Texans may deal with spikes in energy prices and rolling blackouts in the coming months as energy usage ramps up to combat the summer heat, Axios reported.
The Electric Reliability Council Of Texas (ERCOT), the grid operator responsible for supplying energy to most of Texas, operates differently than most other grids. ERCOT pays power plants only for the energy they produce and sell, known as an energy-only electricity market, according to Axios.
Most grid operators make “capacity payments” to generators to be available even if they are not currently producing any energy.
ERCOT’s strategy keeps energy costs down for consumers. In exchange, power plants with higher operating costs are driven out of business and drop off the grid during times of cheap fuel prices. Several coal plants were taken offline in early 2018, unable to compete with cheap natural gas.
Other power plants have sped construction to ensure they are prepared to take advantage of rising energy prices, however, which may be enough to balance out the loss of capacity from less efficient power plants disappearing.
“ERCOT continues to anticipate having sufficient electricity generation to meet customers’ demands, assuming the system experiences normal operating conditions,” ERCOT Manager of Resource Adequacy Pete Warnken told Dallas News in April. “Although generation capacity is up since our last summer assessment that was released in March, we still expect to have tight operating reserves during peak demand periods.”
ERCOT estimates it will have an 11 percent “reserve capacity” this summer. Reserve capacity is the difference between the grid’s full production capacity and consumer demand. Grid operators usual comfort level reserve capacity is 13.75 percent, Dallas News reported.
In situations where energy supplies are especially scarce, ERCOT may import energy from neighboring grids to make up the difference, though that does not always ensure a steady energy supply.
“There is a possibility that we may have what are called rotating outages,” ERCOT Senior Director of System Operations Dan Woodfin told Dallas News. “Since we have more resources, that risk is probably reduced a little bit. But really, the focus for ERCOT is to make sure that we can quickly respond.”
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