Wind Gives Texas Grid a Boost in Winter Blast

February 3, 2022

Thursday, early afternoon report from WFAA Dallas.

Yahoo Finance:

Wind generation in Texas is soaring as a winter storm whips the state, adding an unexpected surge of electric supply as the bitter cold drives up demand on the state’s power grid.

Wind farms were producing about 17.5 gigawatts at 9:55 a.m. local time, 85% higher than the day-ahead forecast, according to the Electric Reliability Council of Texas, or Ercot as the grid operator is known. Wind is accounting for about 30% of the grid’s electricity supply. A gigawatt is enough to power about 200,000 Texas homes.

Most power being used Thursday was contracted the previous day, so the stronger wind generation is helping squash prices. Spot power is hovering at about $30 per megawatt-hour, less than half the cost of supplies secured in the day-ahead market, according to Ercot’s website.

For Friday, when Ercot demand may test the summer 2019 record, prices at the North Hub, which includes Dallas, recently traded at $275 per megawatt-hour on the Intercontinental Exchange. That’s down from the prior day’s close of $500 and $800 at the start of the week, according to a trader and ICE data.

Yahoo Finance:

Icy weather in the central United States caused natural gas output to drop on Thursday to the lowest in a year in many producing basins, and prices to jump in Texas, Louisiana and Chicago to their highest since last year’s February Freeze, Reuters reported.

The output drop reminded the energy market of last February’s Winter Storm Uri, which killed over 200 people in Texas, caused power and gas prices to spike to record highs in many parts of the country and left 4.5 million Texas homes and businesses without heat and power – in many cases for days.

Data provider Refinitiv said average U.S. output fell from a monthly record of 97.3 billion cubic feet per day (bcfd) in December to 92.9 bcfd in January and 91.3 bcfd so far in February.

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