Testimony to Senate Committee on y Natural Resources, Chairman Troy - PowerPoint PPT Presentation

Testimony to Senate Committee on y Natural Resources, Chairman Troy Fraser August 18, 2010 Trip Doggett President & CEO

Installed Capacity y p 2 Installed Capacity

2009 Energy Production - by Fuel 3

Reserve Margins for Years 2000 through 2015 60% 60% 50% E i ti Existing plants and plants under l t d l t d Pl Planned generation under d ti d construction Full Interconnection Studies 40% 30% 12.5% Target 20% 10% 10% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 4

Generation Output by Fuel – Summer Peak Day July 13, 2009 Wind Other Hydro Gas Coal Nuclear 80,000 70,000 MCPE = $74.16 60,000 MCPE = $30.04 50,000 50,000 40,000 MCPE = $16.90 30,000 20,000 10,000 0 0 0:15 1:15 2:15 3:15 4:15 5:15 6:15 7:15 8:15 9:15 10:15 11:15 12:15 13:15 14:15 15:15 16:15 17:15 18:15 19:15 20:15 21:15 22:15 23:15 5

Generation Output by Fuel – Winter Peak Day January 8, 2010 Wind Other Hydro Gas Coal Nuclear 80,000 70,000 60,000 MCPE = $83.75 MCPE = $110.78 50,000 MCPE = $37.63 MCPE $37 63 40,000 30,000 20,000 10,000 0 0 0:15 1:15 2:15 3:15 4:15 5:15 6:15 7:15 8:15 9:15 10:15 11:15 12:15 13:15 14:15 15:15 16:15 17:15 18:15 19:15 20:15 21:15 22:15 23:15 6

The ERCOT Transmission Grid There are 40,327 Miles of Transmission Lines in Texas… There are 40 327 Miles of Transmission Lines in Texas 8,917 Miles of 345kV Lines 19,748 Miles of 138kV Lines , 6,593 circuit miles of transmission built since 1999 5,729 circuit miles of transmission under study $4.4 b investment in $4 4 b i t t i transmission placed in service since 1999 $8 2 b $8.2 b under development d d l t (including CREZ transmission) 7

ERCOT Renew able Generation – Wind In ERCOT Today In ERCOT Today… • The Current Installed Wind Capacity is ~ 9,317 MW 9,317 MW This makes Texas the largest wind power jurisdiction in North America (passing California in 2006) • We’re studying ~ 41,000 MW in additional wind interconnection additional wind interconnection development Additional bulk transmission lines are already needed in West Texas (independent y ( p of CREZ generation) 8

ERCOT Renew able Generation – Wind 12,000 12,000 Cumulative Planned (Signed Interconnection Agreement) MW 10,445 Cumulative MW Installed 10,209 10,209 1,128 10,000 892 892 9,617 9,467 300 300 8,916 150 8,005 8,000 6,000 4,785 317 317 317 317 317 9,3 9, 9, 9, 9, 4,000 2,875 1,854 , 2 000 2,000 1,385 1,173 816 977 116 116 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Year as of July 31, 2010 9

Example: Challenge of Follow ing Wind Variability 70,000 5000 4500 65,000 4000 60,000 3500 55,000 W Wind MW 3000 3000 50,000 Load MW 2500 45,000 9:39 ‐ 600MW fleet 2000 13:15 ‐ 600MW fleet 13:15 600MW fleet OOME up issued OOME down issued 40,000 1500 35,000 1000 30,000 500 25,000 0 8/9/10 8/9/10 8/10/10 8/10/10 8/11/10 8/11/10 8/12/10 8/12/10 8/13/10 8/13/10 8/14/10 8/14/10 8/15/10 8/15/10 8/16/10 8/16/10 Integrated Load Actual Integrated Wind Output 10

Conclusions • Reserve margins appear to be steady over the next few years with a significant amount of generation under study; continued development of conventional generation is needed to meet load growth. • Reducing the ERCOT market’s reliance on natural gas capacity would have positive implications for reliability and price volatility. However, conventional generation is required to respond to the variable nature of renewable resources, such as wind. bl h i d • ERCOT is a world leader in wind generation and integration of renewable resources. • Demand response will be an integral part of meeting Texas’ energy needs in the future and will affect ERCOT’s load forecasts going forward. • Nodal will help in responding to steep ramps of variable generation. Nodal is likely to influence Reserve Margins in out years. 11