Tag Archives: ERCOT

ERCOT Report on Clean Power Plan Misses the Big Picture

Source: Dpysh wWe knew this was coming. Everyone knew. The power sector is the single largest source of carbon pollution in the U.S. and one of the largest in the world, yet there are no limits on how much carbon power plants can emit into our air. The U.S. Environmental Protection Agency’s Clean Power Plan (CPP) for new and existing power plants is urgently needed, is well within Texas’ reach, and can ensure that Texas (more so than other states) forges a strong and prosperous clean energy economy.

But this week, the Electric Reliability Council of Texas (ERCOT), which manages roughly 90 percent of Texas’ power grid, issued a report that overestimates the challenges posed by the CPP to the state’s electric grid reliability. Furthermore, it failed to appropriately recognize key tools available to ERCOT and the state to meet the proposed CPP.

Here’s a breakdown of what the report missed: Read More »

Posted in Clean Energy, Clean Power Plan, Energy Efficiency, Smart Grid, Texas| Tagged | Leave a comment

UPDATE: Demand Response Helped Texas Avoid Rolling Blackouts in the Face of Polar Vortex

Source: KXXV

Source: KXXV

Good news for clean energy in Texas!

The Electric Reliability Council of Texas (ERCOT), Texas’ power grid operator, presented a report to its Board of Directors this week confirming what we already knew: demand response is a worthwhile investment that strengthens Texas' power grid.

Demand response is an innovative tool used by utilities to reward people who use less electricity during times of peak, or high, energy demand. In effect, demand response relies on people, not power plants, to meet the demand for energy. And on January 6th when the Polar Vortex hit Texas, it did just that. Read More »

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Demand Response Helps Texas Avoid Rolling Blackouts in the Face of Polar Vortex

MaritaHeadshot

This commentary originally appeared on our Texas Clean Air Matters blog

As we begin a new year, the outlook for 2014 looks bright.  But as the Polar Vortex has descended upon the U.S. over the last few days, we have been reminded of the past, specifically the winter of 2011 when Texas’ electricity grid stuttered under the extreme cold.

Monday, as a record-breaking cold snap whisked over the U.S., the Electric Reliability Council of Texas (ERCOT), the state’s grid operator, warned of possible blackouts, just as they did in 2011.  We were lucky this time, but in February of 2011 we were not, and blackouts occurred throughout the state.

ERCOT’s warning meant that the grid's power reserves “dropped below a comfortable threshold,” and the "system was just one step away from rolling blackouts” as the need for energy outpaced supply.  As these blackout threats loomed, two power plants succumbed to the cold and went down.  The loss in capacity amounted to about 3700 megawatts (MW), with 1800 MW lost due to the cold.  According to Dan Woodfin, ERCOT’s Director of System Operations, “if we had lost another unit it would have put us into an Energy Emergency Alert Three” – the stage that prompts rolling blackouts.  This is unnecessary and unacceptable. Read More »

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Debate Over a Changing Texas Energy Market Heats Up at Senate Natural Resources Committee Hearing

Marita MirzatunyOver the past two years, Texas’s changing energy landscape has been a focus of EDF’s work.  In our Texas’ Energy Crunch report from March 2013, we highlighted that Texas has a peak capacity constraint – meaning that the power grid becomes strained when, for example, everyone is using their air conditioning units on hot summer afternoons.  This challenge, coupled with increased climate change and drought, signal the need to prepare by adopting a smarter grid and cleaner resources.

The Public Utilities Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) have been engaged in this conversation and various proposals have been laid on the table to determine what Texas’ energy future will look like.  EDF maintains the position that, whatever reforms are made, customer-facing, demand-side resources – defined here as demand response (DR), renewable energy, energy efficiency and energy storage – must play a key role to ensuring reliability, affordability, customer choice and environmental improvements.

Energy-Only Status Quo or Capacity Market or…?

Texas’ current energy-only market structure pays power plants only for the energy they produce.  This is beneficial in that generators are not overcompensated, but the downside is that energy companies aren’t incentivized to build in Texas and energy management providers (DR companies) are not viewed as equal players.  Energy prices are low due to an upsurge in cheap, abundant natural gas and wind – and without a guarantee for a high return on investment, companies will not take the risk of constructing costly new power plants. Read More »

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What Does It Mean For Energy Efficiency To Be A Resource In Texas?

We’ve discussed the potentially grave impacts of the Texas Energy Crunch in a number of our previous blog posts. Time and time again, we repeat that the cheapest, cleanest and most reliable energy resource is the energy we save through energy efficiency. But our energy efficiency programs in Texas are still modest compared to other states. Beyond politics, there is another key issue limiting our state’s energy savings: Texas does not treat energy efficiency as a ‘resource.’

