Energy Market Update

• The record new preliminary peak of 91,308 MW from 7/22 was revised down by ERCOT to 91,089 MW so still a new all-time record load and still represents a +6% increase over the 2023 record.  There was strong solar production last week as ERCOT set a new peak for maximum solar output of 35,281 MW on July 30^th.  Wind was strong last week as well, with flat average load coming in at 12-14 GW most days. July 31^st and August 1^st were the only days temperatures in Dallas broke 100 and Houston was 96-99 F most days.
• This week will see Dallas reach 101^o F for August 3-6^th before cooling to the upper 90’s F while Houston will drop form 100 ^o F on Tuesday (8/4) down to 94 ^o F by Thursday 8/6.  The overnight models on Monday into today showed mixed changes, with the American model now cooler than both the warm-biased European model and the cool-biased AI guidance. This shift in the American model makes the math a little more fuzzy. This week, temperatures are expected to reach the lower 100s in Dallas and the upper 90s in Houston and San Antonio. A cold front should reduce the heat somewhat over the weekend, followed by renewed warming next week. This time, the model averages are slightly higher, suggesting temperatures in the lower to perhaps middle 100s in Dallas and from the upper 90s to 100 in Houston and San Antonio. Renewable generation is forecast to follow this pattern, with stronger wind generation on the hotter days.

ERCOT Real Time Prices

 Source: ERCOT

• Real time prices saw some negative congestion in the South & West zones with real time prices were in the mid $20’s/MWh again as load was overall moderate as mentioned above.    

Recent Solar, Wind and Battery Milestones:

• The new all-time maximum load record of 91,089 MW from July 22^nd still stands but August has traditionally seen ERCOT set its new peak loads. ERCOT set a new maximum solar output record 35,281 MW on July 30^th and the second new one this week. July 4^th saw a new battery charging record set of 10,522 MW on July 4^th at 9:05 CT, breaking the record set on July 3^rd of 9,277 MW.  On July 8^th ERCOT set a new discharge record for batteries of 11,674 MW breaking the record of 10,372 MW set back on March 13^th.
• June 25^th saw a new record output for combined renewables of 51,974 MW, the second this week and breaking the previous record of 47,919 MW on May 14^th.  ERCOT set a new wind record last week at 28,928 MW on May 17^th at 11:50 PM CT as winds were strong overnight.  The previous maximum wind record of 28,715 MW set on 3/14 at 10:55 pm CT. ERCOT also set a maximum renewables output of 47,919 MW on May 14^th at 3:15 pm CT. This was ~900 MW higher than the previous record from last June.

Generator Outages

• Thermal generation outages in ERCOT rose from 9 GW to 10.5 GW last week amid the +100^o F heat driven demand surge before settling back down below 9 GW. Wind, solar and batteries again helped provide adequate reserves. While this heat event was short lived its demonstrates how forced outages can rise during an extended heat wave event. August could see a return of above normal temperatures as that is typically the month ERCOT sets its highest loads.

https://www.gridstatus.io/graph/ercot-outages?iso=ercot&outageType=thermal

Source: ERCOT & Grid Status

TX Legislature, PUCT, & ERCOT News:

ERCOT Prepped to Finalize Batch Zero Categories by August 7^th

ERCOT provided a preliminary view of Batch Zero eligibility during the 7/29 Technical Advisory Committee meeting, indicating that approximately 205 GW of Large Load could qualify based on the Batch 0 study criteria.  The estimate includes 65 GW of base load, 114 GW of studied load, and 25 GW still under review to be allocated as either base or studied load.  Stakeholders were surprised by the size of the potential pool, which is roughly double ERCOT's previous June estimates of ~35 in base and 65 in study.  Additionally, ERCOT was careful to say that these numbers do not include a review of all of the eligibility criteria including the financial postings or site control requirements.  Final eligibility determinations will be made by 8/7, with results communicated to the interconnecting Transmission Service Providers by 9/2.  ERCOT is facing requests totaling 474 GW, (a 5X growth in the ERCOT grid) of new requests, of which 90% are data centers. These are two important factors that were mentioned by the Governor in actions taken this week….

