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Kristen Jaeger's picture
Senior Analyst ISO New England

I have been part of the industry for 15 years and I am experienced in many different areas including customer support, demand response, energy efficiency and asset auditing. I now spend the...

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  • Feb 16, 2021
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The Texas power grid, powered largely by wind and natural gas, is relatively well equipped to handle the state’s hot and humid summers when demand for power soars. But unlike blistering summers, the severe winter weather delivered a crippling blow to power production, cutting supplies as the falling temperatures increased demand.

 

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Richard Brooks's picture
Richard Brooks on Feb 16, 2021

These comments from Ed Hirs are priceless:

 

Ed Hirs, an energy fellow in the Department of Economics at the University of Houston, blamed the failures on the state’s deregulated power system, which doesn’t provide power generators with the returns needed to invest in maintaining and improving power plants.

“The ERCOT grid has collapsed in exactly the same manner as the old Soviet Union,” said Hirs. “It limped along on underinvestment and neglect until it finally broke under predictable circumstances.

For more than a decade, generators have not been able to charge what it costs them to produce electricity,” said Hirs. “If you don’t make a return on your money, how can you keep it up? It’s like not taking care of your car. If you don’t change the oil and tires, you can’t expect your car to be ready to evacuate, let alone get you to work.”

Mr. Hirs should write a book called "Energy Common Sense" on this very topic - he nails it!

Matt Chester's picture
Matt Chester on Feb 16, 2021

“For more than a decade, generators have not been able to charge what it costs them to produce electricity,” said Hirs. “If you don’t make a return on your money, how can you keep it up? It’s like not taking care of your car. If you don’t change the oil and tires, you can’t expect your car to be ready to evacuate, let alone get you to work.”

Highlights the unique position that the utility business sits-- of course they should be able to make back what it costs to produce power, but you're also looking at a 'product' that isn't something customers can go without so keeping it affordable for them is just as, if not more, important. Seems to be a constant push and pull that doesn't have a necessarily easy answer, only amplified when the tech and markets are amid such rapid transformation. 

Bob Meinetz's picture
Bob Meinetz on Feb 16, 2021

Matt, the idea that electricity generation is in "rapid transformation" is hype generated by venture capitalists, with something to sell us we don't need.
The business of generating reliable electricity is very much the same as it was in 1935, when FDR signed The Public Utility Holding Company Act into law. It launched a public/private hybrid system that became a model for the world, and was destroyed by oil industry interests in 2005. RIP.

Richard Brooks's picture
Richard Brooks on Feb 16, 2021

I wouldn't want to be a consumer in Texas right now, with Day Ahead LMP's above $7k

Bob Meinetz's picture
Bob Meinetz on Feb 16, 2021

What went wrong with the Texas power grid? Kristen, the answer is relatively simple: over-reliance on vulnerable, intermittent renewable sources of energy.

Good thing Units 1 & 2 at Comanche Peak Nuclear Power Plant are operating at full capacity this morning, or things could have been a lot worse.

Kristen Jaeger's picture
Kristen Jaeger on Feb 17, 2021

I have read other reports that say Texas has no requirements for wind turbines and other power plants to be outfitted for winter weather, which is a major contributor to their failure in this situation.

Bob Meinetz's picture
Bob Meinetz on Feb 24, 2021

Kristen, it wasn't the electricity generation plants that froze, but wellheads and distribution equipment - where the gas comes out of the ground.

Gas burned in Texas power plants is typically extracted as it's used - it's cheaper than storing it in tanks. But because the fuel source is often far away it's prone to disruptions, especially ones caused by bad weather throughout the state. With wind variable by its very nature, it's not hard to see why outages in Texas were an accident waiting to happen.

Southern California is as dependent on Texas gas as Texas is! The fuel supply for all power plants in the area comes from El Paso through two parallel 40" pipes that cross through New Mexico and Arizona.

Once in California they cross the infamous San Andreas Fault in two places. Within the next 20 years the the Pacific Plate is expected to shift northward along the fault by up to 7 meters, in a massive earthquake that occurs roughly every 150 years. When the pipelines rupture, analysts expect all of Southern California will lose both its gas and electricity for several weeks.

Matt Chester's picture
Matt Chester on Feb 18, 2021

Obviously the tech is there to allow wind turbines operate in cold weather, otherwise many states to the north wouldn't have wind turbines-- but as you note it's whether or not the turbines are outfitted with the right measures to withstand the cold weather. