In June the Electric Reliability Council of Texas (ERCOT) launched the ERCOT Contingency Reserve Service (ECRS), a new daily procured ancillary service. ECRS is the first daily procured ancillary service introduced to the ERCOT market in more than 20 years.
The ECRS is a crucial element of the electric grid in Texas. It is designed to provide additional power in the event of a sudden increase in demand or a decrease in supply. This reserve is supplied by generators that are not currently operating but can be quickly brought online if needed.
To participate in the ECRS, generators must meet certain requirements, including being able to start up within 10 minutes of receiving a signal from ERCOT. These generators are compensated for their participation in the program, which helps ensure that there is always enough power available to meet the needs of Texas residents and businesses.
The availability and utilization of contingency reserve services in the ERCOT market can have an impact on electricity prices. These impacts are generally related to supply and demand dynamics, market mechanisms, and the cost of providing contingency reserve services.
On the afternoon of June 20, demand for electricity climbed as temperatures across Texas reached triple digits. More than 50 gas and coal plants held back some of their supply as per the ECRS. The real-time power market, which determines the price of electricity, considers that supply as unavailable, giving the impression that grid conditions are much tighter than they are. This causes prices to spike. Within an hour, prices more than quadrupled to $4,500 per megawatt hour.
Since that day, ERCOT has kept more than 2,500 megawatts offline during peak hours. The information has not yet been released to know how many days have had the same dynamic as June 20th. According to ERCOT, the demand for electricity in Texas hit an all-time high on August 10, marking the 10th new all-time peak demand record for this summer alone and the 13th time since 2000 that this record has been broken.