Traditionally, energy efficiency is left ‘invisible’ to utilities and grid planners—so they lose count of its many benefits. Treating energy efficiency as a resource, instead, puts it on a level playing field with other energy resources, such as power plants. This allows utilities to realize the unique benefits energy efficiency has over other energy sources.

Energy efficiency can reduce harmful greenhouse gases, save people money and create jobs – and it is extremely competitive with other energy resources. When the energy saved through efficiency is weighed against new energy resources, efficiency upgrades to buildings and homes generally weigh in at just one-third of the cost of building a new fossil-fuel power plant. On top of that, energy efficiency upgrades can eliminate the need to install or replace other expensive electric grid equipment. This cost-savings is one of the many benefits generally overlooked by utilities and electric grid planners.

Part of what prevents electric grid planners from counting efficiency as a resource in Texas is the way that the energy market is structured. When Texas deregulated its energy market in 1999, the aim was to increase options for customers and lower prices. Efficiency programs were not included in the new market structure. Instead, they were left for transmission and distribution utilities (TDUs), the “wires” companies that deliver electricity from power plants to customers, to manage. With efficiency left out of the restructured energy market, the Public Utility Commission of Texas (PUC) and other state leaders tend to view efficiency programs as subsidies that exist outside of the market. Read More »

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NERC Demands Action From ERCOT To Keep The Lights On In Texas

This commentary was originally posted on EDF's Texas Clean Air Matters blog.

Last week was a busy one in Texas, with the beginning of the 83rd Legislative session attention was focused on incoming lawmakers, both seasoned and freshmen, and the opportunity that only happens every two years to address serious issues in Texas including water scarcity, education, tax issues, and of course energy issues.

So it's understandable that no one seems to have noticed a strongly worded letter to the Electric Reliability Council of Texas (ERCOT) from the North American Electric Reliability Corporation (NERC) last Monday demanding more action to ensure electric reliability in Texas, and asking ERCOT to report back to NERC by April 30 on additional actions taken. NERC isn't some federal boogey man either; it's a corporation founded by the electric industry to create commonly accepted standards for electric reliability across North America, usually through voluntary compliance. President Bush's Energy Policy Act of 2005 gave the corporation "the authority to create and enforce compliance with Reliability Standards," which is where this letter comes into play.

In their 2012 report, NERC highlighted ERCOT as the only region in North America that was not maintaining adequate electric reserves to meet demand, and with this letter they made it very clear that the actions taken to date have not done enough to mitigate that risk. In the letter, NERC President Gerry Cauley notes that the PUC and ERCOT are continuing to address energy reliability issues, but finds that "solutions have not yet sufficiently materialized to address NERC’s reserve margin concern."

Cauley goes on to say that "it is still unclear to us how ERCOT intends to mitigate issues that may arise on the current trajectory and when new resources may be available to meet growing demand." So according to the corporation whose membership consists mostly of utilities, grid operators, large and small customers, and electric regulators, the actions that the PUC and ERCOT have taken at this point are not enough to ensure we'll have reliable electric supply, risking blackouts as soon as this summer.

As lawmakers settle into Austin for the next few months they'll certainly be paying close attention to this issue, though many have indicated they would prefer that ERCOT and the PUC develop the solutions to this problem. Cauley's letter serves as notice that the PUC and ERCOT need to be more aggressive if they want to ensure a reliable supply of power in Texas. Certainly both agencies are putting serious time and effort into keeping the lights on in Texas, including effort so expand existing demand response programs, but NERC clearly thinks they need to be doing more.

All of this reminds me of the Texas drought: a year ago it was a huge looming crises, but a break in the weather took everyone’s mind off of the drying rivers and lakes, even though they never really recovered. Lately the drought has been back in the news as Texans realize that we're basically in the same place that we were in 2011.

No one could accuse ERCOT or the PUC of sitting idly by or pretending this risk isn't real. However, they have yet to send a strong enough signal to the market to spur investors in demand response or any other resources to develop new projects. About the only thing that has been done is the extension of the federal production tax credit for wind energy, which has wind developers racing to build new projects in Texas. The concern is that the solutions they've begun work on to date may not get us to where we need to be by this summer.

This letter is a reminder that the energy crunch hasn't gone away, things are not likely to change in the near term if serious action isn't taken soon. That is a risk we can't afford to take given a looming drought, a growing economy and a stagnant electric market. NERC has asked ERCOT to report to them on their progress by April 30, near the end of our biennial legislative session, and one in which the critical PUC/ERCOT sunset legislation is expected to pass, maybe legislators should consider a similar request.

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