INSIGHT-Heatwave pushes Texas power grid into red zone

Thu Aug 4, 2011 10:07pm GMT

* ERCOT breaks power usage record three days in a row
    * Demand seen near record level for fourth day Thursday
    * Power prices also reach record levels
 (Adds INSIGHT tag, details on Thursday ERCOT demand)
    By Eileen O'Grady
    HOUSTON, Aug 4 (Reuters) - The Texas power grid operator
has scrambled this week to meet soaring electricity demand in
the face of a brutal heatwave, and residents of the second most
populous U.S. state are one power plant shutdown away from
rolling blackouts.
    Power demand for Electric Reliability Council of Texas,
Inc, or ERCOT, which runs the power grid for most of the state,
hit three consecutive records this week as Texans cranked up
air conditioners to escape one of the hottest summers on
record. Another record was not likely on Thursday, ERCOT said.
    The grid operator on Thursday cut power to some big
industrial users, and businesses and households face a repeat
of the rolling blackouts they suffered in February, when a
bitter cold snap interrupted power supplies. [ID:nN1E7731OE]
    Though ERCOT has done a good job balancing supply and
demand, "You always have to expect the unexpected can happen,"
said Arshad Mansoor, senior vice president at the Electric
Power Research Institute. "A unit can shut. The wind may not
    It's been a year of extreme weather for the Lone Star
State, already suffering from the worst drought on record.
    Ice storms in February crippled dozens of power plants,
forcing ERCOT to impose rolling blackouts for hours as electric
supplies dropped below demand for the juice.
    Now a protracted heatwave with temperatures topping 100
degrees Fahrenheit (37.8 Celsius) for several weeks in a row in
many cities has stretched power supplies to the limit.
    Power usage in ERCOT reached its highest level ever on
Wednesday at 68,294 megawatts, almost 4 percent over last
year's peak.
    The Texas grid faces at least one more day of extreme
stress before temperatures cool a bit over the weekend.
Temperatures in Houston, the state's biggest city, should
return to near normal levels in the upper 90s over the weekend,
according to
    The state's biggest power generators, including units of
Energy Future Holdings, NRG Energy (NRG.N: Quote), Calpine Corp
(CPN.N: Quote) and others, have been running flat out to cash in
real-time prices that have hit the $3,000/MWh cap in recent
    Power demand was not on track to set a record on Thursday,
but increased power-plant outages reduced supply, shrinking
surplus power needed to avoid a widespread grid collapse.
    Between 4,000 and 5,000 megawatts of generation was
unavailable on Thursday, up about 1,000 MW from the previous
day, ERCOT said.
    The state's reserve margins have been running razor thin.
On Wednesday ERCOT came within 50 megawatts of interrupting
flows to industrial customers. That's equal to the output of
about 25 industrial-scale windmills.
    One megawatt powers about 200 homes in Texas during hot
weather when air conditioners are running for long periods.
    More generation supplies would come in handy, but state
power generators can't be expected to prepare for every
extreme, said Kent Saathoff, ERCOT's vice president of system
planning and operations.
    "You have to determine if it is worth spending millions or
billions to avoid a one in 10-year event," Saathoff told
reporters on Wednesday.
    With record demand came record-breaking prices. Prices for
Thursday power topped $400 per megawatt hour, the highest in at
least a decade. Friday's power prices approached $600.
    Real-time prices also hit the $3,000 market cap over the
past few days.
    ERCOT has about 73,000 MW of natural gas, coal, oil,
nuclear and wind generating facilities, but not all of that
capacity is available all the time.
    Texas has the most wind power in the country, but the wind
does not blow during the summer. ERCOT said it got about 2,000
MW from wind during the peak hour on Wednesday. Those wind
farms can produce about 9,000 MW when all turbines are
    Moreover, the ERCOT power grid is a virtual island with
only a few small transmission links to neighboring electric
grids, making it tough for Texas to pull energy from
neighboring states in times of need.
    Connecting Texas wires to the rest of the U.S. grid would
cost at least as much as a state transmission investment
program to carry Texas wind supplies to cities such as Dallas
and Houston, pegged at about $6 billion, Saathoff said.
 (Additional reporting by Scott DiSavino in New York; Editing
by Chris Baltimore and David Gregorio)
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