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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The Texas grid operator on November 17 cancelled a request for proposal (RFP) for up to 3,000 megawatts (MW) of generating capacity for the upcoming winter after receiving only 11.1 MW of potential capacity bids. The RFP, issued October 2, was designed to create a bank of additional generation capacity to meet electric demand in case of extreme winter temperatures, such as was the case in Winter Storm Uri on February 2021. The RFP had asked generating units to be ready to generate power December 1.
"The request for additional capacity was an extra layer of precaution to mitigate higher risk during extreme weather this winter," Pablo Vegas, president and chief executive of the Electric Reliability Council of Texas (ERCOT) (Austin, Texas), said in a statement. "ERCOT is not projecting emergency conditions this winter and expects to have adequate resources to meet demand."
The group's statement added that it "has implemented many reforms and grid improvements since 2021, including weatherization inspections of electric generation units and transmission facilities, additional ancillary services, and firm fuel supply service."
The now-cancelled RFP was said to include financial incentives, but ERCOT did not disclose what they were.
In cancelling the RFP, the grid operator said it sought the added generation capacity because it projected there was a 21% probability of having to implement electric emergencies in January if the state was hit with a winter storm like last year's Winter Storm Elliott. Under those conditions, the agency said there was a 17% chance of rolling blackouts. "To reduce this elevated risk, ERCOT sought to procure up to 3,000 MW of additional capacity that could be called upon if needed as an added layer of protection during peak times."
Separately, the North American Electric Reliability Corporation (NERC) (Atlanta, Georgia), a regulatory body, also said last week Texas is at risk for outages this winter during a storm or lengthy cold snap.
In its communications, ERCOT officials did not directly reference the more severe Winter Storm Uri, which took place in February 2021.That storm froze gas lines, which tripped power plants and shut down water utilities for days. Hundreds died and property damage estimated were in the billions of dollars.
Somewhat opaquely, ERCOT said it was "entering the third season of winter weatherization inspections with enhanced requirements for generation and transmission facilities, compared to last winter season."
ERCOT said it issued the RFP because Texas has experienced "significant peak Load growth since last winter, recent and proposed retirements of dispatchable generation resources and recent extreme winter weather events."
Now, residents and businesses will have to hope extreme cold doesn't hit the Lone Star State this winter.
During severe cold and without the requested 3,000 MW of emergency reserves it sought, ERCOT said the state will face a 20% probability that electric emergencies will be called in December and a 17% chance that electric emergencies will be called in January.
One of the reasons operators declined to participate in the RFP was that ERCOT had asked operators of coal- and gas-fired plants that have been mothballed for years to make those plants ready to operate on short notice.
One of the plants ERCOT sought to activate was the J.T. Deely Power Station, an 892-MW coal-fired plant that was retired at the end of 2018. CPS Energy (San Antonio, Texas), a city-owned utility, owns that plant. Another facility on ERCOT's wish list was the Decker Creek Power Station, a 611-MW, gas-fired plant owned by Austin Energy (Austin, Texas). But that plant closed in 2020.
CPS Energy also owned another coal-fired plant, the J.K. Spruce Power Station, a two-unit, 1,300-MW facility, but earlier this year the utility's board had decided to close Unit 1 and convert Unit 2 to gas. It resisted calls to make Spruce Unit 1 available during the winter. That unit is in the process of being decommissioned.
All three facilities had been retired or were planned to be closed as part of each city-owned utility's plan to decarbonize their generation mix.
"We made a commitment to our community that those (units) would be retired," CPS Energy said of the Deely plant's two coal-fired units. "We continue to move forward with the implementation of our (lower carbon) generation plan to power our community through 2030."
In fact, the 11.1 MW of capacity that was bid all came from the demand response programs for large energy users.
During the December-January period, ERCOT estimated peak electric demand would average about 67,245 MW, with January's peak projected to be about 5,000 MW higher than in December. To meet that demand, the grid operator estimates around 92,000 MW of capacity will be available, 16% of which is scheduled to come from wind and solar generation. More than 80% of the rest will come from thermal generation, which encompasses natural gas, coal and nuclear power.
To ensure the state does not become overly reliant on intermittent generation resources like wind and solar, Texas voters this month ratified a measure that had earlier been approved by the state legislature to set aside $10 billion to support the construction, maintenance, modernization and operation of dispatchable generation. Most experts assume the generators would burn gas, though that was not required. For more on that, see June 9, 2023, article - Texas Legislation Would Give $10 Billion Boost for New Dispatchable Generation.
