Winter Storm Uri Market Alert – Feb 15, 2021

By March 3, 2021 News

ERCOT Power Demand is at or near all time winter highs due to the Winter Blast currently blanketing the entire state, with an expectation based on current temperatures that the high demand will continue through today and through the morning hours of Tuesday. Forecasts for today and Tuesday calling for even colder weather are driving forecasted power demand levels to shatter the previous all-time winter peak demand record of 65,915 MW set in January of 2018 and potentially to break the summer peak demand record of 74,531 set in August of 2019. What’s really exacerbating this issue is that more than 30,000 MW of generation is in a forced outage due to frozen pipes, frozen wind turbines, or a lack of gas. This is forcing ERCOT to call on all available demand response load and into implementing EEA 3 status, which is detailed further below. Without these measures in place, demand would hit or exceed the previous Winter Peak and could be testing the Summer all-time Peak Demand record.

The graph below shows ERCOT’s current forecast of load (green line), yesterday’s forecast (blue line) and the current wind generation forecast, all by hour.

All Emergency Responsive Reserve (ERS) and Load Resource (LR) have been called to assist in lowering Peak Demand. As you can see below, this has drastically reduced the Demand Curve (dark green line) from midnight until now, however if you look at the light green line, you can see that the Forecast Demand is expected to far exceed available capacity and reserves. Expectations are that LR and ERS will continue to be called for the next 24 hours in an attempt to reduce this demand.

Additionally, ERCOT has issued an EEA level 3 because electric demand is very high right now, and supplies can’t keep up. Reserves have dropped below 1,000 MW and are not expected to recover within 30 minutes; as a result, ERCOT has ordered transmission companies to reduce demand on the system.

This is typically done through rotating outages, which are controlled, temporary interruptions of electric service. This type of demand reduction is only used as a last resort to preserve the reliability of the electric system as a whole.

In these situations, each utility is required to lower the demand on its system based on its percentage of the historic ERCOT peak demand. While each utility is responsible for determining how to implement the required demand reduction, most utilities use rotating outages for this purpose. Rotating outages primarily affect residential neighborhoods and small businesses and are typically limited to 10 to 45 minutes before being rotated to another location.

As a result of the above demand/supply imbalance, ERCOT prices have been at or near the $9,000/MWh price cap since about midnight last night and could persist for the next 24 hours in a similar fashion.