Conference Coverage Electric Reliability Council of Texas (ERCOT) Energy Market Energy Storage ERCOT Infocast ERCOT Market Summit Latest Major Issues Markets Operating Reserves Production Tax Credit (PTC) Renewable Power reserve margins Resources RTOs-ISOs Solar Power Special Reports & Commentary Wind Power

Infocast ERCOT Market Summit

Infocast ERCOT Market Summit

Audio system Anticipate Robust Market Improvement This Summer time

AUSTIN, Texas – Infocast's annual ERCOT market assembly final week attracted more than 150 political decision-makers with utility, solar, wind and different power managers to explore attainable options and alternatives in Texas. ] The members of the Infocast 2019 ERCOT market meeting will take heed to the panel discussion. | © RTO Insider

Individuals took part in discussions on the expected improve in solar capacity and lived with ERCOT's declining reserve margin, power storage benefits, and market transfer wants. | © RTO Insider

Resmi Surendran, Shell Power's chief regulatory officer for North America, introduced a three-day event saying that rising curves mirror the increased danger of ERCOT this summer time. The community operator's reserve margin has fallen to 7.4%, reflecting the shortage of latest base-line will increase and the loss of a new getting older coal-fired energy plant. (See ERCOT tells us about emergency conditions this summer time "Probable".)

When 2019 ahead is $ 50 / MWh under 2018, Surendran stated: "It may be doubtful because so much wind is coming, or the possibility of much demand response or ORDC [operating reserve demand curve] or just waiting for [March 5 seasonal resource assessment] to come out and how tough in the summer. , he said. We believe that the market works in the way it was supposed to be done, he said. When you have the financial risk of last summer, it really motivates people. I think you will also see that this summer and people should start adjusting their expectations. ”

Katie Coleman by Thompson & Knight © RTO Insider

Coleman said that "empirical proof" revealed customers "did issues they hadn't completed earlier than" last summer to reduce their load and help the market respond to demand. "There’s a misconception that the low margin margin corresponds to larger real-time costs," he said. "Preventing failures will see good results again this summer time, and you may even see or see excessive prices in real time."

Citibank's Hugh Byrd | © RTO Insider

“We are only going to continue the constant price fluctuations around the wind due to the construction of renewable energy sources,” stated Hugh Byrd, Managing Director of Citibank at ERCOT / West. "We get to the point the place we’d like virtually renewable power to satisfy peak demand, which will increase the volatility of costs."

"The prevalence of wind has had an influence on pricing where it is troublesome for a educated era to remain lively on this market," said John Dumas, Colorado River Regional Authority, Market Manager.

John Dumas of the LCRA © RTO Insider

Dumas said that the changes in the ORDC calculation by the Texas General Interest Committee would increase scarcity faster than pricing, but he doubted that the changes would have a "dramatic effect" on the commitments made in the summer. (See Texas PUC reacts to the margin of the shrinkage reserve.)

”[They’re] is not enough to combine the cycle [plant]. However, they're going to be online, Dumas said. "Probably you may do some fuel turbines earlier."

"We're shifting away from a world the place you possibly can rely each megawatt," Coleman said. "You need to rely available on the market."

Panel Discussions ERCOT Competition Market

Bill Barnes, Head of Regulatory Affairs at NRG Energy, also urged participants to trust the ERCOT market. Saying he didn't want to reflect on the market's shrinking margin, he trained to focus on what he called a "success story".

"The ERCOT market is certainly envious of the remainder of the world and the world," Barnes stated. “It should be no surprise that we have low reserve margins. We have had six or seven years of low pricing; Pricing drives exit and investment waves. We have seen some investments financed by subsidies [the Competitive Renewable Energy Zones] and exits due to the same subsidies and some low natural gas prices. When you have low prices for such a long time, you have financial discipline.

“It is time for the market to support the next wave of investment in our energy supply and not to be tempted to intervene outside the market or support. [Low reserve margins] shouldn't be a surprise. We have known for years … only an energy-using structure that does not have a capacity structure always leads to smaller reserve limits. ”

Calpine Brandon Whittle | © RTO Insider

Calpine Overseas Minister Brandon Whittle against level out that a aggressive electrical energy market "is just not an entire aggressive market that we are learning in ECON 101, where all the things was affordable."

The entire competition market is a minor obstacle to entry and exit, ”Whittle stated. In the case of ERCOT, he stated that this may be the start-up prices of the models, which would turn into submerged when the unit is on-line.

“We need the generation to be sent online. For that, they have to overcome the obstacle, Whittle said. “The margin will remain uncomfortably low in the coming years, depending on new entrants. There are considerable costs in building new generators that are so significant that cost recovery will take decades. "

Meanwhile, Barnes said that this summer the likelihood of an emergency is" quite high … probably 90 percent ish, "and that the market should be prepared.

“This is how the energy market is supposed to work. That way, you can increase your income to encourage the next investment wave, he said. “These events can be well-managed and organized and have very little disruption to consumers. We are going to get a good idea of ​​what we want for a true reliability risk. We lived it a bit in 2011, but it was a weather phenomenon. This is more a lack of supply. ”

ERCOT COO Cheryl Mele, who sat subsequent to Barnes, stated:“ We look forward to working efficiently. "

One member of the public pointed out Barnes's only downside is that

" Hopefully ERCOT will help manage all emergency situations and explain that voluntary load reduction is not necessarily a bad thing, "Barnes told RTO Insider in response to a network operator reference

Bill Bill Barnes and ERCOT Cheryl Mele | © RTO Insider

Wind Developers: The PTC Has Served Its Purpose

The Triangle of Wind Power Developers agreed that production tax credits are time and place that will end in 2020. 31.12. As they approach quickly, they discussed what to expect in the post-PTC world.

