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capacity margins

Texas Heat – An Energy Market

By Energy Rant No Comments
Texans may need Tabasco, not just for their favorite dish or condiment, but as a deterrent to chewing their fingernails as they ride the cliff of blackouts this summer. Numerous articles, including this most recent one I saw from the Fort Worth Star-Telegram, caution of rolling blackouts as capacity margins are less than 7.5%, which is about half the margin the Electric Reliability Council of Texas (ERCOT) would like to maintain. Supply and Demand I drew a cartoon showing supply and demand curves for differing scenarios below. Sales will increase slightly at lower prices. Electricity sales are very inelastic in…
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