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What’s Really Wrong With ERCOT?

Since early 2020, ERCOT has experienced tremendous load growth. From 2019 to 2021, the number of 4CP days grew approximately 4%, and reached 11% in 2022.

During this time, Off-Peak load growth, which is likely coming from datacenters, has outpaced On-Peak load growth.

During the COVID-19 pandemic, lockdowns kept people in their homes. This required people to work and attend school from home, which accelerated e-commerce and online entertainment, necessitating new datacenter growth. This growth is helping drive up demand for electricity, with data processing services, internet and information centers. As you can see in Chart 2 below, these have grown from 20%-30% since 2020, putting enormous pressure on the power grid. 

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Texas also saw the largest population growth in the country from 2010-2020. This trend continued in 2021 and preliminary data indicates it continued into 2022. This growth is also driving up demand for electricity.

Hot ERCOT 2022 Summer

Strong load growth combined with this summer’s sweltering temperatures shattered all time load records in ERCOT on multiple days. Let’s look at how the 2022 summer’s let’s 4CP temperatures this compared to 2011, which was considered one of the hottest summers of the early 21st century.  As you can see below, 2011 was slightly hotter.

However, there is no comparison when it comes to peak load on 4CP days in 2011 and 2022. The load growth is phenomenal.

If you look at the daily peak load graphs below, almost all peak load days from June through September 2022 are records. While 2011 had hotter temperatures, load was much lower.

As ERCOT’s load grows, we will need to continue to build new resources to cover this increasing load. This needs to include not only renewable resources and battery storage, but also thermal resources to provide flexibility during low renewable events, which happen during heat waves (low wind generation) and evenings (when solar generation is ramping down).

Enverus continually monitors load growth and how it impacts the market, and provides daily and bi-weekly analysis. If you are interested in viewing our power analytics publications, please contact us at businessdevelopment@enverus.com.The post What’s Really Wrong With ERCOT? first appeared on Enverus.
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