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EIA: High temperatures drove record electricity demand and very high wholesale prices in Texas

Sustained 100+ °F (38+ °C) daily high temperatures in Texas last week led to new electric power demand records three days in a row, reported the US Energy Information Administration. ERCOT, the electric system operator for most of Texas, set demand records Monday, Tuesday, and Wednesday last week (1-3 August 2011), exceeding the prior record set 23 August 2010 by 2,518 megawatts (MW) (3.8%).

ERCOT day-ahead prices 1-5 August. Click to enlarge.

On Thursday (4 August 2011), ERCOT did not break another all-time record, but probably only because they shed 1,500 MW of interruptible demand. To help lower demand, ERCOT also made a number of public appeals for conservation during the week.

A scarcity of generating capacity sent wholesale prices to record levels. Peak hourly day-ahead prices climbed higher each day reaching $2,500 per megawatt hour, more than 50 times the average daily on-peak wholesale prices in ERCOT for the first half of 2011, between 3:00 and 4:00 p.m. on Friday (5 August 2011).

Day-ahead prices are set on the previous day and reflect expected market conditions for the next day. Therefore, the high prices for Friday were set on Thursday when ERCOT had called a supply emergency and temperatures were expected to remain high on Friday.

Almost all wholesale electricity sold in ERCOT is sold in the day-ahead market. So almost all wholesale power sold between 3:00 and 4:00 p.m. on Friday was sold at a $2,500/MWh price. The exposure of retail customers to this price depends on whatever hedging arrangements retail suppliers may have in place.



Holy spot price batman, makes PV look like a bargain.

Texas is having a pretty rotten run of weather, hope they get some decent rain soon.

Dave R

Ouch - $2.50 / kWh? That really hurts. Keep in mind that this peak happened in the 3-4 pm range which is a few hours after PV normally peaks unless using tracking or aiming the panels towards the west which reduces annual output.

Solar thermal would definitely have an advantage here as it typically includes tracking and has some storage capability.

What are "typical" spot prices for this time period?


If T. Boone had gone forward with his huge wind farm - this might be a profitable story. For T. Boone. But he's deeply invested in NG, which is going to have a run in CHP systems coming online.

Unless the energy czars declare Marshall Law, we will not see this story in ten years. Because we will have started down the road to fully distributed energy - obviating centralized power, transmission system, peak demands, inefficiency, defacing landscape and polluting emissions.

Replacing old ideas with new, better ones. This is what growing up is all about.


Reel$$....don't forget that the next man-made bubble will be based on clean energy, debts and credits.


The production of new energy appliances in the western manufacturing sector will put millions back to work. The credit/energy market will shrink since an escalating portion of monthly utility bills will decrease.

Utility financial instruments will decrease in value unless the company invests in distributed energy and the new energy paradigm. Community-based energy production supplying schools, government and light industry will become micro-market profit centers for participating home and small business owners.

And the entirely new industry of downsizing the aging grid will employ thousands to decommission old power plants and transmission lines. Why transmit energy when you can make it cheaper and more efficiently in situ??


Why transmit energy when you can make it cheaper and more efficiently in situ??

So I can trade it. As a single family, detached, homeowner I could easily generate more green energy than I needed and sell the excess to people and businesses which can't because they are on higher density lots. Also, the renewable resource is variable so sometimes I would generate more than I need and sometimes I wouldn't (or my CHP could breakdown so I would need a backup) - so either way I would need to have a connection to buy & sell the difference.

And as the resource is variable over a large area a whole lot of us single family, detached, homeowners could easily generate more green energy than we needed and sell the excess to people and businesses across the country.

HarveyD could you sell $0.15/+ Kwh electricity to people paying less than $0.07/Kwh from a stable reliable power grid? Aren't you going to go bankrupt?


I'd do it the same way they do it in Germany.


To expand on that statement: What the Germans did was recognize that clean/green energy has a value over the traded price of normal energy because of its benefits to society: It doesn't pollute so healthcare cost are lowered, it's locally produced so the international political costs are lowered, it employs more people so the economy and tax-base are improved, being distributed it's more secure, etc. They then gave green energy an extra premium to its price to reflect these extra benefits.


Nor do you need a government mandated law to add such a premium. We could just form a Co-op that sells to people who want to be more green but don't have the resources, like the Bullfrog Power company;


Germans and Americans are not on the same wave length with regards to green-clean energy price. Almost nobody in USA will willingly pay a single $0.01/ Kwh more for clean energy (except for a few Californians) while most Germans do not mind to pay $0.10 to $0.15/Kwh more.