ERCOT noted that 15 units totaling 1,283 MW of capacity are slated to be out of service during the upcoming winter.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
"The request for additional capacity was an extra layer of precaution to mitigate higher risk during extreme weather this winter," Pablo Vegas, president and chief executive of the Electric Reliability Council of Texas (ERCOT) (Austin, Texas), said in a statement. "ERCOT is not projecting emergency conditions this winter and expects to have adequate resources to meet demand."
The group's statement added that it "has implemented many reforms and grid improvements since 2021, including weatherization inspections of electric generation units and transmission facilities, additional ancillary services, and firm fuel supply service."
The now-cancelled RFP was said to include financial incentives, but ERCOT did not disclose what they were.
In cancelling the RFP, the grid operator said it sought the added generation capacity because it projected there was a 21% probability of having to implement electric emergencies in January if the state was hit with a winter storm like last year's Winter Storm Elliott. Under those conditions, the agency said there was a 17% chance of rolling blackouts. "To reduce this elevated risk, ERCOT sought to procure up to 3,000 MW of additional capacity that could be called upon if needed as an added layer of protection during peak times."
Separately, the North American Electric Reliability Corporation (NERC) (Atlanta, Georgia), a regulatory body, also said last week Texas is at risk for outages this winter during a storm or lengthy cold snap.
In its communications, ERCOT officials did not directly reference the more severe Winter Storm Uri, which took place in February 2021.That storm froze gas lines, which tripped power plants and shut down water utilities for days. Hundreds died and property damage estimated were in the billions of dollars.
Somewhat opaquely, ERCOT said it was "entering the third season of winter weatherization inspections with enhanced requirements for generation and transmission facilities, compared to last winter season."
ERCOT said it issued the RFP because Texas has experienced "significant peak Load growth since last winter, recent and proposed retirements of dispatchable generation resources and recent extreme winter weather events."
Now, residents and businesses will have to hope extreme cold doesn't hit the Lone Star State this winter.
During severe cold and without the requested 3,000 MW of emergency reserves it sought, ERCOT said the state will face a 20% probability that electric emergencies will be called in December and a 17% chance that electric emergencies will be called in January.
One of the reasons operators declined to participate in the RFP was that ERCOT had asked operators of coal- and gas-fired plants that have been mothballed for years to make those plants ready to operate on short notice.
One of the plants ERCOT sought to activate was the J.T. Deely Power Station, an 892-MW coal-fired plant that was retired at the end of 2018. CPS Energy (San Antonio, Texas), a city-owned utility, owns that plant. Another facility on ERCOT's wish list was the Decker Creek Power Station, a 611-MW, gas-fired plant owned by Austin Energy (Austin, Texas). But that plant closed in 2020.
CPS Energy also owned another coal-fired plant, the J.K. Spruce Power Station, a two-unit, 1,300-MW facility, but earlier this year the utility's board had decided to close Unit 1 and convert Unit 2 to gas. It resisted calls to make Spruce Unit 1 available during the winter. That unit is in the process of being decommissioned.
All three facilities had been retired or were planned to be closed as part of each city-owned utility's plan to decarbonize their generation mix.
"We made a commitment to our community that those (units) would be retired," CPS Energy said of the Deely plant's two coal-fired units. "We continue to move forward with the implementation of our (lower carbon) generation plan to power our community through 2030."
In fact, the 11.1 MW of capacity that was bid all came from the demand response programs for large energy users.
During the December-January period, ERCOT estimated peak electric demand would average about 67,245 MW, with January's peak projected to be about 5,000 MW higher than in December. To meet that demand, the grid operator estimates around 92,000 MW of capacity will be available, 16% of which is scheduled to come from wind and solar generation. More than 80% of the rest will come from thermal generation, which encompasses natural gas, coal and nuclear power.
To ensure the state does not become overly reliant on intermittent generation resources like wind and solar, Texas voters this month ratified a measure that had earlier been approved by the state legislature to set aside $10 billion to support the construction, maintenance, modernization and operation of dispatchable generation. Most experts assume the generators would burn gas, though that was not required. For more on that, see June 9, 2023, article - Texas Legislation Would Give $10 Billion Boost for New Dispatchable Generation.
ERCOT noted that 15 units totaling 1,283 MW of capacity are slated to be out of service during the upcoming winter.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
