Renewables Accounted for 42% of ERCOT’s Energy Generation in March

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Data from the Energy Information Administration’s (EIA) hourly electric grid monitor shows that wind generation used by the Electric Reliability Council of Texas (ERCOT) smashed its previous high, topping 10.4 million megawatt-hours (MWh) during the month — 2 million MWh above its previous high set last December. That output pushed wind’s share of the ERCOT electricity market to 38.6% and the No. 1 spot in total generation, another first for the rapidly expanding resource, according to Dennis Wamsted of the Institute for Energy Economics and Financial Analysis (IEEFA).

Wamsted’s analysis shows that for the month of March, solar generation topped 1 million MWh, a level it had only reached three times previously (in June, July, and August 2020). Combined, the two renewable resources accounted for 42.4% of ERCOT’s output during the month, well ahead of gas, at 30%, and coal, at just 14.9%.

IIEFA notes that this sharp jump in output can be traced to normal spring winds and to the continuing buildout of new wind and solar capacity in ERCOT. The transmission operator’s latest capacity installation report, released in February, projected that there would be 29,447 megawatts (MW) of wind capacity operating in ERCOT by the end of March, an increase of 2,343MW from the prior month. Similarly, the amount of solar was forecast to climb to 5,649MW from 4,473MW the prior month.

Those increases are putting rising pressure on the state’s fossil fuel generators, pressure that is only going to grow more intense in the next couple of years, according to Wamsted. By the end of 2021, ERCOT estimates more than 12,000MW of solar capacity could be installed within its service territory and the amount of wind could top 35,000MW. Even more capacity is expected going into 2022.

Wamsted notes that another problem for fossil fuels is the dampening impact that the growing amount of renewable capacity is likely to have on prices, particularly during the high-demand periods in the summer. Those times have traditionally provided an outsize share of annual earnings for many generators — earnings that are now threatened by the surge in solar generation.