ERCOT report outlines issues, data from 2014 operating year

The Electric Reliability Council of Texas on Jan. 15 filed its annual Operations Report and Plan for 2014 with the Public Utility Commission of Texas.

Much of the filing is actually a series of reports that ERCOT did over the course of 2014 outlining issues like transmission and generation development, and statistical data from the year about power markets. ERCOT is the organization responsible for ensuring the reliability and adequacy of the regional bulk electric power grid for the majority of Texas. The ERCOT power grid encompasses approximately 90% of the state’s electric load and about 75% of the Texas land area. As the independent system operator for its region, ERCOT manages the scheduling of power on an electric grid consisting of more than 550 generation units and more than 43,000 miles of high-voltage transmission lines.

One of the reports included in the filing is dated Dec. 29 and touches in part on the controversial Houston Import Project, which is a series of planned grid upgrades needed to import more power into the Houston area. NRG Energy (NYSE: NRG) and Calpine (NYSE: CPN), which have generating capacity within the Houston region, are contesting that plan at the commission, saying ERCOT didn’t properly value generating capacity additions that could be built in the Houston area.

Said the report, called the “Report on Existing and Potential Electric System Constraints and Needs”: “Since ERCOT completed the analysis of the need for the Houston Import Project, three plants in the Houston area have committed to add generation in the area before 2018. These plants were not included in the ERCOT analysis and will add 676 MW of generation to the area. However, there was 961 MW of generation in the area that was counted as being available that is now mothballed. The net effect of these generation changes is an increased need for the project. There is nearly 1,200 MW of additional generation within the area that will be more than fifty years old by 2018. Most of the similar units in ERCOT have already been retired. The retirement of these units was not considered in ERCOT’s assessment of project need due to the current planning rules. If these units retire and more generation is not constructed, it could increase the need to import power into the area.”

At another point in the Dec. 29 report, looking at power issues in another region, the Lower Rio Grande Valley (LRGV), ERCOT noted: “In July 2014, the owners of the Frontera generation plant, a 524 MW natural gas facility located on the west side of the LRGV, announced that they were planning to switch part of the facility (170 MW) out of the ERCOT market in 2015, and the entire facility would no longer be available to ERCOT in 2016. Going forward the plant will be generating electricity for the Mexico power system.

“ERCOT evaluated the impact of the absence of the Frontera generation plant on the reliability of the LRGV system. ERCOT concluded that a reliability risk will be exacerbated when one of the existing 345 kV import lines or other generation in the area is out of service when there is high demand, such as during extremely hot or cold days. ERCOT will coordinate with the plant owner to potentially switch back to ERCOT during these times in order to minimize this risk. ERCOT also concluded that the two planned 345 kV projects will largely relieve the reliability issues in 2016, but additional system improvements will be required after 2016.

“As of October 2014, the LRGV has two new sizeable natural gas plants in the final stage of the interconnection study process and one new natural gas plant that had a signed generation interconnection agreement (SGIA), but the developers had not yet provided financial commitment. Together these new plants could add over 1,800 MW of generation in the LRGV and defer or eliminate the need for future transmission system improvements. ERCOT is currently studying the transmission needs for the area considering scenarios where the new generation gets constructed and a scenario where it does not. This analysis is expected to be completed in 2015.”

The report pointed out that the JT Deely coal plant, located in Bexar County, is planned to be retired at the end of 2018. The plant, with an output of about 850 MW, currently represents nearly 20% of the generation capacity in Bexar County. The combination of demand growth and the retirement of local generation will cause reliability criteria violations on the transmission system in the Northeast Bexar County area extending into Comal and Hays counties unless improvements are constructed by 2019, it said. In June 2014, CPS Energy and LCRA Transmission Services Corp. submitted a project proposal to the RPG to address these violations. ERCOT is in the process of conducting an independent review of the proposal. ERCOT has identified reliability criteria violations on 98 miles of 345 kV lines, 42 miles of 138 kV lines and multiple transformers. ERCOT is evaluating 13 project alternatives to resolve the violations and is expected to make a project recommendation in early 2015.

The report noted: “The Panhandle region is currently experiencing significantly more interest from wind generation developers than what was initially planned for the area. As of October 2014, there was nearly 11.5 GW of wind generation in service on the ERCOT System. According to the Generation Interconnection Status report (http://www.ercot.com/gridinfo/resource/index.html) reviewed in October 2014, there was over 7 GW of wind generation capacity with a SGIA in the Texas Panhandle and more than 12 GW wind generation capacity proposed to connect to the Texas Panhandle that was progressing through the interconnection process. This information indicates that the wind generation projects located in the Texas Panhandle are likely to exceed the 2,400 MW capacity for which reactive support was initially installed.”

The Dec. 29 report said about several proposed liquefied natural gas (LNG) export facilities along the Texas Gulf Coast: “The local load impact of an LNG liquefaction facility depends strongly on the technology used to drive the compressor used to make LNG. If each facility is constructed to its full announced capacity, ERCOT could be looking at load additions between 2,000 and 3,000 MW within a few years. The LNG liquefaction process includes the use of large natural gas compressors. Most LNG liquefaction plants drive those compressors with natural gas engines. The Freeport LNG facility plans to power its compressors with very large electric motors, which increases its electrical load compared to facilities with natural gas-drive compressors. The load impact of the other proposed projects will depend in part on the technology the developer selects to drive the compression. Also, although the Freeport LNG liquefaction facility is not planned to have self-supplied generation, other LNG facilities may be designed with this capability, which would reduce the net impact to the ERCOT grid.”

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.