ERCOT’s Effective and Lucrative Last Bastion Against Blackouts

August 18, 2020

Texans love a good fight, especially if there is a lot riding on the outcome and the battle comes down to the wire only to be won in the waning seconds by the last fighter standing. 

Maybe that’s why ERCOT’s Load Resource demand response program has been a favorite of commercial organizations in the Lone Star state over the last few years. 

As we’ve discussed in a previous article on the ERCOT’s protocols for demand-side resources, dispatching Load Resource is the grid operator’s last line of defense before initiating rolling blackouts. 

When demand approaches what the grid can supply within 3,000 MW’s, ERCOT takes action.
7 levers are used by ERCOT before they have to call blackouts (BO’s).

Load Resource has consistently been ERCOT’s most rewarding demand response program. Look no further than 2019 for proof.  

In 2019, a year which saw ERCOT call its first demand response events in half a decade, the program not only paid extremely well,  but participants were never called to curtail their loads. 

In the demand response events on August 13th and 15th of 2019, grid balance was restored before Load Resources were needed. Still, Load Resource participants earned revenue 1) for being available to curtail and 2) because of the spike in real-time pricing that reached $9,000/MWh. 

The year Load Resource had in 2019 embodies how economic drivers of the Texas energy market are working to keep the grid reliable, demand response participants happy, and electricity rates relatively low for ratepayers.

What kind of year will 2020 be for Load Resource?

Predicting the future is usually a fool’s errand, especially when it comes to the energy industry. But let’s give it a shot anyway.

Electric demand continues to rise in Texas and ERCOT has taken measures to keep its grid reliable. The reserve margin is growing and a new demand response program (ERCOT Contingency Reserve Service or ECRS) will eventually be added to the ISO’s arsenal in 2024.

But if we look at the last five years, Load Resource has been called a grand total of zero times. All the while, participants have earned significant revenue for being available to help the Texas electrical grid if needed.

Sometimes the past helps predict the future. In that case, it looks like 2020 will be another strong year for Load Resource in Texas. 

This is, after all, 2020. The summer of the wildest year we can remember isn’t over yet. But the Texas grid has been up for the fight so far this year. If the last few rounds get particularly punishing, Load Resource is standing guard as the grid’s lucrative last bastion. 

To learn more about ERCOT’s Load Resource program as well as the state of the energy market in Texas, join CPower’s Joe Hayden and Mike Hourihan on September 3, 2020 (changed from Aug 27 in response to Hurricane Laura), for a 60-minute webinar: The State of Demand-Side Energy Management in Texas for 2020. Register HERE. 

 

Published by

Joe Hayden

Joe Hayden

As Vice President & General Manager in the ERCOT Market at CPower, Joe has responsibility for CPower’s demand-side energy management offerings in Texas. He has more than 27 years of management experience leading sales teams for Fortune 100 companies and electric utilities.

Joe Hayden
Joe Hayden

As Vice President & General Manager in the ERCOT Market at CPower, Joe has responsibility for CPower’s demand-side energy management offerings in Texas. He has more than 27 years of management experience leading sales teams for Fortune 100 companies and electric utilities.