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ERCOT load growth: patterns, possibilities, and second thoughts.
Through August 31, ERCOT's 2013 system load was 223 TWh (223 million MWh). Had ERCOT's 2013 capital stock retained its 2010 characteristics for energy intensity - i.e., energy use per unit of economic activity - the system load by that same date would likely have hit 237 TWh, or 6.3% higher than actual.
For the prior year, 2012, ERCOT's annual load (Jan-Dec) was 327 TWh. Again, however, if ERCOT's 2012 capital stock for electricity end uses ( e.g., residential and commercial lighting, residential and commercial space conditioning equipment, industrial process equipment, etc.) had retained its 2010 energy intensity, then 2012 load would likely have reached 339 TWh - 12 TWh higher than actual.
Controlling variables and projecting energy intensity patterns forward can be instructive. For example, let's make several initial assumptions in an effort to predict total ERCOT annual system load for 2024, ten years out. First, assume that 2012 weather patterns prevail unchangingly every year throughout the 2014-24 interval ( i.e., the dry bulb temperature at 4 a.m., July 17, 2019 is the same as the DBT at 4 a.m., July 17, 2012). Second, we also assume the Base Case forecast of Non-Farm Payroll Employment for each Texas county that Moody's provided to ERCOT staff in November, 2013. Third, we assume that ERCOT's capital stock is "frozen" and retains its 2013 (not 2010) energy intensity throughout the entire period, 2014-2024. On this basis, we can reasonably expect ERCOT's 2024 annual system load will be around 403 TWh.
But if assumption #3 will not hold, and if instead we expect that ERCOT's capital stock energy intensity will change over the 2014-24 interval in the same manner as it we have seen it change during the 2010-13 time period - i.e., if we assume that the same compound annual growth rate (CAGR) in energy intensity for 2014-24 as for 2010-13 (in this case, a decline) - then we might expect the 2024 system load to reach only 358 TWh, or fully 45 TWh less than what it would have been with the 2013 efficiency level still frozen in place.
As will be examined throughout this report, the recent changes in ERCOT utilization patterns have been dramatic. Should they continue, then future ERCOT system load surely will exhibit a significant diminution.
And so we reach a looming question: are recent trends "the new normal" or, rather, are they unique and unlikely to be sustained?
This report will describe ERCOT's historical energy intensity patterns for 2010-13 (both graphically and mathematically) and then, in a highly preliminary fashion, will explore future possibilities by taking current measures of energy intensity (both as they are trending now, and by contrast, if they should become "frozen" over time), and then comparing those measures against the national energy intensity forecasts provided by the U.S. Energy Information Administration in its 2013 Annual Energy Outlook (AEO).
Before we get started, let's look ahead briefly