Texas Grid Expected to Experience Greater Reliance on Renewable Energy This Summer

by Paul Ciampoli
APPA News Director
May 5, 2023

The Texas power grid is expected to see a greater reliance on renewable energy this summer, the chairman of the Texas Public Utility Commission and the CEO of the Electric Reliability Council of Texas said on May 3.

ERCOT on May 3 released its Seasonal Assessment of Resource Adequacy for the ERCOT Region for this summer and Texas PUC Chairman Peter Lake and ERCOT CEO Pablo Vegas held a news conference that same day related to the summer outlook for the state’s grid.

Lake underscored the point that the SERA report is not a forecast. “This is a scenario analysis that evaluates a range of potential outcomes. It is not a prediction of what will actually happen,” he said.

“Operationally, the ERCOT grid is ready for this summer. The reliability reforms that were put in place have been tested and continue to work,” Lake said. Reforms passed in the last session of the Texas Legislature “have been utilized and put in place to ensure our grid operates more reliably now than it ever has in the past.”

At the same time, he said that the Texas grid “faces a new reality. Data shows for the first time that the peak demand for electricity this summer will exceed the amount we can generate from on demand dispatchable power, so we will be relying on renewables to keep the lights on. On the hottest days of summer, there is no longer enough on demand dispatchable power generation to meet demand in the ERCOT system,” Lake said.

He said that from 2008 to 2022, Texas on demand dispatchable power supply grew only 1.5%. “In that same timeframe, our population grew 24 percent. The increase in demand for electricity is outpacing the supply of on demand dispatchable power,” Lake said.

“In this new reality, our risk goes up as the sun goes down because it’s still hot at 9 p.m.,” he said. “The sun sets faster than the atmosphere cools and our solar generation is all gone, so at that point in the day, we will be relying on wind generation on our hottest days. If the wind does not pick up, we will have to rely on our on demand dispatchable generators and the data is showing us that on our hottest days,” under a certain set of circumstances, “we may not have enough on demand dispatchable generation to cover the gap between when the sun sets – we lose the solar – and when our wind generation picks up.”

For his part, Vegas noted that “we saw several peak demand records set last year. Our all-time peak was set last summer on July 20 at over 80,000 megawatts of demand. And as we continue to experience substantial growth in population with more businesses moving to Texas, and a rapidly growing economy, the demand for energy is growing at a rapidly increasing pace.”

Compared to last year, “our models estimate that this summer’s peak could be about 6,000 megawatts greater than last summer’s. However, we’re only expecting a nominal increase of about 850 megawatts of thermal capacity since last summer.”

He said that the majority of new generation capacity that has been added since last summer in ERCOT continues to come from intermittent resources.

“On the renewables front, we’re expecting about a thousand more megawatts of wind capacity and about 3,400 megawatts of solar capacity compared to last summer’s SERA,” Vegas said.

“As a result, we are expecting to have to rely more on renewables during peak conditions than we ever have before,” Vegas said. “And as a result of this dynamic, this summer could have tighter hours than last summer with a higher risk of emergency operations.”

Details from SERA report

Assuming that the ERCOT region experiences typical summer grid conditions, ERCOT anticipates that there will be sufficient installed generating capacity available to serve the system-wide forecasted peak load for the upcoming summer season, the grid operator said on May 3.

The base summer peak load is 82,739 MW. This load amount is based on average weather conditions at the time of the summer peaks for years 2007 through 2021 and does not incorporate ERCOT’s summer 2023 weather outlook.

The peak load also incorporates load adjustments to account for incremental solar rooftop system additions as well as the interconnection of large loads (such as crypto-mining facilities) to Transmission Service Provider networks and individual generating units.

Over 97,000 MW of summer-rated resource capacity is expected to be available for the summer peak load. This includes 688 MW of planned thermal resources and 372 MW of planned solar resources forecasted to be available by July 2023. The total resource amount also includes 3,544 MW of installed battery storage capacity, with 447 MW of the installed total assumed to be available for dispatch prior to the highest summer net load hours. 

This capacity estimate serves as a proxy for the amount expected during a tight reserve hour for the upcoming summer and is an interim availability assumption to be used until a formal capacity contribution method is adopted for future SARA reports.

ERCOT noted that a 568 MW coal unit changed its operations from year-round to summer only. The total amount of capacity associated with units operating only during the summer now stands at 704 MW, which is the highest amount since summer 2016.

ERCOT and thermal generation owners are closely monitoring the potential impacts of the U.S. Environmental Protection Agency’s March 15th approval of its “Good Neighbor Plan” for reducing cross-state emissions of ozone-forming nitrogen oxides.

Several generation owners in the ERCOT region indicated the potential that certain generators may face operational constraints in complying with the program’s provisions as soon as July 2023.

Texas, Louisiana and other parties filed a motion with the Fifth Circuit court to stay the EPA’s regulatory action due to potential reliability impacts. On May 1, 2023, the court granted the motion to stay the EPA action.

The summer SARA includes a typical thermal generating unit outage assumption of 5,034 MW. This outage assumption is based on historical outage data for the last three summer seasons (2020, 2021, 2022).

The summer SARA includes two Risk Scenario tabs: Base & Moderate Risk Scenarios, and Extreme Risk Scenarios. The most severe Risk Scenario assumes a high peak load, extreme unplanned thermal plant outages based on historic observations, and extreme low wind power production.