Texas grid seeks more power capacity to avoid winter shortages

(Reuters) -The Electric Reliability Council of Texas (ERCOT) sought bids from power producers on Monday to increase its operating reserves by around 3,000 megawatts in case of any unexpected spikes in demand during the upcoming winter season.

The Texas grid has been concerned about extreme weather since a deadly storm in February 2021 left millions without power for days as ERCOT struggled to prevent a grid collapse after the closure of an unusually large amount of generation.

The request for proposals seeks capacity from both dispatchable generation and demand response solutions to cover the period of December 2023 through February 2024, the Texas power grid operator said, citing the significant peak load growth since last winter and retirements of dispatchable resources.

“Dispatchable resources comprise nuclear, coal, gas, biomass and energy storage,” but not wind and solar, which cannot control output based on ERCOT instructions, it said in an emailed statement.

ERCOT’s market notice said offers from mothballed or decommissioned units could include a more than 10% “Incentive Factor that reflects the revenues the unit owner determines would be necessary to bring the unit back to operation.”

It determined that a winter storm comparable to December 2022’s Elliott would raise the risk of an energy emergency during the peak-demand hour to almost 20%, well above its 10% adequacy standard.

Elliott brought sub-freezing temperatures to about two-thirds of the United States knocking out power for more than 1.5 million homes and businesses.

“ERCOT is not projecting energy emergency conditions this winter season, but we want to be prepared and ensure all available tools are readily available if needed,” ERCOT President and CEO Pablo Vegas said.

ERCOT, which operates the grid for more than 26 million customers, hit an all-time high peak demand of 85,435 MW on Aug. 10 amid a brutal heat wave.

(Reporting by Rahul Paswan and Deep Vakil in Bengaluru; Editing by Stephen Coates & Simon Cameron-Moore)