How ERCOT is narrowly getting through an extreme summer — and how experts say it could do better

After months of unrelenting heat during a particularly sweltering summer, the Texas power grid’s ability to meet high electricity demand hit shaky ground Aug. 17.

With power production from wind turbines forecast to be low and solar production expected to drop after sunset, grid operators asked residents to conserve electricity.

It was a move that has since become routine.

Electric Reliability Council of Texas officials later told reserve power sources, including from a growing supply of batteries, to turn on. They directed companies that use large amounts of power to scale back and told transmission operators to reduce the voltage of electricity flowing through the wires, both tools that ERCOT typically saves as situations grow dire.

The power grid operator came incredibly close to triggering the kind of emergency operations that could end in rolling blackouts, ERCOT CEO and President Pablo Vegas recounted in an agency meeting Thursday.

“This summer so far has been … quite remarkable as it relates to the challenges, the number of records that we have set,” Vegas said.

Eight times in August, ERCOT has issued conservation requests as demand during August’s seething temperatures threatened to outpace the state’s ability to secure enough electricity. Plants fired by gas, coal or nuclear power — strained from fighting the same heat that electricity users were trying to escape indoors — went offline on three of those days. On two occasions, solar power threatened to dwindle earlier in the day than expected. Often, wind blew less strong than operators would have liked.

In the February 2021 winter storm, ERCOT forced sustained power outages. The deadly decision saved the grid from total collapse. But the choice left millions of Texans vulnerable to frigid weather. More than 200 people died.

“You want to stay as far away from that as possible,” said Brad Jones, who served as interim president and CEO of ERCOT in the aftermath of the emergency.

This month, electricity customers on the ERCOT grid used a whopping 85,435 megawatts — a 7% jump from the highest-demand day last year. That difference represents enough power for 1 million homes, or, as energy consultant Doug Lewin called it, “a phenomenal amount of power.”

State climatologist John Nielsen-Gammon said he is “almost certain” the summer will be the state’s second-hottest on record. Meanwhile, the state’s population and economy are expected to continue growing — further increasing demand for electricity.

People who pay attention to energy issues credit ERCOT for getting through a difficult stretch so far this year. But they said a future of longer, hotter summers and rising electricity use requires a change in how we think about power.

“We’ve been saying for decades climate change is going to make hot events more likely,” said Michael Webber, professor of energy resources at the University of Texas at Austin. “In some ways this is exactly what people have been saying would happen."

To fix the grid, Texas lawmakers this year focused on creating incentives for companies to build more gas-fueled power plants that provide an on-demand source of power though their emissions drive climate change. Legislators threatened strict regulations for emissions-free wind and solar power that have often helped keep the grid going, though their dependence on the weather means they can’t always produce power.

But energy efficiency advocates pleaded for policies that incentivize Texans to reduce how much power they use and change when they use it. Vegas said ERCOT is evaluating such options. State electricity regulators earlier this month also established programs in Houston and Dallas to allow people to sell power from Tesla batteries to the grid.

“We waste so much energy that this is actually the lowest hanging fruit for improving reliability on the grid,” said Michael Jewell, an attorney who works with renewable energy companies, battery businesses and electricity providers. “If people bump their air conditioner up a couple of degrees, that can reduce the demand on the grid. If people invest in more insulation on their homes, that has a huge impact on reducing demand on the grid.”

To prepare for tight conditions, ERCOT pays some electricity sources ahead of time to be available to provide power as needed. This includes some that can start up within 10 minutes and run for two hours; others can come on within 30 minutes and run for four hours. The grid operator also pays large industrial customers to be able to scale back their power use.

An influx of new batteries into the market — though still a small amount in total — has helped cover the short, tight periods this summer when the sun is setting and wind power hasn’t picked up. The batteries can turn on practically instantaneously. Fast-ramping natural gas plants can come on quickly too and run for longer.

“That’s really what batteries are extremely well suited for: Being able to immediately deploy within seconds and prevent a grid emergency.” said Madeline Laughlin, with Enel North America, which built batteries in ERCOT’s system and helps companies to ramp down power use.

On Thursday, the ERCOT board approved a proposed rule under which some companies providing reserve battery power could be required to have more supply than battery operators say they need to have on-hand. The Public Utility Commission, which oversees ERCOT, will have to approve that rule before it goes into effect. Critics say that it will prevent investment in more battery power because companies won’t be able to make as much money.

The electricity market itself also incentivizes companies to come online when supply could fall short of demand. The price of electricity soars as high as $5,001 per megawatt hour, compared with less than $50 per megawatt hour on a more typical day. Industrial customers scale back power use to save money or to sell the power that they normally produce for themselves to the grid.

If the difference between power supply and demand sinks especially low, ERCOT triggers emergency action. This allows ERCOT to bring on any remaining reserved power sources and to scale back any remaining industrial customers who have agreed to it.

A summer blackout would be unlikely to last longer than a few hours. But since the 2021 catastrophe, grid operators have behaved much more conservatively, or perhaps even with a bit of unnecessary alarm, experts say. ERCOT communicates more with electricity customers and can call on more back-up options earlier, including asking Texans to reduce demand earlier than before.

The “just-in-time” approach still exhausts Ed Hirs, an energy market expert who lectures at the University of Houston. He compared the situation to grocery shopping: He doesn’t want just barely enough food in his cupboard to get through the week; he keeps extra on-hand. But Hirs said the market is structured to favor cheap power over reliability.

“This is nonsense,” Hirs said.