Electricity prices in Texas rose with cold snaps ready to test the grid

Electricity prices in Texas rose to more than $ 1,000 per megawatt-hour by Friday, when demand ahead will hit a winter record in the biggest test since extreme cold and blackouts nearly killed hundreds nearly a year ago.

Demand for it is not exploited by the Electric Reliability Council of Texas, or Ercot, is expected to peak at 71,806 megawatts on the morning of February. 4, a level never seen before outside the summer season.

By February 2021, demand was ready to climb to an all-time high before widespread disruptions darkened the second-largest U.S. state for days.

Remembrance of that crisis creates a fear premium for days to come, when a deep cold is expected to subside in Texas, according to several traders. At-peak power for Ercot’s North hub, which includes Dallas, closes at $ 800 for February. 4 on the Intercontinental Exchange after trading $ 1,000 on Monday, traders said. By comparison, Wednesday raised $ 60 and Thursday nearly $ 560, a trader said.

A massive storm set to sweep the central US has left nearly two-thirds of Texas under winter storm surges and weather forecast, as temperatures are set to drop from highs in the upper 60s Fahrenheit (20 Celsius) on Tuesday to 14 degrees in Dallas Thursday night and 10 in Midland. A wide area of ​​Texas, including Dallas and Fort Worth, is expected to receive a mix of ice and snow, the National Weather Service said.

“This is the strongest cold event so far this winter, but not as cold as last winter,” said Matt Rogers, president of the Commodity Weather Group.

However, the Lone Star state still faces challenges later this week, such as ice on turbines and snow and sleet that could hinder solar generation, Rogers said. In general, temperatures in some places can be around 25 to 30 degrees below normal, although the cold snap will only last 2 to 3 days, whereas it remained much longer a year ago.

“Dallas should go down to 13 Fahrenheit, which is well below normal, but not the -2 Fahrenheit of last year,” Rogers said.

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