Coal plant retirements, increased summer energy use leads to shrinking Texas reserve

The U.S. Energy Information Administration recently reported that the Electric Reliability Council of Texas (ERCOT) faces an energy reserve margin of just 11 percent this summer — a drop from previous years and lower than their reference reserve margin.

The reason for this is twofold: record-breaking summer electricity demands coupled with the retirement of three large coal plants earlier this year. May and June set new monthly demand records, well exceeding ERCOT’s expectations. As the grid operator for most of Texas, ERCOT’s dwindling resources have left the state with much lower reserve capacity to meet expected peak loads in the months ahead.

For a brief period, however, ERCOT’s seasonal assessments projected just 9.3 percent reserves. After several more generators were made available for use, its estimates rose. The three coal plants that retired has brought about 4,273 megawatts (MW) to the region’s generation capacity, representing about 4 percent of ERCOT’s generating capacity at the end of 2017.

Peak summer load predictions by ERCOT put Texas at 72,756 MW if the weather continues as normal — even higher than the current record set in August 2016, of 71,110 MW.