NRG CEO Gutierrez says ERCOT overstates generation capacity
By L.M. Sixel Aug. 7, 2019
The CEO of NRG Energy said Wednesday that the state’s power grid manager is overstating the amount of generating capacity and electricity supplies will be much tighter in coming years than estimated.
The state’s grid manager, the Electric Reliability Council of Texas, is predicting healthier power reserves over the next five years as more solar and wind projects come online and relieve concerns Texas won’t have enough electricity to meet the state’s needs. But those predictions are too optimistic, said NRG CEO Mauricio Gutierrez, who leads Texas’ biggest seller of electricity.
Gutierrez told investors that ERCOT’s included out-of-date information in its May forecast by including 1.7 gigawatt capacity of three natural gas plants that have been delayed an average of five years with no signs of any of them moving forward. One gigawatt provides enough power for about 700,000 homes.
ERCOT estimated in May that Texas would have a reserve margin of 10.5 percent next year and 15.2 percent in 2021. The reserve margin is expected to be 13 percent in 2022, 10.3 percent in 2023 and 7.8 percent in 2024, according to ERCOT.
This summer, the reserve margin sits at 8.6 percent, just more than half of ERCOT’s reserve margin goal of 13.75 percent. ERCOT issued warnings in the spring that it may have to call for power conservation, import power from other states or take other measures to keep the lights on and the air conditioners humming. ERCOT has already issued heat warnings this week in Dallas and other parts of North and Central Texas that prevent utilities and retail electric providers from shutting off power for non-payment of bills.
“Let me be clear,” said Gutierrez. “The ERCOT market needs a tremendous amount of investment to just simply maintain the low reserve margin it currently has.”