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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Texas has added more than 20,000 megawatts (MW) of wind generation over the last decade, but the estimated 4,915 MW of new wind projects scheduled to begin operating this year has energy traders and analysts worried about grid congestion and chaotic pricing.
Industrial Info is tracking 21 wind generation projects in Texas that are scheduled to be completed this year, with an estimated value of $7.68 billion. Most of these projects are located in the Texas Panhandle or near it. Industrial Info also is tracking 31 transmission projects in Texas that are scheduled to become operational by the end of 2019. The value of those transmission projects is about $327 million.
There is concern that the wind turbines scheduled to become operational this year will swamp the available transmission capacity, leading to grid congestion and adding to the challenges of keeping the lights on in the Lone Star State this summer. Earlier this month, the Electric Reliability Council of Texas (ERCOT) (Austin, Texas) warned Texans that they may face electric emergencies, and rolling brownouts or blackouts this summer. For more on that, see May 14, 2019, article - Texans May Experience Electric Emergencies This Summer.
"There's been a lot of chatter among energy traders who work on financial transmission rights (FTRs) that all the windfarms scheduled to become operational this year in ERCOT will overwhelm the grid and cause chaos in the wider energy market," said Paul Copello, president of IIR Energy (Sugar Land, Texas). "Wind generation that carries congestion charges from the grid could throw a serious monkey wrench in people's trading books and auction positions."
"The ERCOT system would likely need new transmission lines to accommodate the amount of renewable generation currently in the interconnection queue," the agency said in a statement. "The Competitive Renewable Energy Zone (CREZ) lines were built to accommodate approximately 18,500 MW of wind power out of West Texas, and those lines are near capacity. We have a proactive planning department that continually assesses transmission needs as the ERCOT system changes and grows. As new generation is added to the ERCOT system, our planning team works to identify any transmission upgrades that may be needed to alleviate congestion."
ERCOT acknowledged the potential for this problem in a report issued last December. "The growth in wind generation capacity in some areas (of the state) has reached and exceeded the design capability of the CREZ transmission system," the agency wrote in its Report on Existing and Potential Electric System Constraints and Needs. "For example, dynamic stability and system strength considerations limit the reliable flow of power from the Panhandle to the rest of the ERCOT system, due to the inverter-based design of the wind generation in the area and the remote nature of the Panhandle system."
"As a result, an export limit from the Panhandle region is necessary to maintain reliable operation. This export limit is applied to the sum of the power flows across the six circuits that connect the Panhandle region to the rest of the ERCOT system. The Panhandle Export Limit had the second-highest amount of congestion rent on the ERCOT system in both 2017 and 2018. This congestion was exacerbated by several extended maintenance outages taken on Panhandle area transmission."
The report continued: "Two new transmission projects in the Panhandle went into service in 2018 to help relieve congestion in the area. Additionally, the 2021 planned integration of the Lubbock Power and Light system into ERCOT will include a new 345-kV path out of the Panhandle that will help alleviate congestion. However, as more generation is added in and near the Panhandle, the congestion is expected to continue. Furthermore, with the addition of a substantial amount of wind generation located just outside of the currently defined Panhandle area, ERCOT may have to change the way it manages the stability constraint in the area to maintain reliable operation."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Industrial Info is tracking 21 wind generation projects in Texas that are scheduled to be completed this year, with an estimated value of $7.68 billion. Most of these projects are located in the Texas Panhandle or near it. Industrial Info also is tracking 31 transmission projects in Texas that are scheduled to become operational by the end of 2019. The value of those transmission projects is about $327 million.
There is concern that the wind turbines scheduled to become operational this year will swamp the available transmission capacity, leading to grid congestion and adding to the challenges of keeping the lights on in the Lone Star State this summer. Earlier this month, the Electric Reliability Council of Texas (ERCOT) (Austin, Texas) warned Texans that they may face electric emergencies, and rolling brownouts or blackouts this summer. For more on that, see May 14, 2019, article - Texans May Experience Electric Emergencies This Summer.
"There's been a lot of chatter among energy traders who work on financial transmission rights (FTRs) that all the windfarms scheduled to become operational this year in ERCOT will overwhelm the grid and cause chaos in the wider energy market," said Paul Copello, president of IIR Energy (Sugar Land, Texas). "Wind generation that carries congestion charges from the grid could throw a serious monkey wrench in people's trading books and auction positions."
"The ERCOT system would likely need new transmission lines to accommodate the amount of renewable generation currently in the interconnection queue," the agency said in a statement. "The Competitive Renewable Energy Zone (CREZ) lines were built to accommodate approximately 18,500 MW of wind power out of West Texas, and those lines are near capacity. We have a proactive planning department that continually assesses transmission needs as the ERCOT system changes and grows. As new generation is added to the ERCOT system, our planning team works to identify any transmission upgrades that may be needed to alleviate congestion."
ERCOT acknowledged the potential for this problem in a report issued last December. "The growth in wind generation capacity in some areas (of the state) has reached and exceeded the design capability of the CREZ transmission system," the agency wrote in its Report on Existing and Potential Electric System Constraints and Needs. "For example, dynamic stability and system strength considerations limit the reliable flow of power from the Panhandle to the rest of the ERCOT system, due to the inverter-based design of the wind generation in the area and the remote nature of the Panhandle system."
"As a result, an export limit from the Panhandle region is necessary to maintain reliable operation. This export limit is applied to the sum of the power flows across the six circuits that connect the Panhandle region to the rest of the ERCOT system. The Panhandle Export Limit had the second-highest amount of congestion rent on the ERCOT system in both 2017 and 2018. This congestion was exacerbated by several extended maintenance outages taken on Panhandle area transmission."
The report continued: "Two new transmission projects in the Panhandle went into service in 2018 to help relieve congestion in the area. Additionally, the 2021 planned integration of the Lubbock Power and Light system into ERCOT will include a new 345-kV path out of the Panhandle that will help alleviate congestion. However, as more generation is added in and near the Panhandle, the congestion is expected to continue. Furthermore, with the addition of a substantial amount of wind generation located just outside of the currently defined Panhandle area, ERCOT may have to change the way it manages the stability constraint in the area to maintain reliable operation."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
