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Chris Amstutz's picture
Senior Analyst, Risk Management & Electricity, GETCHOICE!

Chris Amstutz joined Choice! Energy Management, now GETCHOICE! in 2017. With an emphasis on identifying Natural Gas and Electricity market opportunities for clients, Amstutz publishes market...

  • Member since 2018
  • 29 items added with 18,153 views
  • Apr 19, 2022

Interesting article on challenges that may be presented in the future.

Peter Farley's picture
Peter Farley on Apr 20, 2022

All advanced economies are built to withstand energy droughts by having a) a mix of generation technologies and b) excess capacity. That is why Japan was able to cope with the closure of almost all its nuclear capacity and the US has been able to cope with a rapid rise in gas prices and France up to 1/3rd of its nuclear capacity offline over winter.

The US thermal fleet has some 900 GW of capacity to cope with peak thermal demand of  550 GW and average demand of 370 GW. Even if you allowed that peaking plants were expected to have low utilisation there was always enough CC gas, coal and nuclear to provide 40-50% more annual demand than they did provide. 

While nuclear does not provide a large share of Texas energy it will be useful in prolonged droughts. But Texas can get by quite well with wind and solar capacity designed to deliver 150-160% of annual demand supplemented by waste to energy, nuclear and some geo-thermal. It will still need storage probably equivalent to about a peak days demand or 20% of two weeks demand, but a substantial fraction of that will come from thermal storage as ice or hot water, vehicle batteries and even customer storage so at best (worst?) grid battery storage might provide 20-35% of required storage and very little of that will be Lithium /metal batteries. There would also be a substantial saving in energy costs, if fast start FF generators were allowed to provide a long term average of 5% of energy. The emissions from these plants could easily be offset by reforestation and regenerative agriculture 

Chris Amstutz's picture
Chris Amstutz on Apr 20, 2022

Peter thank you for the intel. I am somewhat familiar with ERCOT, though maybe not to your extent here. Am I wrong in my trying to recall that ERCOT's battery storage capacity is very small at this time? I am googling and seeing 1.1 GW? Again not as familiar with batteries here but does that mean those batteries could supply 1.1 GW of supply for an hour? Obviously ERCOT peak hours can go over 70 GW's. Any insight appreciated.

Initially when I read this article, my mind took me to Germany and what they experience in 2021. I believe they experienced one of their lowest wind generation years in the last 10 years, exacerbating their low natural gas storage situation (obviously before Russia/Ukraine became an issue), and leading to much higher delivered energy costs for consumers there. To me as an energy consultant to large manufacturers, this article is important in that an "energy drought" means higher prices and just yet another variable to contend with for modeling and hedging in the coming years. Volatility seems to be the outcome.

Chris Amstutz's picture
Thank Chris for the Post!
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