Texas Grid Operator Cancels Plans to Add New Capacity For Winter Reliability Due to Limited Market Response

The Electric Reliability Council of Texas (ERCOT) has canceled a procurement from a request for proposals for additional generating capacity this winter due to limited market response. The grid operator received only 11.1 megawatts of potentially eligible capacity, while it sought to procure up to 3 gigawatts of additional capacity that could be called upon if needed during peak times.

ERCOT, the grid operator which manages about 90 percent of the state’s electric load, planned to procure additional capacity based on an analysis indicating that if the region experienced a severe storm during the 2023-2024 winter peak load season similar to to last year’s Winter Storm Elliott, there would be a 20 percent risk of entering emergency energy conditions.

In deciding to cancel the RFP, the grid operator considered factors such as program costs, including costs of administration, increased complexity for control room operators against the small amount of capacity and associated minimal reliability benefits.

ERCOT said it firmly believes that there is immense potential in boosting demand response capabilities across industrial, commercial, and residential customer classes and envisions peak reduction during critical times to be an effective tool in its portfolio of reliability solutions. The grid operator plans work with the Public Utility Commission of Texas and stakeholders to explore incentives and product designs.

Further, the grid operator listed its winter preparedness and grid enhancements since 2021. This winter marks the third season of winter weatherization inspections for ERCOT with enhanced requirements for generation and transmission facilities, compared to last year. Other efforts for winter preparedness and grid improvements include firm fuel supply service, scheduled maintenance period, forecasting improvements, and critical supply chain and infrastructure map.