COVID-19 Cuts Texas Summer Electric Demand by 1,500 Megawatts

Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The COVID-19 pandemic will knock about 1,500 megawatts (MW) off peak electric demand in Texas this summer, which is expected to boost summer reserve margins to about 12.6%, two percentage points higher than a preliminary estimate made earlier this year, Pete Warnken, manager of resource adequacy for the Electric Reliability Council of Texas (ERCOT) (Austin, Texas), said on a virtual press conference May 13.

A 12.6% reserve margin is a lot closer to industry norms, which tend to cluster around 15%. ERCOT is the grid operator for the majority of Texas.

"There are a lot of uncertainties," Warnken cautioned. ERCOT's projection assumes normal temperatures and an average number of unplanned generator outages, he said. But if three critical factors aligned--an extreme heat wave, a less-than-forecast amount of generation from windfarms or a higher-than-expected number of unplanned outages at generators--the grid operator would be forced to a call an energy emergency alert.

Despite the assumed decline in electric demand from the slumping Oil & Gas sector, the group said the state likely will experience record electric use this summer driven by summer heat. Weather, population and economic activity tend to drive electric demand, and the COVID-19 pandemic has offset much, but not all, other factors pushing electric demand up, Warnken said May 13.

In its final Seasonal Assessment of Resource Adequacy (SARA) for the summer, ERCOT lowered its peak electric demand forecast to 75,200 MW, 1,496 MW less than what it predicted in March. For more on that initial projection, see March 31, 2020, article -- Texas Faces Energy Emergencies This Summer, but COVID-19 and Oil Industry Demand are Critical Unknowns.

However, the new forecast is still higher than ERCOT's all-time peak demand record of 74,820 MW set on August 12, 2019.

Click on the image at right to see ERCOT's expected peak electric demand and available resources for 2021-2025.

Since March, when the preliminary forecast was released, ERCOT said seven planned wind, solar and storage projects totaling 979 MW and contributing 276 MW to summer peak began commercial operations. Some of this new generation came online sooner than expected, Warnken said.

But he added that about 411 MW of planned resource capacity that was expected to be available during peak demand hours this summer has been delayed beyond the summer of 2020. Most of this delayed capacity was wind power. One small battery energy storage system has been delayed due to COVID-19.

Warnken said one coal-fired power plant in the state, Gibbons Creek, is expected to be restarted in time for next summer's peak electric season. Gibbons Creek is a 420-MW generator owned by the Texas Municipal Power Agency.

Warnken said he could not estimate how the difficult times enveloping the state's Oil & Gas industry would affect summer demand for electricity. "It's too early to say how that would translate into our forecast," he said on the virtual press conference.

The ERCOT official said power project cancellations and delays "are a little higher than normal but nothing out of the ordinary. It's not a big topic, and it varies from month to month."

He did emphasize that summertime air conditioner use "is the big story for the summer. If there is extreme heat and people come home and crank on their air conditioners, it will drive up electric demand," and possibly bring the state closer to an energy emergency alert.

Generation is not the only factor deciding whether the lights stay on in the Lone Star State this summer. He said there was transmission congestion in some parts of the state, including the Permian Basin and the Rio Grande Valley--and that transmission projects were being added to relieve congestion.

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