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ERCOT expects to have enough resources to meet winter peakload: report

Highlights

Jan-Feb 2022 forwards weaken after release

'Extreme' scenarios could cause load loss

The Electric Reliability Council of Texas expects to have sufficient resources to meet expected peakload in the winter of 2020-21 in all except the most extreme scenarios with high generation outages and low renewable output, a new report shows, and winter forwards weakened following the report's release.

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"Assuming that the ERCOT Region experiences typical winter grid conditions, ERCOT anticipates that there will be sufficient installed generating capacity available to serve the systemwide forecasted peak demand for the upcoming winter season, December 2021-February 2022," according to the Seasonal Assessment of Resource Adequacy for the ERCOT Region Winter 2021-2022, released Nov. 19.

On Nov. 22, ERCOT North Hub January-February 2022 on-peak forwards fell about $3.75 to about $70/MWh, after averaging about $79.85/MWh for Nov. 1-19, according to S&P Global Platts M2MS Forward Index. For the year through Nov. 19, that package has averaged less than $58/MWh.

The report indicates that ERCOT has a planning reserve margin of 43.3%, meaning that total expected resources exceed forecast load by 43.3% of forecast load. As context, the equivalent planning reserve margin based on the final winter 2020-2021 SARA equaled 50.3%.

"ERCOT's new aggressive approach to managing the electric grid is continuing, with significant operational improvements over the summer of 2021 and additional changes planned for the winter of 2021-2022," the new report states.

'Extreme risk scenarios'

Along with the more typical and likely scenarios, the latest report includes several additional "low-probability, high-impact ... extreme risk scenarios," and rotating outages could be required in four of the nine total scenarios included in the winter SARA.

Three of the four scenarios that could entail rotating outages include low renewable output, and the fourth is an "extreme low renewable output" scenario. Two of these four rotating outage scenarios would entail extreme unplanned thermal outages.

"Two thermal generation resources -- a coal and a gas-fired unit -- are out of service for the winter season," the SARA states. "Also noteworthy is that three units (two gas-fired and one biomass-fired) representing 223 MW that previously operated only during the summer season are now planned for year-around operation."

The extreme thermal generation outage scenarios were based "on the maximum hourly unplanned outage amount for December through February weekdays, hours-ending 7 am-10 am, for the last three winter seasons (2018-19, 2019-20, and 2020-21)," excluding the Winter Storm Uri-related unplanned outages between Feb. 15 and Feb. 28, the report states.

As context, almost 49% of ERCOT's 82.5 GW of generation was forced offline at the peak of that storm's impact, according to an ERCOT presentation.

Winterization improvements

The report includes in some scenarios increased expectations for generation availability because of the winterization standards recently set by the Public Utility Commission of Texas. For the "high generation outages" and "extreme generation outages" scenarios, the improvement is expected to be 2.9 GW and 5.1 GW, respectively. An additional 224 MW of renewables is also expected to be available because of the new winterization standards.

In the three worst-case scenarios, the amount of unserved load would range from 792 MW to almost 4.4 GW. As context, ERCOT had to shed 20 GW of firm load during the most challenging period of Winter Storm Uri in order to avoid a cascading blackout.