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ERCOT Cancels Winter Capacity RFP, Reports Amount Of Offers
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ERCOT has canceled the procurement from the Request for Proposal (RFP) seeking additional capacity for the winter, "due to the limited response from the market, which included only a small 11.1 MW of potentially eligible capacity."
More specifically, ERCOT said in a PUC Filing that, "ERCOT received offers from three entities totaling 30.6 megawatts (MW). However, after initial evaluation, ERCOT determined that only 11.1 MW of Demand response was potentially qualified, subject to further validation of Demand response eligibility as described in the Winter 2023-24 Contracts for Capacity Governing Document."
"Due to the limited amount of capacity, ERCOT is canceling the RFP today and will not move forward with the proposed procurement. In making this decision, ERCOT weighed factors such as the costs of the program, including costs of administration, and the incremental additional complexity for the Control Room operators against the very small amount of capacity that could be provided and the associated minimal reliability benefits," ERCOT said
"[T]hrough the RFP, ERCOT was seeking to procure up to 3,000 MW of capacity for the Winter Peak Load Season; probabilistic analysis showed that amount of procurement would have resulted in an approximate 10.43% reduction of risk of entering an Energy Emergency Alert during the Hour Ending 8:00 AM, the highest-risk hour of the season. In comparison, if all the potentially qualified capacity offered were procured, there would be less than a 0.05% risk reduction during the highest-risk hour," ERCOT said
"The request for additional capacity was an extra layer of precaution to mitigate higher risk during extreme weather this winter," said ERCOT President and CEO Pablo Vegas. "ERCOT is not projecting emergency conditions this winter and expects to have adequate resources to meet demand."
ERCOT said, "Additionally, regardless of the market response today, ERCOT firmly believes that there remains tremendous potential in expanding demand response capabilities throughout the industrial, commercial, and residential customer classes, and looks forward to working with the Public Utility Commission of Texas (PUCT) and stakeholders to explore what incentives and product designs may work better in the future. Reducing peak demand at critical times can be an effective tool in an overall portfolio of reliability solutions."
"We’ll take these lessons and continue to work with the PUCT and the market to evaluate other types of demand response products that could contribute meaningfully to electric reliability in the future. In the interim, ERCOT will continue to advance its winter preparedness through the many reliability programs and tools we have available," said Vegas
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November 17, 2023
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Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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