Texas grid sets another peakload record; tame prices more bullish for July 20-21

The Electric Reliability Council of Texas on July 18 set a peakload record for the third time in five days amid a blistering heat wave. Robust renewables output and inexpensive natural gas kept systemwide real-time prices below $63/MWh.

However, more record peakloads are forecast through July 21 with lighter wind output expected, ramping up July 20-21 pricing in July 19 trading.

ERCOT load peaked at 82.6 GW July 18, up from the July 17 record of 81.9 GW, which was up from the July 13 peak of 81.4 GW. The National Weather Service had excessive heat warnings or advisories for most of Texas and forecast high temperatures and heat indexes, when available, for the following major metro areas in Texas:

• Dallas: high of 105 degrees F, heat index of 109 July 19; high of 103 July 20; high of 102 F July 21
• El Paso: high of 109 F July 19; high of 107 F July 20; high of 105 F July 21
• Houston: high of 101 F, heat index of 109 July 19; high of 98 F, heat index of 103 July 20; high of 97 F July 21
• San Antonio: high of 104 F July 19-20; high of 103 F July 21

ERCOT forecast at 12:30 pm CT July 19 that load would peak around 83.4 GW July 19-20 and would peak around 82.9 GW on July 21. ERCOT's summer 2023 Seasonal Assessment of Resource adequacy forecast a seasonal peak of 83.4 GW.

Cheap real-time power

During the record peakload day of July 18, systemwide hub real-time locational marginal prices averaged $20.75/MWh, ranging from a minimum of $11.08/MWh around 3:30 am CT and a maximum of $62.74/MWh around 7:15 pm CT.

For the same day, the ERCOT wind fleet produced at an average level of 20.8 GW, ranging from a minimum of 17.7 GW to a maximum of 24.3 GW. ERCOT's summer SARA modeled the wind fleet to be producing at a level of 10.4 GW during the seasonal peak hour, typically the hour ending at 5 pm CT. At that hour on July 18, the ERCOT wind fleet would be producing almost 17.9 GW.

Also on July 18, the ERCOT solar fleet produced at an average level of 9.2 GW for the 13 daylight hours from 7 am to 8 pm CT, from a minimum of 330 MW to a maximum of 11.4 GW. At the peak hour on July 18, the solar fleet was producing at a level of 11 GW, compared with the SARA seasonal peak hour solar output of 12.3 GW.

Prices surge for July 20-21

In trading on the Intercontinental Exchange July 19, ERCOT North Hub on-peak power traded around $170/MWh for July 20 delivery, about 3.6 times the closing price of about $47.50/MWh for July 19 delivery, and the balance-of-week July 21 contract traded around $238.50/MWh.

The main concern causing a bidding up of July 20-21 power is probably a diminishing wind forecast. Around 1 pm CT July 19, ERCOT forecast the system's fleet to be producing at a level of less than 8.9 GW for the hour ending at 5 pm CT July 20 and less than 7 GW for that hour on July 21.

ERCOT forecast its solar fleet to be producing more than 12 GW during the peak hour ending at 5 pm CT July 20-21.

Platts assessed Houston Ship Channel gas around $2.32/MMBtu for July 20 delivery, up slightly from the $2.30/MMBtu for delivery July 19, less than a third of the $7.06/MMBtu average on July 19, 2022, and about 14% less than the 2017-21 average of $2.70/MMBtu. Platts is part of S&P Global Commodity Insights.

The amount of gas generation output in GWh was not yet available for July 18, but S&P Global estimates the power burn at about 6 Bcf/d, compared 5.85 Bcf/d a week earlier, July 11, when the system produced 736.9 GWh.

For July 1-17, the ERCOT generation fleet produced an average of 749.6 GWh/d, compared with 752.3 GWh/d for the same period of 2022.

ERCOT's power burn for July 1-17 averaged almost 6 Bcf/d, up from 4.8 Bcf/d for the same period of 2022.