The Electric Reliability Council of Texas (ERCOT) expects transmission providers in the Lone Star State to complete nearly $9bn in improvement projects by the end of 2017 to help meet growing demand and relieve congestion on existing transmission pathways.
That figure, which included the competitive renewable energy zone (CREZ) transmission projects, is contained in ERCOT’s Electric System Constraints and Needs Report. Released Dec. 28, the report identifies existing and potential constraints that could create reliability concerns or increase power costs for consumers in the next five years.
By far, the most significant constraints experienced on the ERCOT system, and also the greatest challenges in planning the system, were due to the rapid expansion of oil and gas exploration and production in Texas, ERCOT said in the report.
“As we see the gap between available generation and peak electric demand become tighter over time, it becomes increasingly important to deliver new power resources to the grid as quickly, reliably and cost-effectively as possible,” Trip Doggett, ERCOT’s CEO, said in a statement accompanying the report.
The report notes that the revitalization of the Permian Basin oil play in West Texas has increased electric demand “at unprecedented rates in some areas causing a substantial amount of congestion on some transmission elements.” The development of the Eagle Ford Shale play in South Texas has also caused the need for transmission system improvements.
According to the report, the primary difference between the two areas from a transmission perspective is that demand growth in the Permian Basin area has occurred primarily at existing electricity delivery points, while demand in the Eagle Ford Shale area has materialized in areas with little or no electric transmission infrastructure.
Short-term transmission upgrades and changes to system configuration in west Texas are expected to reduce congestion sufficiently until long-term solutions come on line by the end of 2013.
Upgrading the system in South Texas is going to be a longer-term, and more expensive, process.
The regional planning group (RPG) and ERCOT reviewed five sets of transmission projects proposed to serve the Eagle Ford Shale area in 2012, and two more sets of projects are currently under review, ERCOT said. The seven projects, with a total estimated cost of $296.9m, are expected to enter service between 2013 and 2017.
Elsewhere on the ERCOT System, the competitive renewable energy zone (CREZ) transmission lines are expected to resolve a long-standing constraint between West Texas, where most of the state’s wind generation is located, and the North Texas region, which includes the Dallas-Fort Worth area. The CREZ projects are expected to be completed and energized by the end of 2013.
“However, with more than 20,000 MW of new wind power currently being studied, new constraints could occur in future years, particularly in the Panhandle region,” ERCOT said.
The most recent cost estimate for the CREZ projects was estimated at $6.87bn, approximately a 0.4% decline from the second quarter of 2012, according to the October CREZ progress report prepared for the PUCT by consulting firm RS&H.
In the Lower Rio Grande Valley, a new 345-kV import line and the upgrade of the two existing 345-kV import lines are part of a project to increase the overall import capability into that area. Those upgrades are expected to be in service by 2016.
In addition, a new 345-kV line that runs from the west side to the east side of the Lower Rio Grande Valley area is planned to help meet reliability needs in and around the Brownsville, Texas area. Those projects have a total estimated capital cost of almost $800m, ERCOT said.
ERCOT also expects transmission congestion in the Houston area this year because some paths used to deliver power to the area will be out of service while they undergo improvements.
In other areas, growing demand and construction-related outages could result in significant congestion on 17 different circuits, the grid operator said. Congestion could affect the cost of power in the affected regions as generation from less efficient resources is used, and is transmitted to those areas along alternate pathways.
ERCOT has also released a long-term system assessment, which provides an assessment of system needs over the next 10 to 20 years. That report looked beyond the five-year ERCOT stakeholder planning horizon and evaluated a range of possible scenarios that could affect the types and locations of generation resources, as well as consumer energy use patterns.
The results indicate that at least one path to import power into the Houston region will be needed in the next 10 years as regulatory requirements will limit development of new generation within that region. The report also said another transmission circuit will be needed to serve the Lower Rio Grande Valley unless additional generation is developed locally.
Within the 20-year study period, the report said that potential retirement of older natural gas-fired resources in urban areas could require building more transmission facilities within the Dallas-Fort Worth and Houston regions to support capacity and voltage stability.
In addition, the report said that iIf market factors result in significant growth in renewable resources, “it may become cost effective to develop higher voltage transmission solutions to connect those resources to areas where electric consumption is high.”
“Although these are long-term outcomes of a variety of potential conditions, they help to inform the more immediate five-year plan, which is updated annually,” ERCOT said.
In its role as the transmission planning authority for the region, ERCOT works with transmission and distribution providers and other stakeholders to identify the need for new transmission facilities based on engineering analysis of operational results, load forecasting, generation interconnections, and transmission and system studies.