generation helped minimize tight conditions and keep prices stable. Forward contracts for August delivery reached $239/MWh in May, but they have since fallen back into double digits.

Kenan Ogelman, ERCOT’s vice president of commercial operations, said the operating reserve demand curve (ORDC) has worked as designed. The ORDC creates a real-time price adder reflecting the value of available reserves; it is meant to incentivize resources to produce more energy and reserves.

ERCOT Dan Woodfin demand

ERCOT’s Operations Center | © RTO Insider

“The pricing outcomes we’ve seen in the market are associated with expectations,” Ogelman said. “The incentives are also there to put power online, at the times they’re needed.”

He said congestion in the West region, driven by high load growth and combined with the way ERCOT produces load distribution factors, did lead to more than $30 million in uplift costs in June alone. “Wow!” one board member near an open mike exclaimed.

Staff shared operational data from May and June but promised additional information during the board’s October meeting.

“We’re pleased with how it all went, but it’s only Aug. 7,” Magness reminded the board. “We have a lot more August and September to go.”

Below-normal temperatures and rain have helped cool things off over the last week.

“This week has sort of been a dud, and next week won’t be much different,” said the ISO’s senior meteorologist, Chris Coleman. He said “there’s always an opportunity” that extreme heat will return in the next three or four weeks.