ERCOT report finds adequate generating capacity through 2018

The latest 10-year Capacity, Demand and Reserves (CDR) report by the Electric Reliability Council of Texas (ERCOT) shows that, based on current information, planning reserve margins are expected to exceed 15% through 2018.

The report, released Dec. 1, reflects several changes since the last CDR report was released in May, including the addition of new generation resources and improvements to the method used to forecast wind generation availability during the hours when electricity demand is highest. It also continues to use a revised load forecasting methodology that ERCOT implemented in February 2014 to reflect the changing relationship between economic growth and peak electric demand.

“Based on current information, ERCOT expects to have sufficient generation to keep up with demand and maintain the planning reserve margins needed to support reliable operations in the next several years,” said ERCOT Director of System Planning Warren Lasher.

The new report shows a reserve margin of 15.7% in summer 2015, based on peak demand of 69,057 MW, including 2,343 MW that participate in various demand response programs, and more than 77,000 MW of anticipated generation capacity.

This CDR does not include potential impacts of several environmental regulations that are being implemented or have been proposed, including a recent update from the U.S. Environmental Protection Agency regarding its rules to reduce SO2 emissions associated with regional haze. At the time the report was released, ERCOT had not received new information from generation owners about future plans for those resources that could be affected. ERCOT recently released a report on potential impacts of the EPA’s CO2-reducing Clean Power Plan and is developing a comprehensive study on the expected impacts of these and other regulations. The full study is scheduled for release in mid December.

“This forecast is a snapshot of our expectations in the coming years, and we’ll continue to monitor the situation closely,” Lasher said. “The specific forecast could change as generation owners announce new resource additions and any changes to their future operating plans for existing resources.”

Since the previous CDR was released in May, generation companies in the ERCOT region have added more than 2,100 MW of new gas-fired generation, more than 700 MW of wind generation and a 38-MW commercial-scale solar generation facility. Planned resources that were not included in the May report include more than 1,500 MW of natural gas-fired generation, 2,500 MW of wind resources and another 105 MW of solar.

In previous CDR reports, all wind generation resources were counted at 8.7% of the total nameplate capacity. Now, after evaluation of historical operations during previous peaks, ERCOT is assigning different values to facilities in the Gulf Coast region and in other parts of the state, and those estimated capacity values differ from summer to winter.

For summer, ERCOT is counting on 12% of nameplate capacity from non-Coastal wind resources and 56% from Coastal facilities, reflecting the average wind generation performance over peak hours in those regions during the six-year study period. In winter, those percentages change to 19% and 36%, respectively. Commercial-scale solar generation is currently counted at nameplate capacity. After ERCOT has 200 MW of commercial-scale solar installed, that value also will be adjusted in the future based on historical performance during peak demand hours over a three-year period.

A new load forecasting methodology that ERCOT implemented in February 2014 has performed well. With that in mind, ERCOT continues to use the same load forecast in this report and will continue to review outcomes in the coming year to evaluate its accuracy and determine whether adjustments are needed prior to the December 2015 report.

The next CDR update is scheduled for May 2015.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.