The Electric Reliability Council of Texas issued a request to generators not to go offline to perform maintenance this week.
Why? The weather is expected to be cloudy for several days. Clouds cut electricity production from solar farms. The wind is also blowing strong in West Texas. Too much wind is as bad as too little wind.
A spring heat wave in the forecast could increase electricity demand a bit, but not near what Texans would expect to see in late summer. The concern that ERCOT has is not having enough coal, natural gas, and nuclear power plants ready to go during the day and during warm, muggy nights.
ERCOT does not pay these power plants to defer maintenance. The way the ERCOT market design is structured, it pays the owners of these power plants to take them offline as electricity demand peaks.
If the heat wave happens this week, it will likely lead to a windfall for commodities, speculators and a high wholesale price of electricity in ERCOT.
ERCOT had the most expensive wholesale electricity market in the nation last year. Every other grid had lower electricity prices because of much cheaper natural gas prices in 2023.
Yes, Texas produces the most natural gas in the nation. Yes, ERCOT’s electricity price was the only one in the nation to increase in 2023. See the chart below.
