Houston — Record demand and reduced wind generation caused spot prices across its hubs in the Electric Reliability Council of Texas to jump more than 375% year on year during August, which saw several days of triple-digit temperatures in most major metropolitan areas.
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ERCOT West Hub had the largest year-on-year increase of 384% and averaged around $182.25/MWh.
The smallest year-on-year increase was seen at the Houston Hub, which rose 378% to average $182.50/MWh.
ERCOT North Hub spot prices also averaged near $182.50/MWh during August, up 383% from the same month a year ago.
Month on month, ERCOT spot prices increased between 395% and 402%.
ERCOT North Hub achieved a new day-ahead on-peak locational marginal price record of $757/MWh August 16. All other ERCOT hubs also traded in the mid- to upper $750s/MWh on that day.
On August 13 and 15, real-time locational marginal prices reached $9,000/MWh and remained there for several 15-minute pricing intervals.
During August, ERCOT peakload posted several records. ERCOT peakload set an all-time record of 74,666 MW August 11, according to the grid operator, replacing the previous all-time record from July 2018.
Also, weekend peak demand records were set on August 9 and 10.
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Compared with August 2018, ERCOT's average peakload was 7% higher. Month on month, ERCOT peakload rose 5%.
High demand caused reserve margins to drop below 2,300 MW August 13 and 15, prompting ERCOT to issue level one Energy Emergency Alerts. The last time ERCOT issued an EEA was in January 2014, according to an ERCOT press release.
Cooling degree days were up between 9% and 19% year on year across the ERCOT footprint, according to US National Weather Service data, helping elevate power demand. Also, there were between 17% and 51% more cooling degree days than normal during August across the ERCOT region.
Though power prices and demand soared during August, natural gas prices at the Houston Ship Channel fell 30% year on year to average around $2.096/MMBtu. Month on month, Houston Ship Channel spot gas fell 7%.
Natural gas generation accounted for 57% of the ERCOT fuel mix during August, up from 53.2% in July and 50.7% in August 2018. The natural gas share of the fuel mix has increased every month this year, according to ERCOT data.
In contrast, coal generation fell from 24.2% of the fuel mix in August 2018 to 17.7% in August 2019.
Wind generation declined for the fourth straight month and accounted for 14.4% of the fuel mix in August, down from 15.7% in July. In August 2018, wind generation made up 14.2% of the fuel mix.
The ERCOT North Hub September on-peak contract averaged $38/MWh in August, up 10% month on month. Year on year, however, the ERCOT September 2018 on-peak contract fell 4% in comparison with August 2018's average. Similarly, the Houston Ship Channel September contract was 26% lower year on year during August.
Through Wednesday, day-ahead on-peak power prices at ERCOT North in September have averaged $196.51/MWh, after setting a record of $973.59/MWh September 5 during a heat wave. But since September 7, that price has averaged $30.69/MWh.
The ERCOT North Hub July-August 2020 on-peak package averaged in the low $120s/MWh during August, jumping 34% month on month.
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-- Edited by Bill Montgomery, email@example.com