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Texas wind power surge means negative prices

Increasing wind power penetration in Texas brought the return of negative real-time power prices during low-load hours in March as the state extends its lead in wind generation.

The Electric Reliability Council of Texas (ERCOT) said wind output on the evening of 19 February hit a record 11,154MW, or 83pc of the more than 13,000MW of installed wind capacity.

ERCOT set a wind penetration record of nearly 41pc when wind output was 10,308MW while total load was just 25,400MW in the early morning hours of 29 March.

Such high wind penetrations have pressed real-time power prices down to zero or slightly negative on several occasions, ERCOT president Trip Doggett told board members recently. Negative prices were seen on at least three nights during the last week of March.

Negative prices were a common complaint in ERCOT before the 2013 completion of a $7bn network of high-voltage lines, dubbed the CREZ lines, that allowed abundant wind power from west Texas to flow to the state’s power-hungry cities.

Pre-CREZ negative pricing resulted from transmission congestion and was generally limited to ERCOT’s west price zone where a majority of the state’s wind farms operate. Factoring in federal tax credits and state renewable energy certificates, wind farms could make money even when power prices were negative.

Such prices ended in late 2013 when the CREZ lines were energized.

Unlike those negative prices, Doggett said recent negative pricing was seen across all ERCOT price zones.

“That will have a significant impact on decisions that all generation owners will be making at that time,” Doggett said.

ERCOT’s vice chairwoman Judy Walsh asked Doggett what impact rising wind penetration will have on baseload generation. “What is middle of the night going to look like if we have that much intermittent resource?” Walsh asked. “Will the resource mix stay the same or will the baseload not be there?”

Doggett said ERCOT controllers were comfortable operating the system at 40pc wind penetration, but the agency is working on several fronts to determine how much wind “is too much.”

ERCOT expects to have more than 16,500MW on line by the end of the year, 2,000MW lower than previous projections, Doggett said, as the timing of some projects has shifted from this year into 2016. ERCOT raised its estimate for 2016 to 20,508MW from 18,835MW six months ago.

By late 2017, ERCOT expects installed wind generation to reach 22,629MW based on projects seeking to connect to the grid, a level that would exceed the transfer capacity of the existing CREZ network.

At the end of February, ERCOT said 25,300MW of wind was in the interconnection queue, 40pc of the total.

Wind advocates are opposed to measures advancing through the Texas legislature that would repeal the state’s already surpassed renewable mandate and end special treatment for added transmission to serve wind and solar farms.

ERCOT has more than twice as much installed wind capacity as California, the state with the second largest wind capacity, according to an industry group.