Powering the Lone Star State: the Energy Outlook for Texas in 2015

Now that it’s midway through Winter 2015, many people wonder what the coming summer will be like. In particular, “How hot it will get, and what does this mean for electricity in my Texas community.” Well, back in December 2014, the Electricity Reliability Council of Texas (ERCOT) released its energy usage forecast for this coming year (and beyond).

The good news is that the report states that there is plenty of capacity to meet demand during Summer 2015. However, there are still a few problems that could complicate service in parts of some cities. And if you’re living in one of those areas, you’ll want to know what those problems are and how they might affect you and your family.

Crunching the Numbers

ERCOT expects a possible peak demand of 69,057 megawatts (MW). For scale, 1 MW = the use of about 200 houses during peak summer demand (that’s 5 kw per house). In order to ensure there’s enough electricity, there needs to be extra capacity just in case generators are unavailable (due to scheduled maintenance or sudden technical problems) and demand is rising.

That’s when so-called “peaker” generation can fire up to meet demand. That reserve margin for this summer is 15.7%, bringing the total generation capacity up to 77,000 MW. Part of that generation includes new 2,109 MW of capacity fueled by natural gas, 710 MW of wind and 38 MW of solar (both maximum rated or “nameplate” capacity) that has been installed since last May.

However, if reserves are not available, customers will be asked to reduce consumption to reduce the load. This can include demand-response programs that allow the local utilities to control home air conditioning, pool pumps, and industrial usage. High demand and low supply can lead to rolling blackouts in order to prevent damage to the entire grid network.

The Influence of Renewable Energy

This year, contributions from renewable energy are being estimated differently: partly because there’s enough historical performance data and also because the new CREZ transmission lines have reduced congestion, allowing more power to flow.

Wind power is estimated to be at 12% nameplate capacity from non-coastal wind areas and 56% from coastal facilities during the summer, with those capacities changing to 19% and 36% respectively in the winter. The state’s only offshore wind farm was in its planning stage and lost its lease this past July.

Utility scale solar, meanwhile, is counted at nameplate capacity with the plan being that, once that capacity increases to over 200 MW of “commercial-scale,” there will enough historical data behind it to provide a more accurate estimation of performance. Current installed wind capacity is 11,000 MW while solar is 189 MW (about 0.2% of total capacity).

Some Complications Ahead

The ERCOT report lays out two problems that could lead to complications in the coming years. One is growing demand from reviving economy and increasing population. By 2020, Texas’s population is predicted to rise by about 2 million people with summer peak electric demand rising 1.5 % from 69,057 MW to about 74,000 MW. While not much of an increase, this ratio leaves less reserve power available. In the long term, growth is expected to continue while total capacity will likely remained pinned at 80,000 MW. Options include building more generation and opening up transmission access to other US grid systems (which would open up a reluctant ERCOT to more Federal oversight).

While the CREZ transmission project has been attracting more wind farm developers in the north and west, the second problem looms for southern part of Texas: the need for additional transmission capacity to the growing Houston metropolitan area. During 2014, the south side of Houston had the most frequent —and expensive— congestion problems in all of ERCOT. While Houston’s electrical demand has increased, there has been little generation development or transmission built to support it.

During the last few years, only 1,800 MW of new generation replaced 3,800 MW of old capacity that was retired. Add to this the anticipated 690 MW of load from a proposed liquefied natural gas (LNG) project, and the growing concern over Houston energy prices as well as who’s going to pay for the line becomes palpable.

Whither the Weather?

With all that in mind as we experience the rest of winter (predicted to be colder than the beginning) and head into summer, NOAA’s long term prediction is for “equal chance” (33.33%) for above, normal, or below average temperatures for all of Texas from June through August 2015. Statistical equivocating aside, given that the West and East Coasts are likely to be warmer than average with a mostly neutral El Niño, Texas might simply be content with only normal-ish heat during the summer.

Thus, while it’s still mid-winter, perhaps it’s best to expect one sure thing about this summer’s Texas weather: change. At least it looks like ERCOT will be able to supply your Texas community with enough electricity to get you through it.

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