HOUSTON — Beth Garza’s annual visit to the Gulf Coast Power Association’s Houston chapter Thursday once again drew a roomful of electric industry insiders and observers hoping to glean insights into the state of the ERCOT market.
But first, Garza, director of ERCOT’s Independent Market Monitor, had to remind her luncheon audience what her role is. Asked about her expectations of the market’s performance during the summer, Garza responded, “The cool thing about my job is that it’s the Market Monitor, not the market predictor.”
Garza did allow that forward prices do show a “moderation of expectations” for the summer. She shared a slide that showed ERCOT’s North Hub futures for August at around $120/MWh and the July futures at around $70/MWh.
A year ago, August futures briefly eclipsed $250/MWh in May, when the reserve margin was 11%. It is now down to 8.6%.
“It’s been a wet spring, and wet springs tend to portend not-that-hot summers. I think we will see similar outcomes in the summer of 2019,” she said, echoing ERCOT’s weather forecast. (See “Staff Prep Directors for Summer Expectations” and “IMM Market Report: Load Continues to Climb,” ERCOT Board of Directors Briefs: June 11, 2019.)
ERCOT says it expects to use emergency measures this summer to meet a record forecasted peak demand of 74.9 GW, more than last summer’s all-time system peak of 73.5 GW. The grid operator has an available capacity of 78.9 GW.
The Monitor’s State of the Market report notes ERCOT’s load grew at a 5.3% clip last year. ERCOT expects the growth to continue at a 2.5 to 3% rate through 2022, when peak demand is projected to hit 84.1 GW.
“This continued growth puts us on a path of being short,” Garza said. “If you look at installed capacity … the resources we have today will be insufficient to serve projected load in 2021.”
One luncheon guest asked Garza whether batteries and other forms of energy storage could play a major role in the market.
“The difficulties and challenges around batteries are numerous and hard,” she said. “ERCOT is not alone in the RTO world in wrestling with those questions and trying to figure out what the right answers are. I don’t have easy answers, because there are no easy answers.”
74-MW Wind Farm to Retire in November
ERCOT on Thursday approved West Texas Wind Energy Partners’ request to shut down a 74-MW wind farm in Southwest Texas. The grid operator said its reliability analysis indicated the facility was no longer needed to support system reliability.
The Southwest Mesa Wind Energy Center will be decommissioned and retired permanently in November.
Southwest Mesa began commercial operation in 1999. With nearly 22.1 GW of installed wind in ERCOT’s footprint as of April, the facility’s retirement will represent a 0.33% cut in wind capacity.
— Tom Kleckner
