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Texas power reserves to decline in 2019 as oil, gas drilling rises

Gasoil News - Published on Fri, 07 Dec 2018

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Reuters quoted the power grid operator for most of Texas as saying that electric reserve margins were expected to tighten in 2019 due to increased demand from the growth of oil and natural gas drilling and an expected decline in new generation projects. The Electric Reliability Council of Texas (ERCOT), the grid operator, said in a report the reserve margin for summer 2019 is forecasted to be 8.1 per cent, which is 2.9 per cent lower than its projection in May when it released its last report. The reserve margin is the difference between total generation available and forecasted peak demand, with the difference expressed as a per centage of peak demand.

ERCOT said that it expects reserves to increase to 10.7 per cent in 2020 and 12.2 per cent in 2021.

ERCOT Chief Executive Bill Magness, said that "ERCOT's ability to meet Texans' growing power needs through the record-setting summer of 2018 was supported by the actions taken by power suppliers and consumers, and the policymakers who are committed to the success of the ERCOT market. We anticipate the same type of focus on system performance as we head into another year with tight reserves."

ERCOT said that the anticipated decrease in power reserves for summer 2019 is primarily driven by a higher peak load forecast and delays and cancellations of planned generation projects. Significant oil and gas development in West Texas continues to drive increasing electricity demand, noting the annual peak demand growth rate in West Texas is expected to be around 8 per cent through 2023. That compares with projected annual growth of just 2 per cent for the grid as a whole during the same time.

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Posted By : Joykumar Irom on Fri, 07 Dec 2018
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