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May 29, 2014
Report Authored by Brattle Consultants Expands on Previous Work in Analyzing Relationship Between Natural Gas and Renewables in Texas Electricity Market

Brattle consultants recently released a report for the Texas Clean Energy Coalition (TCEC) that builds on two previous reports that aimed to show how renewable and natural gas-fired electricity sources would develop in the next two decades, and how this development would depend on gas prices, the existence of a capacity mechanism in ERCOT, national carbon policies, and other key market drivers.

In the new report, the authors employ a modeling system that combines a model of the decisions of market-driven developers of a wide range of new electric resources with a model that simulates the minute-by-minute operation and control of the grid by ERCOT. By combining these two perspectives, the model finds future trajectories that represent, for any given scenario, a realistic set of resources the market is willing to build and that can be integrated and managed by ERCOT to yield adequate and reliable power service. The report also finds that adoption of expanded energy efficiency and demand response programs could help reduce 40%-50% in projected peak demand growth across the system.

The authors find that the above scenarios, most of which would require state policy and/or market changes, provide a more complete answer to our original motivating question, i.e., what are the possible range of outcomes for the full set of electricity resource options in the future Texas power grid? What are the drivers of these futures, and how much impact do they have on electricity prices, greenhouse gas emissions, and other important factors? How much of the future depends on policy choices versus the inexorable tide of market forces?

The report, “Exploring Natural Gas and Renewables in ERCOT, Part III: The Role of Demand Response, Energy Efficiency, and Combined Heat & Power,” was authored by Brattle principals Ira Shavel, Peter Fox-Penner, and Jürgen Weiss, senior associates Ryan Hledik, and Pablo Ruiz, associate Yingxia Yang, consultant Rebecca Carroll, and research analyst Jake Zahniser-Word.

To download the report, please click here.