Texas Electricity Prices Explode With Power Grid On Verge Of Another Meltdown

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by Tyler Durden
Monday, Jun 14, 2021 - 06:40 PM

Goldilocks will not be pleased. Texas power prices infamously exploded higher during the frigid temperatures of the February winter storm that crippled so much of the state; and this time, amid blisteringly hot temperatures, Texas power prices are exploding higher once again as The Electric Reliability Council of Texas (ERCOT) asks Texans to reduce electric use as much as possible today through Friday, June 18.

ERCOT issued the following Conservation Alert:

A significant number of forced generation outages combined with potential record electric use for the month of June has resulted in tight grid conditions.

Generator owners have reported approximately 11,000 MW of generation is on forced outage for repairs; of that, approximately 8,000 MW is thermal and the rest is intermittent resources. According to the summer Seasonal Assessment of Resource Adequacy, a typical range of thermal generation outages on hot summer days is around 3,600 MW. One MW typically powers around 200 homes on a summer day.

"We will be conducting a thorough analysis with generation owners to determine why so many units are out of service," said ERCOT Vice President of Grid Planning and Operations Woody Rickerson. "This is unusual for this early in the summer season."

According to generation owners, the number of outages should decrease throughout the week.

Wind output for today is expected to be 3,500 to 6,000 MW between 3 and 9 p.m. This is roughly 1,500 MW lower than what is typically available for peak conditions. Wind output is expected to increase as the week goes on.

Today’s peak load forecast may exceed 73,000 MW. The peak demand record for June is 69,123 MW set on June 27, 2018 between 4 and 5 p.m.

Please take these simple actions to help reduce electric use:

  • Set your thermostat to 78 degrees or higher – every degree of cooling increases your energy use by six to eight percent.

  • Turn off lights and pool pumps and avoid using large appliances like ovens, washing machines and dryers.

  • If you don’t need something – we are asking you to turn it off and unplug it if possible.

This sent power prices spiking with reporting that Real-time locational marginal prices across major ERCOT zones topped $1,000/MWh around 1:30 pm CT, and reached almost $2,000/MWh around 2:15 pm CT, the current systemwide cap.

ERCOT spokeswoman Leslie Sopko said during a media call that as of 2:30 pm CT, the total capacity offline in forced outage was 12,178 MW offline, of which 9,066 MW was for thermal resources, while the remainder was for renewable resources. The total offline is three to four times what would typically be on forced outage during summer peak hours.

During that call, Warren Lasher, ERCOT senior director of system planning, said, "it's unclear why we are seeing so many unplanned outages right now." Less than 500 MW of the generation on outage is out for long-term maintenance issues, he said.

Some of the lost capacity appears related to derating - meaning generation is producing less than its nameplate capacity due to weather, mechanical, or fuel issues - but Lasher said he had heard of no problems with fuel delivery associated with this event.

Once again "renewables" are just not up to it as wind generation is reportedly playing a notable role in helping to push prices up, with average wind generation for June 15 predicted to tumble 28.8% to 3.5 GWh from about 4.9 GWh forecast for April 14. Despite the lower wind forecast, "wind output is expected to increase as the week goes on," according to ERCOT.

We suspect prices will be going higher given the weather forecast for the rest of the week.