A warning regarding a potential power emergency was released by a Texas’s grid operator. It is extreme heat that sends electricity demand and prices rise steeply to record levels.
Temperature in Dallas is approaching 100 degrees Fahrenheit (38 Celsius), the Electric Reliability Council of Texas warned that it was increasingly likely the electricity system could experience shortages.
An outlook may prompt regulators to ease environmental limits and permit generators to run at maximum capacity.
The region’s power supply cushion has declined close to 2,500 megawatts, less than 5% of total demand on the system.
Wholesale electricity prices rose by as much as 21,147% to $3,848.69 a megawatt-hour across the Texas grid.
On Monday, they soared 36,000% to average as much as $6,537.45 a megawatt-hour across the Texas power grid.
In all of America’s major markets, the Lone Star State turned into the most luxurious place to buy power.
A power analyst at energy data provider Genscape, Flannan Hehir said, “prices could hit the ceiling” at $9,000 a megawatt-hour “we’re already a bit tighter than we were at this point yesterday.”
Meanwhile, the worst of the heat has yet to come.
Forecasts for temperatures are estimated to reach 103 degrees in Dallas Tuesday afternoon before cooling off. The mix of heat and humidity will make temperatures feel closer to 112.
The National Weather Service has distributed a heat advisory until 8 p.m. local time.
An analyst covering U.S. power markets, Brian Bartholomew said, “power demand is growing faster in Texas than anywhere else in the U.S.”
The unprecedented market rally focuses on how volatile the Texas power market has become as coal-fired power plants.
Cheap and Renewable Energy Sources
The markets have seen profits enfolded by inexpensive natural gas and renewable energy resources.
Warnings were given by Texas’s grid operator for months that plant retirements and increasing electricity demand has left it with slim supply margins.
The chief data analyst for commodities broker at OTC Global Holdings, Campbell Faulkner, said, “We are seeing the coal fleet retirement hasn’t been replaced with a lot of large gas plants.”
In addition, “We are changing the generation mix and that is what this is caused by.”
According to Ercot, after people blasted their air conditioners on Monday afternoon, electricity demand hit an all-time high of 74,531 megawatts and was already totaling 73,405 megawatts on Tuesday.
More than 75,000 megawatts may be peaked by Demand.
In a statement, Ercot said, “Extreme heat across the Ercot region will continue to result in high loads,” he also added, “We may set another new record today.”
Meanwhile, a grid data compiled by news reports displayed, wind power generation in the region has plunged for three straight days.
- Trading Instrument