Solutions for the Texas Energy Shortage

598 views

Published on

Ron Seidel, PE, principal at RBS Energy Consulting and Principal Solar, Inc. board member will discuss and answer questions about his recent whitepaper, "Solutions for the Texas Energy Shortage."



Ron's whitepaper is very timely because in the summer of 2011, Texas experienced extremely low reserve margin periods throughout the state... causing average wholesale electricity prices to skyrocket to more than twice their normal level. Given that Texas is expected to add another 14 million to its population between 2010 and 2030, these shortages raise alarms about the state's ability to meet future energy demand. Success will depend upon finding the most effective way to incent the development of more capacity.



Unlike many other states, Texas has had a competitive retail market for electricity since 2001, replacing the traditional cost of a service-based regulated market. The market requires customers to choose a competitive electricity supplier and allows retail suppliers to set their prices without regulatory interference. However, regulatory action has resulted in caps being placed on system-wide wholesale power prices with the intent of protecting consumers. It is these system-wide offer caps that have limited prices, reduced potential profitability for wholesalers and restrained the development of new generation.



Download the complete whitepaper at www.principalsolarinstitute.org/documents.

Published in: Technology, Business
  • Be the first to comment

  • Be the first to like this

Solutions for the Texas Energy Shortage

  1. 1. Principal Solar Institute Solutions for the Texas Energy Shortage Ron Seidel Director, Principal Solar Ron Seidel is principal of RBS Energy Consulting, working with private equity, investment banks, and government on electric energy issues primarily in the ERCOT market. Previously, he was president of Texas Independent Energy, senior vice president of Energy Supply at City Public Service of San Antonio, and an executive at TXU where he was senior vice president of Fossil Generation and Mining, president of TXU Energy Trading, and operations manager at the Comanche Peak Nuclear Plant.
  2. 2. The ERCOT System Source: ERCOT
  3. 3. ERCOT Facts & Figures200,000 Square Miles40,500 miles of Transmission (2010)73,492 MW Peak Capacity10,035 MW of wind generation68,294 MW Peak Load (2011)13.75% Target Reserve Margin2011 Peak Reserve Margin 7.6%4 DC Ties, 1100 MW (to Mexico and SPP)Stand alone system about the size of the UK Source: ERCOT
  4. 4. ERCOT Capacity and Energy Installed Capacity Hydro, Energy Produced Wind Hydro, 2011 biomass, 2011 8% biomass, other other 1% Nuclear 1% Wind Nuclear 12% 13% 7% Natural Gas 40% Natural Gas Coal 56% Coal 23% 39% 68,251 Megawatts 335,000 Gigawatt-hours Source: ERCOT
  5. 5. ERCOT Load GrowthERCOT Average Load Growth 2013 – 2022 is 2% or 1,400 MW per yearEquivalent to – One large nuclear plant each year – Two large coal plants each year – Three combined cycle gas plants each year Sources: ERCOT , RBS Energy Consulting
  6. 6. ERCOT Reserve Margins May 2012 Report 16 14 12 10 Target =13.75% 8% 6 4 2 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 -2 Source: ERCOT
  7. 7. Why is there a potential shortage?Low natural gas prices reduce financial viability for new resourcesPower prices have been arbitrarily capped, conflicting with the design of the energy only marketElectricity demand growth in Texas is robust, creating the need for new capacity What is being done about it??.....
  8. 8. The Brattle Group Report – PUCTOptionsEnergy only with market-based reserve marginEnergy only with adders to support a target reserve marginEnergy only with backstop procurement at minimum acceptable reliabilityMandatory resource adequacy requirement for load serving entitiesResource adequacy requirement with a centralized forward capacity market Source: The Brattle Group
  9. 9. Where Do We Go From Here?PUCT Workshops / Deliberations / RulemakingsNo real issue until 2014/2015 with mothballed units in service and with normal summers2013 Legislature may address the resource adequacy issueMy opinion: A capacity market in some form is inevitable – an energy market will require patience We could go here…….
  10. 10. U.S. & Texas Solar Intensity Source: NREL
  11. 11. Utility Scale PV PotentialUrban areas U.S Total: 1,218 GW 2,231,694 GWhrs 25,369 km2 Texas: 154 GW 294,684 GWhrs 3,214 km2 (<1%) Source: NREL
  12. 12. Utility Scale PV PotentialRural areas U.S Total: 152,974 GW 280,613,217 GWhrs 3,186,955 km2 Texas: 20,411 GW 38,993,582 GWhrs 425,230 km2 (61%) Source: NREL
  13. 13. Rooftop PV Potential U.S Total: 664 GW 818,733 GWhrs Texas: 60 GW 68,717 GWhrs Source: NREL
  14. 14. Achievable Solar PV Energyin TexasReference: ERCOT Maximum Load ~68 GWUrban PV = 154 GW (13% of U.S. Total)Rural PV = 20,000 GW (14% of U.S. Total)Rooftop PV = 60 GW (10% of U.S. Total)Achieving just 1% of this capability would produce over 200 GW or almost three times the current ERCOT maximum load. Sources: NREL, RBS Energy Consulting
  15. 15. Solar Synergy with Load 70000 12000 60000 10000System Load (MW) 50000 Generation (MW) 8000 40000 6000 30000 4000 20000 10000 2000 0 0 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 Hour System Load Wind Generation Solar Generation Source: RBS Energy Consulting
  16. 16. Capacity ValueThe portion of capacity that can be counted on for reliability purposesConventional resources - 100% – nuclear, coal, natural gasWind - 5% to 40% – 8.7% in ERCOT due to uncontrollability and intermittencySolar PV – 25% to 75% – Synergy with load Sources: NREL. ERCOT
  17. 17. The Brattle Group Report forThe Solar Energy Industries AssociationElectricity Cost and Emissions Savings with the addition of various amounts of solar PV in 2011Solar PV CO2 Avoided Energy Cost Benefit MW (tons) ($)1000 323,000 167,900,0002500 811,000 348,400,0005000 1,612,000 520,300,000 Source: The Brattle Group
  18. 18. Summary ERCOT needs new capacity Currently over 10,600 MW of wind is in operation Only about 75 MW of utility scale solar PV operating – Between 60 MW and 480 MW in the pipeline Texas leads the nation in solar PV capability Solar PV has a higher capacity value than wind and is synergistic with load While solar PV will not displace wind or conventional generation completely, shouldn’t it be a significant part of the energy equation for Texas and the nation??
  19. 19. Questions and Discussion Please enter your questions into the Chat window Ron Seidel Director, Principal Solar

×