ERCOT, the organization responsible for maintaining the Texas electricity grid, is predicting more than adequate capacity in the spring amidst an expected surge in renewable power for the state in 2016. In its Seasonal Assessment of Resource Adequacy, ERCOT is predicting a spring usage peak of 58,279 MW. This is well within system capacity even with the assumption that there will be 9,482 MW of lost system capacity due to maintenance and forced outages. This is based on historical outage data going back to 2010. The demand estimates were made using May 2006, a hotter than normal May, as a model.
Due to the fact that Texas’ operational solar capacity recently passed a threshold of 200 MW, the methodology for determining how much solar power to include in capacity projections has changed. This resulted in a decreased amount of solar power included in the spring projections. However, 2016 is expected to be an exceptional year for solar energy in Texas.
By some estimates, the state will see an additional 2 GW of installed solar capacity in 2016. This would result in a 10-fold increase in solar electricity. Texas has long been considered a sleeping giant when it comes to solar power. Although it has the geography and climate to be a substantial producer, it has had very little in the way of utility scale solar power. This is changing in a big way with projects underway for both the Austin and San Antonio municipal utilities among others. The Austin project, in particular, is notable for its low cost. The purchase agreement for that project calls for a rate of less than 5 cents per kilowatt hour. This is cheap even when compared to natural gas. Several years of cheap natural gas have led to low electricity rates in Texas and created a challenging environment for solar and natural gas to compete on price.
Despite this, renewables have continued to gain ground in Texas, led by wind in particular. Wind, along with solar, make up around two-thirds of the state’s additional capacity for 2016. Of the 12,500 MW in new power expected to come online, wind will account for about 63%. 2016 will likely see wind overtake coal as the second largest source of electricity in the state.
Although coal is rapidly becoming a smaller contributor to the state’s electricity output, coal plants are still critical for keeping the lights on in Texas. The report downplays any potential impact of compliance with the Mercury and Air Toxics Standards regulations for coal units. With the final compliance date being April 15, 2016, planners expect generators to be in compliance.
The preliminary summer report predicts record peak electricity usage for the state with demand peaking at over 70,000 MW for the first time. Against this, it is predicted that the system will have over 79,000 MW of available generation.