Texas Power Reserve Outlook is Positive, explains latest report

May 23rd, 2012 | by Terry Preuninger

The following article from Restructuring Today
provides a good perspective on the power capacity and its future in Texas.

ERCOT reserve outlook is positive, explains latest report
Restructuring Today

ERCOT’s reserve margin picture for the next few years improved since December, though the ISO is still predicting total supplies will slip below its 13.75% reserve target in 2014.

“To ensure future electric reliability in the ERCOT region, we need to take immediate steps to address this issue — on both the supply side and the demand side of the resource adequacy equation,” said ERCOT CEO Trip Doggett.

The latest capacity, demand and reserves report released yesterday showed that power supplies would stay above the reserve margin next year, though it will take the units that returned from mothball status this summer to stay online and the Sandy Creek unit to start on schedule. Sandy Creek, a 925-MW coal plant, was supposed to start producing power this summer but was delayed due to an equipment failure late last year.

Without any new units by 2014, ERCOT is projecting that the reserve margin will slip to 9.8% — still an improvement over December’s report (RT, Dec-22), when the reserve margin was expected to fall to 7.6% in 2014.

The ISO saw 1,240 MWs of mothballed capacity return to service since December and ERCOT believes that will stay running for the foreseeable future, its Director of System Planning Warren Lasher said on a conference call yesterday.

Luminant brought back 1,130 MWs of coal-fired generation that it said would have been mothballed had the EPA’s Cross State Air Pollution Rule — now under a judicial stay — gone into effect this year as planned.

The report predicted a negative reserve margin in 2022, by which time more new generation than is currently forecasted will have been built, said Lasher. ERCOT was set to slip into a negative reserve margin in 2020 in December’s report.

The forecast for 2016 includes 3,657 MWs of new gas-fired capacity, over 2,000 MWs of new wind power, 900 MWs of new coal-fired generation and 60 MWs of solar. However, with demand expected to rocket up to a peak of 73,957 MWs from 2013′s 65,649 MWs, that will still leave the reserve margin at just 6.5%.

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