“We have had a love-hate relationship with PTC,” stated Dr. International Power's Tom Carbone, who expects 25 GW of wind power to be online in Texas by 2020. “Today, even without PTC, [wind] is a very competitive solution. It has also created a slightly distorted market with negative pricing. I'm probably one of the only guy in the room, which is expected when the PTC is gone. ”

” A minimum of two of us get moist in the nationwide market. We see how they cope with the best way they need to be post-PTC, Ward Marshall of Pattern Power, stated. ”[PTCs] have been essential. It smoothed the enjoying subject. It is a nice story from this viewpoint, however I consider they are a huge demise. I feel it's a ache once we work on the opposite aspect. ”

The PTC was initially accredited in 1992 with an inflation restrict of 1.9 cents per kilowatt-hour of electrical energy generated by qualified installations. Credit score has fallen by 60% for farms beginning this yr.

"We aren’t afraid of the post-PTC world," Thomas Houle of Macquarie Capital stated. “They served their purpose and fairly well, but we now have cheaper long-term debt. It is amazing how quickly the market adapts to these changes. We are waiting for nine to twelve months of dip, but we see what happens. ”

Dr. International Power's Tom Carbone (left) And Sample Improvement's Ward Marshall is having fun with the wind power panel. | © RTO Insider

A promising marketplace for solar power

Please describe the distinction between ERCOT and the SPP solar market. Recurrent Power Jacob Steubing used his firm 's inner analogy

Jacob Steubing of Recurrent Power | © RTO Insider

“If you want to go to a market where they do not need additional capacity, SPP is your market,” stated Steubing, Director of Corporate Creation and Structure, displaying RTO's 30% reservation margin. “ERCOT has a low reserve margin. SPP is the opposite end of the spectrum. … If you are trying to sell in Texas, you are selling to people who do not have a car. In SPP, you talk to people who have three Honda 2001 agreements. Maybe they'll talk to you when one of them breaks down. You are not going to look for highly motivated buyers in SPP.

As Steubing spoke, Enel Green Power North America announced a 497 megawatt solar project in West Texas, the largest in the state. Before the day of food distribution heavy Sysco said three sun gardens in Houston and Dallas. They are part of a 25 MW 10-year renewable energy agreement with a NRG subsidiary.

ERCOT has over 43 GW solar projects in its interconnection queue, but only 5 GW has interconnection agreements. SPP has 26 GW of sunbathing, one by number

Brian Whitlatch by AEP | © RTO Insider

“Natural resources, the sun, are fantastic in Texas. We have to start there, ”stated Brian Whitlatch, Managing Director of Power Advertising at AEP Power Partners. “The ERCOT market is one of the best performing RTO markets, making it a highly efficient market and deregulation, so there are many retail and wholesale buyers.”

Marc-Alain Behar, Managing Director of ENGIE Photo voltaic, stated that The liquidity of the Texas market and its "refined wholesale surroundings … enable economic innovation around business buildings."

Marc-Alain Behar of ENGIE | © RTO Insider

“The first utility-based solar project with protection takes place in Texas,” Behar stated. “What is the new demand for virtual demand [power purchase agreements]which started three or four years ago and which was mostly wind driven. Last year we got the sun to take part in this market. Here in Texas, we see that the price of solar energy offered to these customers with 12 years, 15 years of PPA is competitive with the wind. I see this going on a lot because the demand for corporate customers still exists. ”

” We've been taking a look at Texas for some time. We thought it will be a tipping level, and I feel we saw it last yr, Steubing stated. “There were a lot of events that took place in 2019, in the Victoria area, outside Houston, and in the larger area of ​​Dallas. It is really exciting to see how the sun has been able to escape the wind and build it outside the West. ”

Is there a storage location in ERCOT?

If they’re powered by photo voltaic and wind power

John Corridor, Government Vice President, Clear Power of the Environmental Safety Fund, is engaged on a broad plan to extend wind, photo voltaic, power effectivity and DR use. Texas. He believes that the aggressive market plays a main position in delivering the state's clean power results.

”ERCOT estimates that Texas might reach 40-50% wind and solar capability over the subsequent 10 years, Hall stated. “Storage is that this level of non-emitting capacity is not only possible, but practical. Its ability to handle interference problems and ensure network reliability is the key to unlocking the potential of these energy sources. ”

Tom Kleckner curbs a panel coping with the consequences of carbon retirement on ERCOT. Among the many panels are (from left to proper) David Bellman of Skylar Capital Administration, Julia Rathgeber of Texas Electricity Corporations, Bob Helton of ENGIE and Randa Stephenson of the Lower Colorado River. | © RTO Insider

Market Realities Are Also, Steubing and Behar stated

Steubing stated that recurring has made a solar / warehouse product in California with a 180 MW battery. However he pointed out that California has a stockholding authorization and neighboring nations have a capacity market that can use sun and storage.

”I'm not saying there's no worth for storage, however not once we've seen clients motivated in nations where they’re required for capability and power,” he stated.

“There is good complementarity between the sun and the wind, which makes the storage application more difficult. You can buy a cheap breeze and cheap sun when you need it, ”Behar stated. "ERCOT is just not the place we see [energy storage] on the occasion."

– Tom Kleckner