The heat rate is the number of British Thermal Units (BTU) needed to produce a kilowatt-hour (kWh) of electricity. In other words, the average heat rate is a measure of how efficiently a generating unit converts fuel into electricity. The lower the heat rate, the higher the thermal efficiency of the unit.
This measure is calculated by taking the energy input to a system, typically in BTU/kWh, divided by the electricity generated, in kWh.
The FY 2014-15 actual heat rate of 9,945 was lower than the prior year and lower than the goal of 10,152. During this period, market conditions, described below, resulted in generation units with lower heat rates being used.
The system average heat rate varies year-to-year. The main factors that drive the heat rate of Austin Energy (AE) generation are the efficiency of the generators used, their production cost and the market price for power. During FY 2014-15, average Electric Reliability Council of Texas (ERCOT) market prices were low due to low natural gas prices. Low natural gas prices lower production costs for natural gas generators. Market prices, which are impacted by supply, demand and the pricing of fuels throughout the ERCOT grid, resulted in dispatch of the AE natural gas fired generators, particularly units that have a lower heat rate. Additionally, AE cycled units offline when the market prices indicated that that action would benefit AE customers. Cycling units offline results in less low-load/higher heat rate operations. The result was a lower average heat rate for the fleet.
Austin Energy utilizes its thermal, dispatchable generators to manage power supply costs for its customers. The type of generator dispatched is based on the market price and production cost of the unit. Depending on the price of fuels (e.g., coal, natural gas, etc.), units are dispatched into the market to result in the lowest power supply costs for AE customers. Austin Energy continues to monitor efficiency and make improvements in support of its mission of safe, clean, affordable and reliable power supply.