Released July 14, 2022 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Here in Texas, if the ice and snow doesn't get us, the heat just may. Temperatures in the Lone Star State topped 100 degrees Fahrenheit for the 12th straight day in some areas on Wednesday. This, of course, brought about pleas from the Electric Reliability Council of Texas (ERCOT), the state's main grid operator, to once again curtail power usage during the peak hours of demand. The bad news is it doesn't look like Texas is out of the woods yet.
ERCOT issued a power conservation appeal for Wednesday between 2 p.m. and 9 p.m., asking Texans and businesses to voluntarily conserve energy during this period. Bitcoin mining operations curtailed 1,000 megawatts (MW) of power on Wednesday by voluntarily ceasing operations for the day. Meanwhile, at its height, electricity was trading at well over $5,000 per MW hour.
During the Winter Storm Uri, some tried to place the blame on renewable energy sources such as wind and solar as not performing well. To some degree this was true, but as it turned out, traditional energy sources such as coal, nuclear and natural gas-fired power plants underperformed as well. Indeed this was rare significant event where all 254 counties in Texas were near or below freezing with many in the zero to sub-zero range.
After all, the Texas power grid is designed for the heat, right? The past two weeks has certainly put this theory to the test. Texas is in a situation where the difference between demand and committed capacity is razor thin. As of late Wednesday afternoon, demand was at 78,271 MW and committed capacity was 79,346 MW. If one or more major units were to trip offline, Texas will be seeing major blackouts.
This time around, wind energy hasn't even showed up to the dance. The maximum capacity from wind resources was 8,284 MW at 1 a.m. on Wednesday, while most Texans were still tucked away in their beds. Through the day, the generation sank to 705 MW, but had climbed back to 3,960 MW by 4 p.m. Generation from wind resources have been minimal throughout the heatwave due to the dome of high pressure sitting over Texas, curtailing the wind. On the bright side, no pun intended, solar has made a decent showing, topping out at 9,319 MW on Wednesday. However, cloud cover in many parts of the state has prevented solar from contributing as much as it potentially could.
Installed grid-scale solar power capacity is well over 10 gigawatts (GW) in ERCOT, and Texas is one of the top solar producing states. In ERCOT, wind in terms of potential capacity represents more than 33 GW. Reflecting back to 1 p.m. Wednesday, wind was only producing 2% of the full potential for the ERCOT region.
Will it get worse before it gets better? Certainly, renewable energy will not be recognized as a potential base-load energy source until battery storage is installed to support wind and solar. Texas is just touching the tip of the iceberg in terms of what is needed for battery storage in the state. Until adequate battery storage arrives, Texas will depend on aging but reliable fossil and nuclear resources to bail out the state in times of trouble.
Getting to the heart of the matter, in ERCOT, more than 13,000 MW of power generation has been retired since the beginning of 2010. Of this total, more than 6,500 MW of coal-fired power has been retired, while 6,400 MW of oil and natural gas-fired generation has closed.
It remains to been seen how the Texas summer and the power grid plays out, but at some point one has to wonder if it makes sense to build more natural gas-fired generators in a state where the fuel is prevalent. After Winter Storm Uri, there were many who proposed new natural gas-fired generation, but that talk cooled and at this point Industrial Info isn't tracking project activity of this sort with a high probability of moving forward. However, the march toward building new wind and solar resources moves forward at full stride.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
ERCOT issued a power conservation appeal for Wednesday between 2 p.m. and 9 p.m., asking Texans and businesses to voluntarily conserve energy during this period. Bitcoin mining operations curtailed 1,000 megawatts (MW) of power on Wednesday by voluntarily ceasing operations for the day. Meanwhile, at its height, electricity was trading at well over $5,000 per MW hour.
During the Winter Storm Uri, some tried to place the blame on renewable energy sources such as wind and solar as not performing well. To some degree this was true, but as it turned out, traditional energy sources such as coal, nuclear and natural gas-fired power plants underperformed as well. Indeed this was rare significant event where all 254 counties in Texas were near or below freezing with many in the zero to sub-zero range.
After all, the Texas power grid is designed for the heat, right? The past two weeks has certainly put this theory to the test. Texas is in a situation where the difference between demand and committed capacity is razor thin. As of late Wednesday afternoon, demand was at 78,271 MW and committed capacity was 79,346 MW. If one or more major units were to trip offline, Texas will be seeing major blackouts.
This time around, wind energy hasn't even showed up to the dance. The maximum capacity from wind resources was 8,284 MW at 1 a.m. on Wednesday, while most Texans were still tucked away in their beds. Through the day, the generation sank to 705 MW, but had climbed back to 3,960 MW by 4 p.m. Generation from wind resources have been minimal throughout the heatwave due to the dome of high pressure sitting over Texas, curtailing the wind. On the bright side, no pun intended, solar has made a decent showing, topping out at 9,319 MW on Wednesday. However, cloud cover in many parts of the state has prevented solar from contributing as much as it potentially could.
Installed grid-scale solar power capacity is well over 10 gigawatts (GW) in ERCOT, and Texas is one of the top solar producing states. In ERCOT, wind in terms of potential capacity represents more than 33 GW. Reflecting back to 1 p.m. Wednesday, wind was only producing 2% of the full potential for the ERCOT region.
Will it get worse before it gets better? Certainly, renewable energy will not be recognized as a potential base-load energy source until battery storage is installed to support wind and solar. Texas is just touching the tip of the iceberg in terms of what is needed for battery storage in the state. Until adequate battery storage arrives, Texas will depend on aging but reliable fossil and nuclear resources to bail out the state in times of trouble.
Getting to the heart of the matter, in ERCOT, more than 13,000 MW of power generation has been retired since the beginning of 2010. Of this total, more than 6,500 MW of coal-fired power has been retired, while 6,400 MW of oil and natural gas-fired generation has closed.
It remains to been seen how the Texas summer and the power grid plays out, but at some point one has to wonder if it makes sense to build more natural gas-fired generators in a state where the fuel is prevalent. After Winter Storm Uri, there were many who proposed new natural gas-fired generation, but that talk cooled and at this point Industrial Info isn't tracking project activity of this sort with a high probability of moving forward. However, the march toward building new wind and solar resources moves forward at full stride.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
