Report
December 20, 2018
Estimation of the Market Equilibrium and Economically Optimal Reserve Margins for the ERCOT Region
Prepared for the Electric Reliability Council of Texas, Inc.
We have been asked by the Electric Reliability Council of Texas (ERCOT), on behalf of the Public Utility Commission of Texas (PUCT), to estimate the market equilibrium reserve margin (MERM) and the economically optimal reserve margin (EORM) for ERCOT’s wholesale electric market. We undertook this analysis with Astrapé Consulting simulating the ERCOT market using its Strategic Energy Risk Valuation Model (SERVM). The model reflects ERCOT’s wholesale market design and projected system conditions for 2022; it probabilistically simulates the economic and reliability implications of a range of possible reserve margins under a range of weather and other conditions.
