The Gibbons Creek Generating Station in Central Texas will not operate this summer, as reported here by the Houston Chronicle. The plant’s closure represents a loss of 470 megawatts of power. The closure will severely impact the amount of reserve power available to handle demand surges during the hot summer months, leaving the state with just a 7.4 percent margin instead of ERCOT’s goal of 13.7 percent.
Wholesale power prices were 14 to 60 percent higher in 2018 than in 2017, according to a report released by the U.S. Energy Information Administration (EIA). The exact amount of increase depended upon the region, with the ERCOT electricity market in Texas reflecting the highest increase in power prices.
Over the years, Texas’ deregulated electricity system has proven to be a state treasure, helping Texans enjoy some of the nation’s lowest wholesale rates and an established record of reliability. However, the state’s ongoing, extensive growth has expanded our appetite for electricity, and underscored the importance of ensuring that we have enough during times of highest usage, usually during the summer or winter months.
The oil giant’s big bet on Permian renewables shows how the economics of the electricity market are changing. As stories about the energy transition go, Big Oil going big on solar power in the heart of America’s biggest oil patch is as transitiony as it gets. Besides the symbolism of Exxon Mobil Corp. signing up for 250 megawatts of solar power (plus the same amount of wind power) in the Permian basin, though, it is also part of a big change gathering momentum in the country’s biggest electricity market: Texas.
Higher-than-expected demand for electricity coupled with cancellations of planned power generation projects will leave less room for error in the coming summer, according to the manager of the state’s power grid. The Electric Reliability Council of Texas is forecasting next summer’s reserve margin for electricity, an important measure of the cushion between expected supply and demand, will be 8.1 percent, 2.9 percent lower than ERCOT predicted back in May.