Renewable Generation in ERCOT: Providing Reliable Capacity Contributions

The Situation

Reliable, affordable electricity is a public necessity vital to the functioning of a modern society. After Winter Storm Uri, the Texas legislature directed the Public Utility Commission of Texas to review the Electric Reliability Council of Texas’ (ERCOT’s) wholesale electricity market design. To assist policymakers by quantifying the reliability contributions and energy cost savings renewable energy provides to the ERCOT system, NextEra Energy Resources (NextEra) asked NERA to work with Astrapé Consulting to analyze the impact of renewable generation on the ERCOT system using comprehensive hourly dispatch, system production cost, and reliability modeling. The addition of renewable generation capacity to the ERCOT system contributes significantly to these objectives.  

NERA's Role

NERA and Astrapé prepared a white paper at the request of NextEra, with the goal of objectively evaluating the impact of renewable energy generation on the ERCOT system’s reliability and the prices consumers in the ERCOT region pay for electricity.

The Result

Astrapé’s results demonstrate that adding renewable generation to the ERCOT system reduces the cost of reliable electric service (including the cost of energy, ancillary services, and capacity premiums required to maintain a 1:10 Loss of Load Expectation (LOLE)) for Texas consumers and contributes to overall system reliability without imposing additional reliability costs.

Compared to the No Renewables case, the near- to medium-term cost savings of the 2024 Renewables case for Texas consumers is approximately $6 billion per year.