Heat wave's ferocity ebbs in Texas, but peakload record set to crumble June 19-21

The Electric Reliability Council of Texas on June 15 did not forecast the system breaking its 80.1-GW peakload record on June 16, unlike the previous day's forecast, but did forecast peaks above that level June 19-22, as a heat wave strengthened day-ahead and week-ahead on-peak prices while becalming natural gas prices.

ERCOT North day-ahead on-peak power for June 16 delivery rose about $49 to trade near $79/MWh on the Intercontinental Exchange, weekend off-peak rose $6 to around $57.50/MWh, and next-week's package surged about $27 to more than $87/MWh. Meanwhile, Houston Ship Channel spot gas gained just a penny to $2.10/MMBtu for June 16 delivery.

CustomWeather on June 15 forecast high temperatures around 100 degrees F or higher June 16-19 in Houston and San Antonio, but the Dallas area's forecast calls for highs ranging from 90 to 96 over the same period, compared with normal highs of 93 to 94.

On June 15, ERCOT forecast loads to peak at 79.5 GW June 16, 80.3 GW June 19, 81.5 GW June 20, 82.2 GW June 21 and 80.8 GW June 22.

Changing forecasts

"The load forecast keeps changing and has had a great deal of error due to unpredictable convective risks," said Campbell Faulkner, senior vice president and chief data analyst at OTC Global Holdings, an interdealer commodity broker.

"What will determine if load records are broken will be if the high pressure heat ridge intensifies in a way that the various weather models are currently struggling to nail down. But ERCOTs price sensitivity to heat load became very clear last year due to issues with being able to cleanly forecast both solar/wind output and gross line congestion across the system."

Sturdy wind output

Morris Greenberg, S&P Global Commodity Insights senior manager for North American analytics, noted that wind output is forecast to remain fairly robust over the next week.

For the hour ending at 5 pm June 16, ERCOT forecast wind to be producing less than 6 GW, but those numbers are forecast to average about 9.7 GW over the following five days.

ERCOT forecast the solar fleet to be producing about 11.9 GW on June 17 and an average of almost 12 GW for the following five days.

Favorable output numbers from the solar and wind fleet, which has near-zero marginal costs, may keep wholesale power prices in check.

"Loads are higher next week, but so is wind output," Greenberg said. "It may be like this all summer."