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New report shows tightening electricity reserve margins
News Release
Tuesday, December 04, 2018

Increased demand from oil and gas growth, fewer new generation projects drive reserves lower

AUSTIN, Texas – The Electric Reliability Council of Texas (ERCOT) today released its December Capacity, Demand and Reserves (CDR) Report, which includes planning reserve margins for the next five years.

The planning reserve margin for summer 2019 is forecasted to be 8.1% based on resource updates provided to ERCOT from generation developers. This is 2.9% lower than what was initially reported in the May CDR. The report shows reserves are expected to increase to 10.7% in 2020 and 12.2% in 2021.

“ERCOT’s ability to meet Texans’ growing power needs through the record-setting summer of 2018 was supported by the actions taken by power suppliers and consumers, and the policymakers who are committed to the success of the ERCOT market,” said ERCOT CEO Bill Magness. “We anticipate the same type of focus on system performance as we head into another year with tight reserves.”

The anticipated decrease in power reserves for summer 2019 is primarily driven by a higher summer peak load forecast and delays and cancellations of planned generation projects.

Significant oil and gas development in far West Texas continues to drive increasing electricity demand in Texas. The annual growth rate in peak demand in West Texas is forecasted to be around 8 percent through 2023, whereas ERCOT’s annual system-wide load growth rate is 2 percent during the same time.

The peak load forecast for summer 2019 is expected to be 74,853 MW, which is 651 MW higher than what was reported in the May CDR. ERCOT’s current system-wide peak demand record is 73,473 MW, set on July 19, 2018 between 4 and 5 p.m.

Since the May 2018 CDR report, three planned gas-fired projects totaling 1,763 MW and five wind projects totaling 1,069 MW have been canceled. Another 2,485 MW of gas, wind and solar projects have been delayed.

Resources totaling 1,714 MW have been approved by ERCOT for commercial operations since the May CDR, and a total of 7,463 MW of installed capacity became eligible for inclusion in the CDR.

ERCOT’s next Seasonal Assessment of Resource Adequacy will be released in March 2019, and the mid-year CDR report will be released in May 2019. 

 

Background on the CDR report

The CDR report includes a look forward at all currently operational and planned resource capacity as reported to ERCOT by resource developers and owners. It provides annual projections of ERCOT’s planning reserve margins for the summer and winter seasons. The planning reserve margin is the difference between the total generation available in the ERCOT system and the forecasted firm peak demand, with the difference expressed as a percentage of the forecasted firm peak demand.





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