Everything’s Bigger in Texas

It’s been hot in ERCOT this year. The period June 1, 2016 through August 15, 2016 saw average max temperatures of 95 degrees. According to NOAA, areas in southeast Texas, which experienced intense flooding during the month of June, have seen conditions in their climate zones go from unusually wet to varying levels of drought in a matter of weeks.

Average temps aren’t all that different from the same time last year and increases in overall load have been fairly modest. For the aforementioned period, average load has increased from 48,314 MW in 2015 to 49,719 MW in 2016, or 2.8%. 2016’s increase vs. the previous five-year average (2011-2015) has been a more notable 6.1%. ERCOT reached a milestone on August 8th when load breached the 70,000 MW ceiling to peak at 70,169 MW hour-ending 17:00 CDT. The 70,000 MW mark was surpassed on three additional days this year, reaching a maximum of 71,198 MW on August 11th. Interestingly, maximum load for 2015 – 69,875 MW – was achieved almost exactly one year earlier on August 10th of that year.
ERCOT Total Load - Summer 2016
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ERCOT Total Load - Summer 2015
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Consistent days of high heat and higher than average load have stressed the bulk power system, natural gas in particular. Natural gas storage facilities in the South Central region have seen withdrawals exceeding injections during a season where the opposite case is traditionally the norm.
EIA Weekly Storage - Injection Season 2016
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ERCOT constitutes the majority of generation in the South Central region and is likely the main contributor to these persistent net withdrawals. Other factors leading to high withdrawal rates include declining gas production in the nearby Permian, South and East Texas basins and high power burn from natural gas-fired power plants. Even though renewables have seen significant increases within the ERCOT generating mix in recent years (1.2% in 2005 to 10% in 2015), over 50% of ERCOT generation is currently provided via natural gas.
With the current trend of generators substituting gas for coal as a primary source of generation, further future stress to gas suppliers in the South Central region should not be discounted. Not all projects will come to fruition, but the sheer amount of proposed gas-burning infrastructure that could hit the grid over the next few years is substantial.
ERCOT NG Net Capacity - Proposed or Under Construction
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Fortunately, prolific renewable development in the ISO could help to alleviate pressure on natural gas generators (and their suppliers) to meet demand going forward.
ERCOT Renewable Net Capacity - Proposed or Under Construction
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Andrew Colley – Energy Analyst – Fuels
Sean Hedges – GIS Analyst