ERCOT’s Reserve Margin and Renewable Forecasting – Problems Coming this Summer?

What’s the issue?

Texas suffered substantial power outages earlier this year when the regional electric transmission operator, ERCOT, was forced to implement rolling blackouts in the midst of a statewide cold weather event.

Why does it matter?

Winter is not even the peak electric usage period in Texas, which occurs each summer. This summer, ERCOT’s reserve margin, or margin between peak demand and total capacity, could cause a repeat of the problem.

What’s our view?

The ability to project the commercial operation dates of future projects, most of which are renewable, may become critical because Texas is relying on planned projects for much of its reserve margin over its projected summer peak demand. Unfortunately, our analysis shows that ERCOT has a very unimpressive record of accurately forecasting its future capacity.

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