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ERCOT tightens summer 2017 power supply-demand forecast

Houston — A more robust economic outlook prompted the Electric Reliability Council of Texas to forecast next summer's power supply to be tighter than it had forecast in May, but ERCOT should have sufficient supply to meet demand, a new report shows.

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ERCOT's latest Capacity, Demand and Reserves Report, released Thursday, includes expected peakload forecasts and capacity for the next 10 years. ERCOT issues the CDR usually in May and December of each year.

"Thanks in large part to a healthy economic outlook, the ERCOT region expects to see customer demand grow at higher levels than previously projected," Warren Lasher, ERCOT senior director of system planning, said in a statement.

The CDR takes into account the startup of a new LNG facility on the Gulf Coast, but does not include the proposed addition of Lubbock Power and Light to the ERCOT system, because the Public Utility Commission of Texas has not yet ruled on that change.



ERCOT forecast demand to peak at 72,934 MW in summer 2017, which would represent a substantial increase from ERCOT's record of 71,197 MW, which occurred August 11. After reductions from energy efficiency and demand response, ERCOT expects "firm peak load" of 70,361 MW next summer.

This summer load forecast is based on an average of the previous 14 summers.

In contrast, the May CDR forecast demand to peak at 71,416 MW in summer 2017 and "firm peak load" to be 68,548 MW.

As for resources, the new CDR indicates that ERCOT expects to be able to rely on 78,251 MW of generation capacity, including an effective peakload carrying capacity of 427 MW of solar power, 1,187 MW of coastal wind and 2,142 MW of noncoastal wind.

After adding available contributions from outside ERCOT and generation capacity expected to be online by next summer, ERCOT would have capacity totaling 82,246 MW of resources.

The difference between total capacity and total firm peakload, is 11,885 MW, which equals 16.9% of the firm peakload, which is the "planning reserve margin," which the PUC considers important in determining reliability on the ERCOT system.

The May CDR forecast 76,697 MW in existing resources or 80,995 MW of total capacity, including expected contributions from outside ERCOT and generation to be brought online, leaving an 18.2% planning reserve margin.

The PUC has established 13.75% as a target minimum planning reserve margin, and the CDR forecast ERCOT's summer planning reserve margin to remain above that number until 2025, but planners take less seriously reserve margins toward the far end of the time horizon, because generation developers "usually do not begin the interconnection process more than three to five years prior to expected operations," an ERCOT media release said.

"Based on the information we have today and current planning criteria, we continue to see sufficient planning reserve margins through most of the 10-year planning horizon," Lasher said. "While generation resource development in the next several years is expected to keep up with this growing demand, we also could see a number of existing resources retire."

Thursday's CDR was the first time ERCOT has followed a new format in which most of the document focuses on the next five years, 2017 through 2021, while a "supplemental section" at the end of the document provides longer-timer supply-demand forecasts for the period 2021 through 2026.

The CDR also included a forecast for peakload and available resources for the winter of 2016-17. ERCOT forecast total power demand to hit 54,417 MW this winter, but after taking energy efficiency and demand response into account, "firm peakload" is expected to be about 52,079 MW. With total existing and expected generation, ERCOT forecast resources to total 82,523 MW, which provides a planning reserve margin of 58.5% for this winter.

--Mark Watson, Markham.watson@spglobal.com
--Edited by Jason Lindquist, jason.lindquist@spglobal.com