You cannot compare those two very different cultures.


Nor would I want to... However you and I, if I'm not mistaken, are Canadians and our culture has already produced the Bullfrog Power company which already has a large customer base of
and organizations;
that do willing pay more for clean energy so there is a market out there.


"Holy spot price batman, makes PV look like a bargain."

Solar combined with ice storing air conditioning systems, like the Ice Bear unit, are a complete solution for this problem. Add a small storage battery to drive the air conditioning fan (far lower power than the cooling condenser pump) during late evening or all night and you have a solution to keeping cool even if the power fails.

You don’t have to cool the whole house to stay safely cool in a heat wave, just one or two rooms. Just a thought about solving the problem more economically.
Better insulation and geothermal can certainly help by reducing the size of the cooling problem.

mds “Calmac: The Ice Age Returns to Offices” - May 2009
“Calmac’s massive ice makers are gaining favor as a way to cut power bills.” Ice Energy
“Using thermally efficient, off-peak power to produce and store energy for use the next day, Ice Energy’s Ice Bear is the industry’s first energy storage solution specifically developed for small to mid-sized commercial buildings, and is applicable to both new construction and existing facilities.”
“Designed and tested for optimal performance in operation with Ice Bear distributed energy storage systems, Ice-Ready™ Rooftop units (RTUs) are available from leading manufactures Trane, Carrier, York and Lennox.” “Calmac: The Ice Age Returns to Offices” - May 2009
“Calmac’s massive ice makers are gaining favor as a way to cut power bills.” “IceCycle: A Retrofit” - October 2009
“IceCycle has a new retrofit version of the peak load-shaving ice-cooled air conditioning systems made by companies like Calmac and Ice Energy.” Mentioned in article above.
They achieve savings on HVAC energy use with smart software controls. mds
“Optimum Energy ‘replaces energy, with software intelligence’ by reducing energy consumption and operating costs with no impact on occupant comfort.”
“can reduce HVAC energy usage by 30-60% for decades to come”

Integrate them with solar and sell them as systems. There has to be a lot of people who would like to be protected from being cooked now and in the future. A good service to provide. A good market.


ai_vin alludes to a viable emerging market in community-based micro-grids. The model he suggests would collate excess energy produced in single family detached suburbs and re-distribute it to high density, inner city multi-family dwellings (or elsewhere.) IF these costs and grid maintenance can compete with an apartment house CHP system - great.

The model might also trade backup-UPS services to their community AND distant customers - again IF grid costs remain competitive with in-situ CHP/distributed systems.

@mds: the Bank America Tower on Bryant Park in NYC uses 5MW co-generation and makes ice overnight with excess electric for cooling during daytime. Impressive. This skyscraper makes about 65% its own energy.


Dallas Morning News quotes ERCOT, the Electric Reliability Council of Texas, which manages the state’s electrical systems;

The Texas electrical grid operator began emergency procedures to prevent total blackout on Tuesday as the heat lead to record electricity demand, and told customers to brace for a repeat in the next few days.

The high temperatures also caused about 20 power plants to stop working, including at least one coal-fired plant and natural gas plants.

..such outages aren’t unusual in the hot summer, and Texas is getting some juice from surrounding states and from Mexico.

According to an ERCOT spokesman, conventional power plants suffer in this kind of heat.

“They can’t really efficiently condense the steam that’s used to make electricity, so that causes unit deratings that they can’t generate as much as they could if the lake were cooler.”


Be it man-made or natural cyclic, these blackouts provide strong argument to move off the centralized grid model. Were some percentage of residences and light industry reliant on localized CHP systems - these heat related black/brownouts would be avoided.

With neighborhood mini-grids interconnecting CHP units - backup and UPS services provide a more stable baseline than central power plants.

Distributed energy addresses reliability, security, efficiency and economy. And the one benefit that should be of interest here is greatly reduced environmental impact. Landscapes unscarred by giant transmission towers, miles of wire, poles, breakers, transformers, dams, levies, artificial lakes etc. And a drastic reduction in mountain top removal, and strip mining.

The iceman is no longer necessary (but he'll come if you pay;)

Matthew OConnor

The Texas electricity grid is very volatile. Having our own grid makes it very difficult to get power on to it when we are in a shortage. If the EPA Cross Air Act is passed then Texas electricity consumers could be in for another summer of inflated Texas electricity rates. A great way to protect one’s self from the market volatility is by locking in a fixed rate that runs throughout the summer.

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