Assessing Economic Costs of Two Reliable Generation Mix Scenarios in the ERCOT System

Societies need a practical way to assess total costs of future energy mixes in complex power systems. To demonstrate such an approach, we assess the cost of electricity in the ERCOT system across two distinct generation mix scenarios, varying mostly by wind, solar and gas-fired generation, between 2023 and 2050. We use commercial software, also used by system operators and power plant developers, to ensure that evolving generation mixes in both scenarios can meet electricity demands at all times at all nodes. Such jurisdiction-specific, hourly nodal dispatch modeling is recognized as necessary for more accurate representation of costs to maintain reliable operations in complex electricity systems. We capture generation and some system costs, which we call consumer cost of electricity, CCOE, given that end-users pay these costs under different line items in their electricity bills. CCOEs are insightful cost estimates for system planning and policy discussions for a given power system and must be recalculated for different scenarios as technologies, market designs, policies, and more, change. This can be done as part of routine annual or bespoke analyses conducted by system operators.