ERCOT studies confirm need to keep Greens Bayou 5 around for now

The Electric Reliability Council of Texas (ERCOT) will not need a cogeneration facility in the Houston area for transmission system reliability under new rules approved by its Board of Directors on Oct. 11, but the NRG Energy (NYSE:NRG) Greens Bayou Unit 5 is still needed for the short-term.

ERCOT said Oct. 17 that the regional grid still needs another Houston-area generation resource to support transmission reliability until a new plant, currently under construction in Wharton County, begins operating in summer 2017.

ERCOT has announced results of its “reliability must-run” (RMR) studies following recent ERCOT Board actions that changed the criteria staff uses to determine whether specific generation resources are needed for transmission reliability purposes.

Under the new rules, which went into effect Oct. 12, ERCOT determined that removing Calpine‘s (NYSE:CPN) Clear Lake cogeneration facility from the system will not cause transmission reliability concerns.

However, ERCOT will need to continue its agreement with NRG Texas Power to keep Greens Bayou Unit 5 available through July 2017, when a new 1,100 MW natural gas-fired combined cycle plant at the Colorado Bend Generating Station is scheduled to begin operating in the area.

“Reliability is our most important responsibility, and ERCOT needs to have the right resources in the right places to maintain a stable system,” said Chief Operating Officer Cheryl Mele. “We appreciate the work by ERCOT stakeholders to develop rules that enable our staff to consider additional factors when determining whether specific resources are needed to maintain reliability.”

When generation owners notify ERCOT of plans to stop operating a power plant, staff determines whether removing that resource would impact transmission system reliability. If the facility is needed to help prevent localized concerns, such as voltage instability and thermal overloads, an RMR agreement establishes the terms for continued operation and the costs ERCOT will pay.

In June 2016, ERCOT entered an RMR agreement to keep Greens Bayou Unit 5 available through June 2018. This was the first such agreement since 2011.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.