Group Meeting

Thursday 18 May 2023, 10:00-12:00 PM CT

A Long-Term Outlook and Impact of Ongoing Reforms

In the past twelve months, ERCOT has set the stage for key changes which will impact the market for decades to come. Annual power prices averaged more than $60/MWh in 2022, the second highest annual price in a decade, along with record-breaking peak load in both the summer and winter seasons. The technology mix has also evolved significantly—2 GW of wind capacity and over 1 GW each of solar and battery storage capacity entered operation in ERCOT in the last 12 months.

Policy uncertainty for ERCOT is at its greatest level since the market’s inception. The Performance Credit Mechanism (PCM) has been unanimously approved by the Public Utility Commission, but implementation is pending guidance from the Texas Legislature. In addition to the PCM, key changes are being considered in the 88th Legislative Session which could introduce new permitting requirements and costs for renewables assets, a separate out-of-market backstop reliability service, and a new ancillary service called Dispatchable Reliability Reserve Service.

In this session, we will discuss key results from our annual update to the ERCOT Power and Renewables Market Forecast, to be released late April 2023.

The session will address the following questions:

  • What are the long-term dynamics to watch for?
    • How do we expect commodity prices and demand to evolve in the ERCOT market?
    • What is the long-term outlook for the technology mix in our Central scenario? What is our hub level price projection?
    • How do market outcomes vary by location, and where will be the main areas of congestion in the next decade?
  • How are batteries being impacted by recent market changes?
    • What level of gross margins have batteries achieved in the market, and how have returns varied by strategy?
    • How have ancillary services been impacted by battery capacity increasing to 2.2 GW?
  • What is the potential impact of ongoing market reform processes?
    • What impact would the Performance Credit Mechanism and other legislative proposals have on market outcomes?
    • How has the introduction of ECRS impacted the long-term outlook for battery storage? How does this vary by battery duration?


This session is for subscribers only. If you are not a subscriber and are interested in attending, please reach out to Francisco Ortega.

Subscribers Only

This session is for GB Power Market and GB Renewables subscribers only.


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