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USA Market: ERCOT issues conservation alert as temperatures rise

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The Texas grid operator, ERCOT, has once again issued a conservation alert urging consumers to reduce electricity demand or risk rolling blackouts.

In a statement, issued on 14 June, ERCOT said a significant number of unexpected power plant outages. Generator owners have reported approximately 11,000 MW of generation is on forced outage for repairs; of that, approximately 8,000 MW is thermal and the rest is intermittent resources. This is combined with record use of electricity due to hot weather. ERCOT demand for electricity could exceed 73,000MW on Monday. The previous record for June was 69,100MW in 2018. ERCOT has said it’s unlikely that rolling outages will be needed at this time.

ERCOT data indicated that 11,000 megawatts of generation capacity is currently offline for repairs and maintenance, well above the 3,600 MW that is normally offline for this time of year. A similar situation existed on April 13-14, when ERCOT was forced to issue a conservation alert following inadequate generating capacity on two of the mildest weather days of the year thus far.

S&P Platts reported that Real-time locational marginal prices across major ERCOT zones reached almost $2,000/MWh around 2:15 pm CT, the current systemwide cap. Prices also rose for forward contracts on ICE, with ERCOT North Hub July-August on-peak jumping more than $40 on the day to trade at $133/MWh. July and August contracts rose similarly to price at $125/MWh and $144/MWh, respectively.

Leah Layton, Market Development Manager at GridBeyond said:

“In Texas electricity demand is driven by temperatures, and right now it is close to 100 degrees across much of the state so the increase in demand isn’t surprising. However, the level of outages is unusual for this time of year – typically only about 3,600MW of thermal generation are offline in June. Power plants have had a rough year given the damage during the February outages, which may be causing complications.

“Barely a month ago, ERCOT released its summer assessment of resources where it said it expected no system problems across most of its scenarios. But in a scenario of very low wind and solar generation output on an extreme demand peak the grid could fall short by up to 14,584MW. Given that 30% of the plants offline on Monday were renewable, perhaps it’s a signal that one of ERCOT’s Extreme Reserve Capacity Risk Scenarios is on the cards for 2021? The fact that ERCOT has had to issue inadequate capacity warnings three times before summer even begins seems to suggest so.”

Wayne Muncaster, VP for North America at GridBeyond, said:

“This is likely to be a summer full of conservation alerts, if you’re on an Index or Block and Index contract in Texas, speak to us about how best to manage your position this summer. The combination of our ERCOT price forecasting and automated dispatch allows our clients to see the problem hours in advance and/or react in real-time – allowing them to secure revenue and summer-proof their operations.”


For more information on how GridBeyond’s technology can help your business improve its bottom line through enhanced energy services, contact our friendly team.


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