Market Overview


Introduction to the ERCOT Power Market

Unique U.S. Power Market Design

  • The Electric Reliability Council of Texas (“ERCOT”) is the independent system operator that manages the flow of electric power to more than 25 million Texas customers, representing about 90% of the state’s electric load
  • ERCOT is not synchronously connected to the rest of the U.S. power grid and as a result is not subject to oversight by the Federal Energy Regulatory Commission (“FERC”), but is instead regulated by the Public Utility Commission of Texas (“PUCT”) and the Texas Legislature
  • Another unique feature of the ERCOT market design is the energy-only market structure which does not have bifurcated energy and capacity markets as most of other organizes regional transmission organizations (“RTOs”) within the US.

    - Instead, ERCOT uses real-time co-optimization of energy and ancillary services that responds to real-time shortages of operating reserves

    - This structure is called the Operating Reserves Demand Curve (“ORDC”)

    - As a result of the energy-only structure, real-time prices are allowed to spike up to $9,000/MWh to incentivize new generation
  • Natural gas is the marginal fuel in ERCOT and accounts for over 44% of generation, followed by coal, which represents 25% of generation
  • ERCOT has the largest amount of installed intermittent renewable generation (more than 24 GW of combined installed wind and solar resources)
  • The wind penetration record is 56% of load, which was achieved in January 2019
ERCOT Regional Map S
ERCOT Quick Facts S
Generation By Fuel 19 S
Installed Cap By Fuel 19 S