Just reinforcing the view that power prices in Texas will be much lower in the upcoming year, and perhaps beyond, last week Luminant filed notice with ERCOT of the company’s intention to mothball 4 and retire 11 natural gas generators in the Texas power system.
Luminant spokesman Allan Koenig said many of the units are steam-driven and date to the 1950s and 1960s, although some are newer combustion turbines dating to the 1980s. As opposed to so-called “base-load” units that run constantly, the affected units are “peakers,” which run to meet peak demand, usually in the summer.
The article notes that Luminant and other companies also have new generating capacity coming online. Luminant’s new construction consists of three coal-fired base-load units, while they are retiring older natural gas-fired peakers. The combination of moves by Luminant should say something about the economics of power generation and expected price patterns for the next few years in ERCOT.