Michele Richmond, executive director for Texas Competitive Power Advocates, said her members are uneasy as summer arrives following a session by the Electric Reliability Council of Texas board of directors.
The ERCOT board of directors voted on April 28 to approve NPRR 1108, “ERCOT Shall Approve or Deny All Resource Outage Requests,” despite opposition from stakeholders.
Previously, generation outage requests submitted within 45 days or less of the actual outage required ERCOT approval. NPRR 1108 will now require all requests to be approved regardless of a timeline, making planned outages more restrictive.
Richmond told Austin Journal that this decision has been met with serious apprehension.
“TCPA is concerned that generators will not be afforded the needed time to conduct these planned outages which may result in a greater number of forced outages,” she said. “The stated intent for the change in outage scheduling was to increase reliability through greater visibility into how many megawatts are on outage at any given time. However, the potential for increased forced outages, such as some of those that occurred on May 13, actually reduces visibility and ultimately reliability because they are outages that were unplanned.
“Just as any Texan wants to make sure their required car maintenance is conducted at the appropriate time to avoid their car breaking down on the road, generators want to take the needed planned outages to ensure these complex machines are running at their best performance, particularly when we need them during extreme heat or cold,” Richmond said.
TCPA includes 11 companies representing more than 52,000 megawatts of generating capacity in ERCOT and approximately 90% of the non-wind generation.
“While we are awaiting a decision from the ERCOT board on the methodology that will ultimately be used to determine how many outages will be allowed, the lack of any floor in allowed outages continues to raise concerns for generators,” Richmond told Austin Journal. “Stakeholders made recommendations to improve the methodology and that will be presented to the board, along with the methodology recommended by ERCOT staff.”
Richmond said there is legitimate reason for apprehension, since the ERCOT fleet — particularly the thermal dispatchable resources — is being run harder and more frequently than ever before. That increases the need for planned outages and accelerates the triggering of manufacturer-required maintenance.
With intense summer heat forecast for at least two weeks, ERCOT released a statement that it expects to have “sufficient generation to meet forecasted demand.”
ERCOT estimates the peak demand to hit 77,317 megawatts, but reported in May that it has more than 91,000 megawatts.
“The ERCOT region is expected to have sufficient installed generating capacity to serve peak demands in the upcoming summer season, June-September 2022, under normal system conditions and most of the reserve capacity risk scenarios examined,” according to the report. “This SARA report includes seven risk scenarios reflecting alternative assumptions for peak demand, unplanned thermal outages and renewable generation output. The summer capacity planning reserve margin is forecasted at 22.8%, after accounting for forecasted customer demand, emergency demand reduction programs, typical unplanned outages and typical renewable output.”
However, University of Houston Energy Fellow Ed Hirs said he is not convinced, because the grid operator undercounts the total number of consumers in the state.
“Since 2010, the Texas economy has grown from 1.25 trillion to 1.99 trillion last year,” Hirs told KXXV-TV. “The amount of natural gas, coal and nuclear generation on the ERCOT grid has actually shrunk during that time.”
Neil McAndrews, an Austin, Texas-based energy market consultant, said he was not surprise that the ERCOT board endorsed this staff proposal. It will, McAndrews said, “cost more and lower reliability by increasing forced outages.” He said the impact could be detrimental.
“A small understanding of the issues often results in a poor outcome,” McAndrews said in an April 29 email. “The ERCOT BOD did not understand that the command-and-control limits proposed by ERCOT flies in the face of aging generation units with increasing failure rates. They voted for limiting planned outages to some abstract number that is theoretical and not based on the risk in the supply of generation … Government intervention at its most meddlesome.”
Richmond told Austin Journal that many of the state’s thermal generators have been in service for decades and as generators age, just like a car, maintenance needs occur more frequently and are more comprehensive.
“It’s important to future reliability that these resources be able to take planned outages to prevent more catastrophic issues that could make it uneconomic to continue to operate the plant,” Richmond said. “To go back to the car analogy, an oil change and scheduled tune-up is a lot cheaper than an engine replacement.”