Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.

  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Electric Power

ERCOT to have tighter power supply in summer 2016: report

Natural Gas | Oil

So what happened at MPGC 2019?

Electric Power

Platts M2MS-Power

Commodities | Energy | Electric Power | Emissions | Renewables | Natural Gas | Natural Gas (North American)

Northeast Power and Gas Conference

ERCOT to have tighter power supply in summer 2016: report

Houston — An Electric Reliability Council of Texas report released Tuesday shows the independent system operator expects the supply of electricity to be tighter in summer 2016 than it did in the May version of the report.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

ERCOT's Capacity, Demand and Reserves report, which is issued twice a year, forecast a planning reserve margin of 16.5% in the coming summer. When the same report was issued in May, it projected that summer 2016 would have a 17% planning reserve margin.

The latest CDR reflects increased expected summer peak demand, at 70,588 MW, versus 70,014 MW in the May CDR. ERCOT's record peak demand, 69,783 MW, was set August 10.

The newest CDR's load forecasts -- which rise to 77,732 MW by summer 2025 -- are based on average weather over the past 13 years plus additional demand from a LNG facility being developed in Freeport, Texas, and scheduled to come online in summer 2019.

The latest CDR also reflects less expected generation additions from resources other than wind or solar, at 1,068 MW in the latest CDR versus 1,780 MW in May CDR.

Also, the latest CDR shows less noncoastal wind power additions by summer 2016, at 205 MW, versus 493 MW expected load carrying capacity by new noncoastal wind resources in the May CDR. ERCOT assumes that noncoastal wind resources can only be depended upon at a 12% capacity factor during peak times.

Somewhat mitigating these changes that tightened the supply picture in the latest CDR was the expected addition of 102 MW of solar capacity in summer 2016, versus zero in the May CDR.

In contrast with this coming summer's tighter supply picture, the latest CDR shows forecasts for larger reserve margins for each summer from 2017 through 2025, and all of the planning reserve margins for those forecast periods exceed ERCOT'S 13.75% target. The May CDR showed summer planning reserve margins dipping below the target from 2023 to 2025.

"We are seeing significant growth in planned resources to help meet growing electricity needs in the coming years," Warren Lasher, ERCOT director of system planning, said in a statement. "While we currently are seeing planning reserve margins top 20% in the next several years, some of this growth could be offset by unit retirements as changing environmental rules begin to take effect."

But Jeff Schroeter, the Dallas-area managing director of Genova Power Advisors, a generation developer and consultancy, expressed doubt about some of the generation additions included in the latest CDR.

"I think only about half of the planned additions for 2018 and beyond will be completed on the current time line [of 2018 to 2019]," Schroeter said.

"There is simply too much new capacity chasing too little revenue to finance new construction," Schroeter said. "The completed projects will likely be either ultra-low heat rate gas ... or ultra-low capital peaking generation."

An ERCOT statement said that generation resources included in the CDR are based on reports by resource owners.

"This outlook could change based on new environmental regulations that are being implemented or have been proposed by the US Environmental Protection Agency," ERCOT said. "Other recent reports summarize potential impacts of additional unit retirements associated with the Clean Power Plan and the proposed Regional Haze Federal Implementation Plan."

ERCOT's analysis of the impact of CPP and the Regional Haze Federal Implementation Plan, released October 16, forecast additional coal and gas plant retirements ranging from 4,000 MW to 4,700 MW by 2030, while the analysis forecast an additional 4,300 MW to 11,000 MW of solar, wind and natural gas resources being added in that time.

--Mark Watson,
--Edited by Jason Lindquist,