The Influence of Information Technology on the Energy Mix in Texas



Summary

This report examines the impacts of information technologies (IT) on carbon emissions and electricity price in electricity markets. Specifically, this report focuses on the role IT played in enabling the Electric Reliability Council of Texas’ (ERCOT) transition to a nodal market, the subsequent impacts on the penetration of renewable energy, and the resulting effects on carbon emissions and electricity prices. In summary, IT and data have been core enablers in this transition.


Introduction and Background


This report looks at the role of IT in ERCOT as a case study for the role it might play in modern power markets elsewhere. Power markets are at a transition, with some stakeholder groups pushing towards deregulation to encourage more competition, some pushing for re-regulation to protect conventional generators such as nuclear and coal, and some pushing for mandates that include storage, demand response, distributed energy resources, or renewable energy. In all of these instances, the increasing information intensity of the power sector is driving a growing role for IT. Understanding the recent ERCOT example is instructive of the increasing IT demands in a modern electric market.

• Electricity markets have been evolving since their inception and now constitute one of, if not the most complex machine(s) on earth. ERCOT covers 75% of Texas land area and about 85% of the electric load within the state.

• The ERCOT grid connects more than 43,000 miles of transmission lines and more than 570 utility-scale generation units.

• ERCOT underwent a major transition in 2010 from zonal to nodal operation that enabled more efficient market performance.

• The percentage of electricity provided by wind in ERCOT has increased from 2% in 2006 to about 18% in 2017 while total electricity use has increased in parallel.


About ERCOT


• Electricity markets have been evolving since their inception and now constitute one of, if not the most complex machine(s) on earth. ERCOT covers 75% of Texas land area and about 85% of the electric load within the state.

• The ERCOT grid connects more than 43,000 miles of transmission lines and more than 570 utility-scale generation units.

• ERCOT underwent a major transition in 2010 from zonal to nodal operation that enabled more efficient market performance.

• The percentage of electricity provided by wind in ERCOT has increased from 2% in 2006 to about 18% in 2017 while total electricity use has increased in parallel.


The Role of IT


• ERCOT operates multiple markets for energy and reliability that require quickly processing large volumes of data on electricity demand, supply, and transmission characteristics

• Real-time data-driven grid insight and assessment tools have helped facilitate the continued increase in wind and solar deployments in ERCOT.

• Accurate wind and solar forecasts benefit grids with high levels of renewable energy.

• ERCOT has developed a new IT-driven Reliability Risk Desk on the operation room floor to better incorporate data from and about wind and solar operations to grid operators.