In homes and boardrooms across the country, individuals and organizations are reviewing the year’s dealings in the hope of gleaning some lessons and preparing for the year to come.  In Texas, the Electric Reliability Council of Texas (ERCOT) is reviewing a year of extreme weather and unforeseen loads, and looking at a future constrained by EPA regulations, but one that offers an expanding menu of innovative technologies. 

Whether or not you attribute it to climate change, in 2011 extreme weather proved to be a formidable variable for the Texas market.  Perhaps it would have been manageable if the state’s electricity providers only experienced one major event.  Unfortunately, the extreme weather was responsible for significant swings in power consumption.  New peak demand records were set in the summer months, and the largest unforeseen load increases were caused by weather, not by economic circumstances.  The good news is, on its one year anniversary, the ERCOT nodal market (which uses a grid of local power nodes, rather than a zone- or region-based system) is operationally efficient and effective.  The bad news: the transition to a nodal market is much easier to account for than the weather.  In 2012, ERCOT will be challenged to manage potential supply and demand issues that are tied to increasingly unpredictable variables, namely record weather events. 

ERCOT can claim some pretty impressive milestones from the year 2011 as well.  The independent system operator (ISO) set a record for the largest wind power contribution in October 2011; 7,400 MW of wind resources supplied 15.2% of ERCOT’s total load.  This is an important milestone for the nodal market design, which is proving well-equipped to handle some of the difficulties associated with renewables integration, and it is also a milestone for the broader wind industry.  Wind power comes with inherent obstacles, namely the potential for instantaneous swings in generation, in either direction, that can make forecasting generation and balancing the grid fiendishly complex.  ERCOT’s 2011 load forecast was 240.2 terawatt-hours (TWh), but the actual load turned out to be 9% higher, at 262.8 TWh.  Given the high penetration of wind energy in Texas, ERCOT is likely going to need better forecasting tools and additional resources that will help balance supply, demand, and grid reliability. 

Looking forward, ERCOT pointed out that power reserves have declined by about 5% for 2012 and 2013. One-fifth of that is due to increased load, and the rest comes from decreased generation.  That drop will drive ERCOT to consider innovative approaches to balancing supply, demand, and grid reliability.  Demand response is already a significant resource in ERCOT’s portfolio, and there is about 160-250 MW of DR that could be activated in 2012.  At the more progressive end of the technology spectrum, vehicle-to-grid technologies may become the newest addition to the ERCOT portfolio.  In September 2011, NRG Energy, Inc. and the University of Delaware launched a joint venture called eV2g, developed to use distributed battery storage in fleet EVs to provide ancillary services to the grid. 

ERCOT’s electricity load is forecast to grow by 2.5% over the next 10 years, and peak demand is expected to grow at a more rapid pace.  With the nodal market in place, and the continued commitment to a diversified portfolio, ERCOT is in a good place to meet growing demand in innovative ways.  Predicting the weather in Texas is another matter.