Texas grid sets new peakload record in heat wave, but renewables hobble power prices

The Electric Reliability Council of Texas set an all-time peakload record of 80.8 GW on June 27 and forecast topping that number June 28-29 as a heat wave spread triple-digit high temperatures across the state, but strong renewable output kept a check on wholesale power prices.

The new record beat the 80.1-GW previous record set July 20 and matched June 26, but remains below the base case seasonal peak of 83.4 GW included in ERCOT's updated summer 2023 Seasonal Assessment of Resource Adequacy.

ERCOT's seven-day load forecast issued at 10:30 am on June 28 forecast load to peak at 82.1 GW June 28, 81.8 GW June 29 and 80.5 GW June 30.

The National Weather Service has issued heat advisories or excessive heat warnings for all of Texas except the Panhandle and parts of the Rio Grande Valley area.

CustomWeather reported the ERCOT population-weighted average high was 102.6 degrees F June 27, up from 101.2 F June 26. The National Weather Service forecast highs and heat indexes for the remaining weekdays at the following metro areas:

• Dallas: 105 F, heat index 115 F June 28; 103 F, heat index 109 F June 29; and 100 F (heat index not available) June 30
• Houston: 99 F, heat index 112 F June 28; 98 F, heat index 110 F June 29; and 97 F June 30
• San Antonio: 102 F, heat index 105 F June 28; 100 F, heat index 103 F June 29; and 99 F June 30

Market impacts

Despite the heavy loads and high temperatures, wholesale power prices have remained fairly tame. For example, the ERCOT North Hub on-peak locational marginal price for June 28 was just $48/MWh, S&P Global Commodity Insights data shows, down from June 27's $50.07/MWh and June 26's $454.88/MWh.

In June 28 trading on the Intercontinental Exchange, ERCOT North Hub fell to about $41.75/MWh for June 29 delivery and the balance-of-week/June 30 on-peak package graded down $1 to about $60/MWh.

Natural gas prices have also been fairly weak, with the Houston Ship Channel spot price for June 28 delivery at $2.545/MMBtu, less than half the $5.895/MMBtu on June 28, 2022, and also from the previous five-year average of $2.621/MMBtu. In June 28 trading, Houston Ship Channel spot gas was trading around $2.50/MMBtu for June 29 delivery.

The forecast for July 1-7 shows most metro areas' high temperatures below 100 F, which would tend to weaken power demand during a holiday week, which is reflected in June 28's ERCOT North Hub July 1-2 off-peak package sliding about $12.50 to about $123.25, but the July 3-7 package was up $24.70 to about $109.25/MWh.

Supply side changes

In related news, ERCOT on June 27 notified market participants that the mothballed 74-MW Petra Nova Power gas turbine plant near Houston would not restart operation on June 28, as previously announced, and would instead resume operating July 15.

A more significant factor in July 3-7 power pricing might be renewable output. ERCOT's updated summer SARA's base case scenario indicates that the system's solar resources would be generating at a level of about 12.3 GW during the seasonal peak hour, while wind resources would be generating at a level of about 10.4 GW.

ERCOT's solar resources have been operating at the level of around 11 GW during the peak hour ending at 5 pm CT June 26-27 and are expected to exceed 12 GW through June 30, compared to averaging about 10.5 GW June 19-23.

The ERCOT wind fleet performed relatively poorly during the peak hour June 19-23, averaging less than 9.4 GW, which declined to less than 8.4 GW on June 26, but topped 17.4 GW on June 27 and is expected to average about 18.5 GW June 28-30.

ERCOT's forecast for July 3-4 would have solar resources providing about 9.2 GW during peak hours on those dates, and the wind forecast is for the fleet to provide about 5.5 GW during the peak hour July 3-4. ERCOT has not yet released a forecast for July 5-7.