Commodity
Central states of the United States, including Texas, are at risk of power outages due to a heat wave
24 Aug 2023
5 minutes

On Thursday, two electric grids in the United States might struggle to satisfy demand and required reserves as the scorching heat wave envelops Texas and other Central states, leading households and businesses to crank up air conditioners.


The Electric Reliability Council of Texas (ERCOT), responsible for serving over 26 million customers, has anticipated a shortage in reserve capacity for Thursday without any available market solution. This situation raises the potential for an Energy Emergency Alert event.


Reserve capacity in power grids ensures system reliability in the event of unexpected power plant or transmission failures. When a grid lacks resources to meet both demand and required reserves, emergency measures can be taken to curtail usage and boost supplies. These measures involve importing power from other regions, urging energy conservation, and, as a last resort, implementing controlled, rotating outages to avert uncontrolled blackouts.


Texans remain concerned about extreme weather after a lethal storm in February 2021 left millions without power, water, and heat for days, and ERCOT struggled to prevent a grid collapse.


Weather forecasts from AccuWeather predict temperatures in Houston, Texas' largest city, to soar to 107°F (41.7°C) on Thursday, surpassing the typical high of 94°F for this time of year.


ERCOT's projection for Thursday's demand is 85,296 megawatts (MW), slightly below the record of 85,435 MW set on August 10. Although demand might not break records, ERCOT expects reserves to fall short due to the potential unavailability of some power plants on Thursday.


Unlike other U.S. grids that can import thousands of megawatts from neighboring areas, ERCOT relies heavily on its own power generation, given its limited connections with adjacent systems.


Day-ahead prices at the ERCOT North Hub, encompassing Dallas, surged to $925 per megawatt-hour for Thursday, a significant increase from $255 for Wednesday. This stands in contrast to the average of $75 this year, $78 in 2022, and a five-year (2018-2022) average of $66.

Source: https://www.investing.com/news/commodities-news/us-central-states-texas-in-danger-of-power-shortages-in-heat-wave-3160852
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