Windpower Engineering & Development

  • Home
  • Articles
    • Most recent posts
    • News
    • Featured
  • Resources
    • Digital issues
    • Podcasts
    • Suppliers
    • Webinars
    • Events
  • Videos
  • 2025 Leadership
    • 2024 Winners
    • 2023 Winners
    • 2022 Winners
  • Magazine
  • Advertise
  • Subscribe

Low power prices are dimming the future at ERCOT

By Paul Dvorak | March 20, 2017

Since April 2015, S&P Global Ratings has noted weakening conditions in the Electric Reliability Council of Texas (ERCOT). Following demand changes and continued price volatility, ERCOT has continued to face new challenges which have resulted in numerous credit downgrades and forecast revisions.

Texas has too much power pushing prices down. Could improved transmission be an answer?

The duration and extent of weak ERCOT power prices now suggest a longer-term, secular challenge, which isn’t likely to reduce credit concerns in the near-term.

The report provides a much fuller analysis, however here are a few of the key points:

  • The ERCOT power market has weakened significantly between 2014 and 2017, with power prices dropping to unsustainably low levels and crippling profitability for generators.
  • The proliferation of new renewable installations, specifically wind generation, has also contributed to lower cash flows for conventional generators in the state. With the federal extension of the production tax credit (PTC) and investment tax credit (ITC), wind generation within ERCOT has grown substantially. At one point in November 2016, Texas’ wind turbines produced about 45% of the grid’s requirements. With $23/MWh in incentives, wind generators in ERCOT are able to bid in at negative pricing, hampering overall market prices.
  • While there is no pressing incentive for the state of Texas to consider constructing a capacity market mechanism, bloated reserve margins (now 18% compared to a 13.75% target) and the absence of a capacity market could be troublesome for longer term stability.

For the full report: https://goo.gl/8XSCFO


Filed Under: News
Tagged With: ERCOT, S&P Global Ratings
 

About The Author

Paul Dvorak

Related Articles Read More >

Richardson Electronics to deliver pitch energy modules to TransAlta wind fleets
Equinor halts work on Empire Wind offshore project after federal government order
ARESCA wants input on offshore wind standards
US wind market has worst install year since 2013

Podcasts

Wind Spotlight: Looking back at a year of Thrive with ZF Wind Power
See More >

Windpower Engineering & Development Digital Edition

Digital Edition

Browse the most current issue of Windpower Engineering & Development and back issues in an easy to use high quality format. Clip, share and download with the leading wind power engineering magazine today.

Windpower Engineering & Development
  • Wind Articles
  • Solar Power World
  • Subscribe to Windpower Engineering
  • About Us/Contact Us

Copyright © 2025 WTWH Media LLC. All Rights Reserved. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of WTWH Media
Privacy Policy | Advertising

Search Windpower Engineering & Development

  • Home
  • Articles
    • Most recent posts
    • News
    • Featured
  • Resources
    • Digital issues
    • Podcasts
    • Suppliers
    • Webinars
    • Events
  • Videos
  • 2025 Leadership
    • 2024 Winners
    • 2023 Winners
    • 2022 Winners
  • Magazine
  • Advertise
  • Subscribe