Scott DiSavino
(Reuters) – Electricity prices in Texas soared on Friday and power demand is expected to break a May record for the second time this week ahead of the long Memorial Day weekend in the U.S., when homes and businesses crank up their air conditioners to avoid heat wave.
The Electric Reliability Council of Texas (ERCOT), which operates most of the state’s power grid for 27 million customers, said the system was operating normally and there was enough power on hand to meet expected demand next week.
On the spot market, next-day electricity prices at ERCOT’s North Hub, which includes Dallas, soared to a two-week high of $141 per megawatt-hour (MWh) on Friday, up from $21 on Thursday, according to spot market pricing data . LSEG terminal.
This compares to an average of $31 per MWh this year, $80 in 2023 and $66 over the previous five years (2018-2022).
Meanwhile, day-ahead prices on ERCOT’s website soared to $654 per MWh for one hour Friday night.
“Real-time prices from May to date are 50% higher than any year since 2010 (except for the price spike in 2022). This results in more inefficient natural gas generators using more gas…to keep the lights on.” “- says the message of analysts of the consulting company EBW Analytics Group.
ERCOT forecasts power demand will peak at 75,118 megawatts (MW) on Friday and 76,493 MW on Memorial Day Monday, surpassing the current May record of 72,261 MW set last Monday.
The maximum grid capacity was 85,508 MW on August 10, 2023.
Analysts expect ERCOT’s power consumption to surpass that all-time high this summer as the economy and population grow in Texas, as well as rapid growth in electricity demand from data centers, artificial intelligence and cryptocurrency mining.
One megawatt can typically power about 800 homes on a normal day, but only 250 on a hot summer day in Texas.
NEAREST RECORD WARMTH
According to meteorologists from AccuWeather.
The normal high in Houston this time of year is 88 F (31 C).
AccuWeather said the forecast high of 94 F (34 C) for Friday is on pace to match the day’s record of 95 F (35 C) set in 1955.
ERCOT forecasts supply will exceed demand by 5,000 to 42,000 MW over the next week, with a minimum of 5,000 MW expected for one hour on the evening of May 26, after the sun sets and solar panels stop working.
This comfortable supply level assumes nothing will change.
But things are always changing: power plants and transmission lines shut down and come back online, weather forecasts change, and storms cause power outages.
Earlier this week, ERCOT said there was a “sudden generation loss” totaling 1,438 MW on Wednesday. This has reduced supplies.
The outage occurred at Panda Energy’s gas-fired power plant in Temple and was likely caused by a tornado, according to energy data and analytics company Wood Mackenzie.
Panda Energy did not respond to requests for comment.