Tuesday, November 15, 2016

Texas Power Market Shows Impact of Renewables

The Demand and Energy Report just released by ERCOT for October shows that renewables are making a major difference in that sizable market.  Long the leader in wind generation capacity, Texas is not slowing down much in the build out of additional resources, and now solar PV is beginning to appear on the radar.  

It is impossible not to notice that wind power generated 46% as much power as natural gas did in October.  Despite the claim that wind and natural gas are a perfect pairing, due to wind's intermittent variability, the reality is that it isn't a marriage of equals.  Gas must accept the leftovers, and the larger the wind footprint, the more stable is the aggregate power output, reducing the call on gas fired generators.  

Here is the graphical picture of the ERCOT  2015 vs 2016  generation mix as of October:

And here are the renewables.....

Texas is only recently entering the utility scale solar arena, and capacity will ramp up quickly.  It contributes an immaterial amount now, but it could be impacting gas generation as soon as next summer.

Other notables:

  • Clearly the increase in natural gas prices has induced power switching back to coal in the last few months.  
  • ERCOT wind output was almost 47% higher in October, year on year.
  • The timing of nuclear refueling outages resulted in about 20% more nuclear generation this year in October.
  • The slightly higher total generation in Oct 16 vs Oct 15 coincided with an unusually warm October.  We should see this effect in November as well, based on recent temperatures and forecast.
  • Large increases in renewable capacity are slated to come online next year (mostly wind), and aggregate demand in the ERCOT region is expected to rise about 1%.  That is also close to the 10 year forecast compound growth rate, with an exception in 2018 where growth is anticipated to be closer to 2% year on year.