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Texas Bright Sun

Texas Heat Wave Means Record-Setting Demand for Electricity

Texas is hot right now, and demand electricity demand is even hotter. Consumers are combating the temperature by turning up their A/C dial, but this is resulting in record-setting electricity demands. 

As Reuters has laid out, the demand has been steadily rising. These demands are happening despite The Electric Reliability Council of Texas (ERCOT) forecasting lower reserve margins overall in their most recent Seasonal Assessment of Resource Adequacy (SARA) report.

ERCOT and EIA Findings

In the summer SARA report, ERCOT expresses the potential need to enter Energy Emergency Alert (EEA) status to ensure the longevity of the electrical grid. They state that the “final summer SARA report includes a forecasted peak demand of 74,853 MW, which is 1,300 MW higher than the all-time peak demand record set last summer on July 19.” 

ERCOT also states that the forecast of total electricity generation is higher than it was during preliminary findings in March, meaning that total generation capacity is up, but electricity demands are still at record levels due to the sweltering Texas heat.

The U.S. Energy Information Administration (EIA) says that ERCOT surpassed the record for peak hourly load in July of last year. This year they report that just the start of the Texas heat wave was already producing heavy demand levels: they reported that from July 15th to July 22nd, “the demand in the lower states peaked at 7o4 gigawatts (GW).” 

The EIA also states that in 2017, gigawatts reached the 718 mark, meaning that this summer has definitely seen a huge demand. This will continue as temperatures stay humid and hot.

Increased Electricity Rates a Result of Lower Electricity Generation?

Generators are also being retired because low electricity prices are making it hard to justify their operation. Commensurate with the price of gas, some generators are not turning a profit because natural gas drives most of Texas power. So, as the Permian continues its profitable outpouring, generators disappear. And an absence of generators lowers the available reserve for electricity.

As Keith Poli breaks down in this post, prices  there will most likely be an increase because of a dearth of electricity generation to meet the higher demands: “Higher real-time prices this summer would likely increase forward prices through 2022 or even longer, until enough new generation is in ERCOT’s planning queue and under construction. “

At this point, we just have to wait and see what comes out of this heatwave, and if the rises in temperature are illuminating future weaknesses in the grid. Once the heatwave cools some, and ERCOT publishes their data on the demand, we will get a more accurate read on just how much this heat wave affected electricity demand.

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