By Tom Kleckner

A Brattle Group analysis of the potential effect of regulatory and market factors on ERCOT’s generation says the ISO will rely primarily on natural gas, wind and utility-scale solar power over the next 20 years, continuing recent trends.

ERCOT’s current monthly demand and energy report shows natural gas is providing 46.7% of its generation this year, followed by coal (19.6%) and wind (18.3%). Nuclear represents 14.6% of the ISO’s generation, but the Brattle study sees that dropping to 9% by 2035. Brattle said low natural gas prices could result in the retirement of 12 GW of coal-fired generation, 60% of ERCOT’s current fleet, by 2022.

Solar accounts for just 0.2% of ERCOT’s generation, but the ISO expects that to grow from 288 MW to more than 1,000 MW by the time summer begins, with another 6,700 MW of solar capacity under study in the transmission queue.

The Brattle Group study assumes that natural gas prices will remain below $4/MMBtu and that solar photovoltaic prices will continue to decline. That will result in reduced carbon emissions and inflation-adjusted wholesale prices equal to those of 2014, the report said, and make proposed federal regulations “largely irrelevant.”

The analysis was commissioned by the Texas Clean Energy Coalition, which has hired Brattle to conduct three previous studies.

Brattle built its study on four reference cases: low/high natural gas prices and low/high cost of utility-scale solar PV, based on natural gas futures and ERCOT and National Renewable Energy Laboratory forecasts. Analysts also explored three policy scenarios for each case: improved state energy efficiency programs, and mass- and rate-based emission limits under the Clean Power Plan.

This year, ERCOT said its monthly energy use is down 1.1% from 2015, though April’s peak demand was up 12.6% — the first time it has surpassed monthly demand from last year (50,920 MW versus 45,227 MW for April 2015).

Transmission Concerns

ERCOT spokesperson Robbie Searcy said while the Brattle study used “many of the same basic assumptions” as the ISO’s studies, its own analysis indicates “recent environmental regulations may accelerate the pace of unit retirements, potentially faster than the system can adapt to support reliability.”

Searcy said the ERCOT study focused on localized transmission-system reliability, which would be more susceptible to generation retirements. “It could take several years for the transmission system to catch up with these needs, in turn creating potential reliability challenges in the interim,” she said.