By Scott DiSavino
(Reuters) -Texas power prices hit a 30-month high with demand expected to reach record-breaking levels on Friary as homes and businesses crank up their air conditioners to escape a scorching heat wave.
The state grid that supplies power to 26 million customers was operating normally Friday morning, but supplies are expected to tighten when the sun goes down and solar power drops, according to the Electric Reliability Council of Texas (ERCOT) grid operator’s website.
To reduce demand, the grid urged consumers to conserve energy for a second day in a row on Friday afternoon.
ERCOT said it avoided emergency operations on Thursday “due to the conservation efforts by Texas residents and businesses, combined with timely rainfall in the Houston area, improved wind conditions, and additional grid reliability tools.”
Next-day prices at the ERCOT North Hub, which includes Dallas, soared to $1,599 per megawatt hour (MWh) for Friday, the most since the 2021 February freeze when prices held over $8,000 for a couple of days. The same hub reported $925 MWh on Thursday.
That compares with an average of $85 so far this year, $78 in 2022 and a five-year (2018-2022) average of $66 per MWh.
The fragility of the Texas grid was highlighted in 2021 when a massive blackout killed dozens and left millions without power, water and heat for days as gas supply lines and power plants froze.
Houston, the biggest city in Texas, could reach a record-breaking 104 degrees Fahrenheit (40 degrees Celsius) on Friday, said the National Weather Service, which issued an excessive heat warning for the greater Houston area. This month has had 24 days of above 100 F temperatures.
ERCOT said it expected to have around 89,100 megawatts (MW) of capacity when demand peaks at 86,918 MW around 4 p.m. local time on Friday. That would break the grid’s all-time high of 85,435 MW set on Aug. 10.
But as the sun goes down and solar power wanes, the grid expects supplies to tighten to less than 1,000 MW over forecast demand for about 30 minutes around 8 p.m.
(Reporting by Scott DiSavino in New York; additional reporting by Rahul Paswan in Benagluru; Editing by Susan Fenton, Emelia Sithole-Matarise and Marguerita Choy)
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