16.12.2016, 20:04
Texas grid raises summer power demand forecast
OREANDA-NEWS. The Texas power grid operator raised its forecast for peak electric demand in coming summers, a change that may encourage additional development of gas-fired generation.
The Electric Reliability Council of Texas (ERCOT) this week issued its Capacity, Demand and Reserves report to give market participants a first look at supply expectations for the upcoming summer, when electric demand soars to meet air conditioning load.
Unlike many areas of the country, electric use in Texas continues to rise because of renewed oil and gas production and overall economic growth.
The latest forecast shows increased employment and customer growth in central Texas, ERCOT said.
"Thanks in large part to a healthy economic outlook, the ERCOT region expects to see customer demand grow at higher levels than previously projected," said Warren Lasher, ERCOT senior director of system planning.
ERCOT raised its summer 2017 peak load forecast to 72,934MW, up 2pc from the previous forecast. In 2021, the increase expands to 3.3pc.
Faster load growth will pare ERCOT's projected summer 2017's reserve margin to 16.9pc, from the agency's previous 18.2pc forecast issued in May. Impact of the higher peak was offset by two new gas-fired plants that are expected to be operating next summer.
The reserve margin in the five-year outlook climbs to 20.2pc in 2018 with the addition of more gas-fired and renewable generation then eases to 19pc by 2021. That's down from the 25pc margin previously forecast for 2018, but the margin stays well above the region's 13.75pc target reserve margin - the cushion of electricity needed to avoid power disruption - through 2024.
The grid agency is counting on 2,660MW of new gas-fired generation to be in operation next summer, including two 1,000MW gas plants being built by Exelon: the Colorado Bend II plant in Wharton county and the Wolf Hollow 2 plant in Hood county. Another 1,654MW of gas-fired generation may be online by 2018.
The grid has already seen evidence of accelerated demand growth. In August, electric use blew threw the agency's peak 2016 forecast of 70,588mw, hitting six hourly demand records and exceeding 71,000MW for the first time. The state grid also saw record monthly peak-hour demand in September and October.
For the first 11 months of 2016, overall Texas power use is running 0.6pc ahead of the 2015 record, after lagging 2015 by more than 5pc during a warmer-than-normal winter. Monthly power use has exceeded the year-earlier month in seven of the past eight months, putting ERCOT on track to set a new electric consumption record this year.
Gas is burned to produce about 45pc of the electricity used in ERCOT this year, down from 48pc in 2015.
In 2014, ERCOT revised is forecast methodology after criticism from state regulators that its demand growth forecasts were too high. That revision pared about 5pc from existing projections.
Exelon's 2014 decision to build two large power plants in Texas surprised many developers at the time because of low gas and wholesale power prices and a lack of movement to improve scarcity pricing. Construction began in mid-2015, leaving a tight time line to be online by next summer.
The Electric Reliability Council of Texas (ERCOT) this week issued its Capacity, Demand and Reserves report to give market participants a first look at supply expectations for the upcoming summer, when electric demand soars to meet air conditioning load.
Unlike many areas of the country, electric use in Texas continues to rise because of renewed oil and gas production and overall economic growth.
The latest forecast shows increased employment and customer growth in central Texas, ERCOT said.
"Thanks in large part to a healthy economic outlook, the ERCOT region expects to see customer demand grow at higher levels than previously projected," said Warren Lasher, ERCOT senior director of system planning.
ERCOT raised its summer 2017 peak load forecast to 72,934MW, up 2pc from the previous forecast. In 2021, the increase expands to 3.3pc.
Faster load growth will pare ERCOT's projected summer 2017's reserve margin to 16.9pc, from the agency's previous 18.2pc forecast issued in May. Impact of the higher peak was offset by two new gas-fired plants that are expected to be operating next summer.
The reserve margin in the five-year outlook climbs to 20.2pc in 2018 with the addition of more gas-fired and renewable generation then eases to 19pc by 2021. That's down from the 25pc margin previously forecast for 2018, but the margin stays well above the region's 13.75pc target reserve margin - the cushion of electricity needed to avoid power disruption - through 2024.
The grid agency is counting on 2,660MW of new gas-fired generation to be in operation next summer, including two 1,000MW gas plants being built by Exelon: the Colorado Bend II plant in Wharton county and the Wolf Hollow 2 plant in Hood county. Another 1,654MW of gas-fired generation may be online by 2018.
The grid has already seen evidence of accelerated demand growth. In August, electric use blew threw the agency's peak 2016 forecast of 70,588mw, hitting six hourly demand records and exceeding 71,000MW for the first time. The state grid also saw record monthly peak-hour demand in September and October.
For the first 11 months of 2016, overall Texas power use is running 0.6pc ahead of the 2015 record, after lagging 2015 by more than 5pc during a warmer-than-normal winter. Monthly power use has exceeded the year-earlier month in seven of the past eight months, putting ERCOT on track to set a new electric consumption record this year.
Gas is burned to produce about 45pc of the electricity used in ERCOT this year, down from 48pc in 2015.
In 2014, ERCOT revised is forecast methodology after criticism from state regulators that its demand growth forecasts were too high. That revision pared about 5pc from existing projections.
Exelon's 2014 decision to build two large power plants in Texas surprised many developers at the time because of low gas and wholesale power prices and a lack of movement to improve scarcity pricing. Construction began in mid-2015, leaving a tight time line to be online by next summer.
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