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Heat waves pushes Texas power grid into red zone
HOUSTON (Reuters) - The Texas power grid operator has scrambled this week to meet soaring electricity demand in the face of a brutal heat wave, and residents of the second most populous U.S. state are one power plant shut-down away from rolling blackouts.
Power demand for Electric Reliability Council of Texas, Inc, or ERCOT, which runs the power grid for most of the state, hit three consecutive records this week as Texans cranked up air conditioners to escape one of the hottest summers on record.
The grid operator on Thursday cut power to some big industrial users, and businesses and households face a repeat of the rolling blackouts they faced in February, when a bitter cold snap interrupted power supplies.
Though ERCOT has done a good job balancing supply and demand, "You always have to expect the unexpected can happen," said Arshad Mansoor, senior vice president at the Electric Power Research Institute (EPRI). "A unit can shut. The wind may not blow."
It's been a year of extreme weather for the Lone Star State, already suffering from the worst drought on record.
Ice storms in February crippled dozens of power plants, forcing ERCOT to impose rolling blackouts for hours as electric supplies dropped below demand for the juice.
Now a protracted heat wave with temperatures topping 100 degrees Fahrenheit (37.8 Celsius) for several weeks in a row in many cities has stretched power supplies to the limit.
Power usage in ERCOT reached its highest level ever on Wednesday at 68,294 megawatts, almost 4 percent over last year's peak.
The Texas grid faces at least one more day of extreme stress before temperatures cool a bit over the weekend. Temperatures in Houston, the state's biggest city, should return to near normal levels in the upper 90s over the weekend, according to AccuWeather.com.
The state's biggest power generators, including units of Energy Future Holdings, NRG Energy, Calpine Corp and others, have been running flat out to cash in real-time prices that have hit the $3,000/MWh cap in recent days.
But the state's reserve margins have been running razor thin. On Wednesday ERCOT came within 50 megawatts of interrupting flows to industrial customers. That's equal to the output of about 25 industrial-scale windmills.
One megawatt powers about 200 homes in Texas during hot weather when air conditioners are running for long periods.
More generation supplies would come in handy, but state power generators can't be expected to prepare for every extreme, said Kent Saathoff, ERCOT's vice president of system planning and operations.
"You have to determine if it is worth spending millions or billions to avoid a one in 10-year event," Saathoff told reporters on Wednesday.
RECORD BREAKING PRICES
With record-breaking demand came record-breaking prices. Prices for Thursday power topped $400 per megawatt hour, the highest in at least a decade. Friday's power prices approached $600.
Real-time prices also hit the $3,000 market cap over the past few days.
ERCOT has about 73,000 MW of natural gas, coal, oil, nuclear and wind generating facilities, but not all of that capacity is available all the time.
Texas has the most wind power in the country, but the wind does not blow during the summer. Ercot said it got about 2,000 MW from wind during the peak hour on Wednesday. Those wind farms can produce about 9,000 MW when all turbines are spinning.
Moreover, the ERCOT power grid is a virtual island with only a few small transmission links to neighboring electric grids, making it tough for Texas to pull energy from neighboring states in times of need.
Connecting Texas wires to the rest of the U.S. grid would cost at least as much as a state transmission investment program to carry Texas wind supplies to cities like Dallas and Houston, pegged at about $6 billion, Saathoff said.
(Additional reporting by Scott DiSavino in New York, editing by Chris Baltimore; Editing by David Gregorio)
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