What happened during the ERCOT winter event, what’s happened since, and what may happen in the future.
The week before the event we started to see the cold weather forecasts and the projections for high demand for the following week. It was pretty clear that there were going to be demand response events on Monday and Tuesday, so we started to notify our customers of this.
Over the weekend, demand forecasts kept increasing and the situation was looking progressively worse.
Then, on Monday morning right after midnight, ERCOT called for demand response deployments and our customers responded quickly. ERCOT called both the Emergency Response Service customers and Load Resource customers which are two different demand response programs in ERCOT.
Unfortunately, there were just too many generators that were coming offline due to weather-related issues and this included essentially all types of generators such as natural gas, wind, coal, and nuclear.
You can see on the screen that grid frequency was dropping dramatically on Monday morning and that’s when ERCOT had to call for firm load shed by the utilities.
If they hadn’t done this quick enough, the grid could have gone into uncontrolled blackouts where the grid would have been down for weeks.
The grid was actually 4 minutes away from this and if the frequency had stayed below the line where the red is for four more minutes, other generators would have tripped offline and full blackouts would have occurred which would have taken weeks to recover from.
Thankfully the rolling blackouts worked and frequency recovered and stabilized the grid.
The rolling blackouts stayed in place until Thursday and the emergency was finally lifted from the grid on Friday morning around 10 am.
This next graphic compares the winter event we had in 2011 to the one we just went through.
You can see that every number on the screen is much worse for 2021 than it was in 2011.
First, the projected demand of what the grid would have been if it wasn’t for load shed is 17,000 MW higher this time. It actually would have set an all-time peak demand record, even higher than the summer.
Second, the maximum amount of generation that was offline during the event was 52,000 MW which is almost half of the total generation capacity in ERCOT. In 2011 it was only 14,000 MW. It’s tough to plan for losing almost half of your capacity during a winter storm, so that is something that’s being looked at closely in the market and how we prevent that in the future.
The other important figure here is the load shed which reached 20,000 MW during the event and this lasted for 70 hours compared to 4,000 MW of load shed for 7 hours in 2011.
Clearly, this was unprecedented.
The other note I’ll make is energy prices were at the $9,000 cap during the majority of this event. In the past, prices have only been that high for a couple of hours on summer afternoons. So, the economic fallout from this has been huge and we have seen that with some bankruptcies that have been announced.
Now, since the event has ended, there has been a lot of political fallout as well. The ERCOT CEO has resigned. All 3 PUC commissioners have resigned. Also, many ERCOT board members have resigned.
The legislature is involved as well. There are many bills that have been filed coming out of this event, but it is all still to be determined so it’s difficult to forecast what the end result will be.
We do know there will be changes, but what those changes are we just don’t know yet. A lot of the focus has been on the weatherization of the generation and natural gas supply.
CPower has supported a filing to the PUC by the trade group TAEBA to remove the $50 million cap on ERS. There has been a lot of talk about the benefit that more demand response and DERs could bring to the market and we believe that to be true.
Demand response may not have solved this event, but it certainly can help prevent other issues in the future especially as more wind and solar come on the grid.
This is a situation we’ll be keeping a close eye on at CPower, so check back to the Current for the latest updates.
2020 has been a bumpy ride for the Texas energy market, particularly for the oil and gas industry. CPower’s Joe Hayden and Michele Taylor discuss how the commercial sector in Texas is coping with Covid and reveal key strategies for saving on energy with demand management and earning revenue with demand response in the Lone Star State in 2021.
This webinar is designed to give organizations like yours the demand-side energy management insights you need to make the most of 2021 and beyond in Texas.
In this webinar, you will learn how your industry can:
- Prepare for energy management in 2021
- Utilize programs to help you reduce energy cost and generate revenue
- Learn key energy tactics and strategies from others in your industry
- Understand important regulatory news that can impact your energy plan
- Gain insights into energy storage and DERs in your market and industry
In recent years, Texas’s energy market has been put to the test with shrinking reserve margins, increased electrical demand, and grid-threatening heat waves. The ERCOT grid has held and the market has helped organizations in the Lone Star State earn significant revenue by monetizing distributed energy resources.
The Covid-19 pandemic of 2020, however, has unleashed a Texas-sized helping of uncertainty across the state, causing organizations like yours to scramble for energy insights needed to optimize your energy use and spend.
The one-hour webinar is designed to give your organization the demand-side energy management insights you need to make the most of 2020 and beyond in Texas.
Topics to be covered include:
- How ERCOT’s economic-driven market design differs from other US energy markets (and why that design may be better for your organization’s bottom line)
- Why renewable energy is growing in Texas
- How organizations with distributed generation resources can earn revenue
- Lucrative demand response opportunities in Texas
- And more…
CPower’s Texas experts Mike Hourihan and Joe Hayden host this webinar that includes a question and answer session.
Download the slides from this webinar as a pdf here.