The Situation: Major Energy Supplier Gets Hit with Unexpected weather conditions
On July 13th, 2022, ERCOT faced public discomfort and profit loss as energy demand came close to exceeding supply. During an interview the interim CEO of ERCOT expressed a need for better weather intelligence in a very important interview. With triple digit temperatures combined with a lack of wind to power wind farm turbines, Mr. Jones issued an appeal to Texans and businesses to reduce their air conditioning usage to conserve power as much as possible from the hours of 2-8 PM to avoid the catastrophic failure of the Texas power grid.
Closer to the coast, Corpus Christi and Houston recorded 4 PM temperatures of 99 and 100 degrees, respectively. Dallas and San Antonio recorded highs of 104 and 102 further inland. Across all four cities, surface wind observations ranged from 7-13kt, barely meeting the threshold for wind turbines to start turning.
Figure 7: Temperature & wind data from NWS archives
Real-time hourly prices exploded from June 29 hourly highs of $131/MWH to June 13 highs of over $5000/MWH in Houston, West, and North Zones reflecting both increased load demand and low intermittent generation supply.
Figure 8: Energy trading price data from June 29th – July 14th.
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