You could say the music stopped on Monday August 3^rd when Governor Abbott issued an Executive Order to both ERCOT and the PUCT to first conduct an audit of all data center applications before proceeding with interconnection studies for Batch Zero. “Our top priority is to protect Texans’ safety and quality of life,” Abbott said in an Aug. 3 news release.

ERCOT received a letter from PUCT Chairman Gleason stating that PUCT and ERCOT will be required to collect the following information from each Large Load application as part of their audit:

To inform these efforts, the PUC and ERCOT must also obtain the following information categories from each data center project:

• Information detailing the extent to which data centers are paying their own way or depending on the state for financial assistance. That would include all state and local tax incentives, grants, abatements, or other public financial assistance received or expected to be received; and
• The extent to which data centers are providing their own power or depending on the ERCOT grid for that power. Details should include projected annual and peak electricity consumption; and any effort and progress to construct or procure on-site electric generation, including generation type, or other measures to reduce demand on the ERCOT grid; and
• The extent to which data centers are bringing their own water and reusing their own water as opposed to using water needed by local communities. The details should include projected annual and peak water consumption and anticipated sources of water supply. You must also obtain information about the cooling technology that will be utilized, including whether the facility will employ air-cooled, closed-loop, or another water-efficient cooling system; and
• The extent to which data centers are using measures to reduce impacts on neighboring property owners and communities, including noise mitigation, light controls, setbacks, traffic improvements, emergency response coordination, and other community protection measures, understanding that each community is unique; and
• Information detailing the ownership and controlling interests in the project.

ERCOT will petition the PUCT at its August 20^th meeting for a good faith exemption to pause work on Batch Zero.  ERCOT will consult with the PUCT to determine next steps. ERCOT will update this Market Notice once the filing has been made with the PUCT.

Based on the Governor’s actions this week, there are several implications for Large Load customers:

• Large data center and other high-load projects may face delays in the interconnection process.
• ERCOT is not providing the expected Batch Zero classifications on the original timeline.
• There is additional uncertainty around future transmission infrastructure as state leaders have called for the PUCT to reject the proposed 765 kV transmission projects. Many large-load studies were based on those lines being built.

Before the Governor’s actions on Monday August 3^rd, there was a Texas Senate Hearing on Grid Issues on 7/29 with the Senate Business & Commerce Committee convened to hear testimony on rapid load growth driven largely by data centers, the need for additional dispatchable generation, transmission cost allocation, and landowner concerns about major transmission buildout. Policymakers emphasized maintaining reliability and affordability while ensuring large new loads pay their fair share and rural property owners are not disproportionately burdened.

Much of the discussion focused on balancing economic development with customer protection. ERCOT and PUCT leadership emphasized that Texas needs additional dispatchable resources, particularly natural gas-fired generation, while lawmakers complained that most new projects in the interconnection queue remain solar, storage, and wind. Committee members and witnesses discussed market reforms and requirements that could support reliability, including DRRS Plus, firming or load-serving obligations for large loads, co-located generation, and stronger financial commitments for interconnection requests. Cost allocation was also central, with support for shifting from 4CP to 12CP transmission allocation and adopting take-or-pay demand charges so infrastructure costs tied to large loads are not shifted to residential customers. A potential exit fee for loads that prematurely leave the market was also suggested.

Transmission siting and landowner impacts were a major focus of the hearing. ERCOT and PUCT explained that expansion is being driven by data center growth, Permian Basin demand, broader economic growth, and the need to move power efficiently across ERCOT, while some questioned whether projects should proceed before there is more certainty about future load and generation locations. Some lawmakers suggested there would be no need for new transmission if generators would simply build where the load/demand is.  Landowners raised concerns about impacts to ranching, agriculture, property values, wildlife, conservation lands, and rural communities, and called for earlier engagement, longer review timelines, independent analysis, corridor planning, ombudsman support, and stronger statutory protections.

Overall, the hearing balanced  discussions about large load growth and market design and most concerns were focused on the proposed 765-kV transmission buildout.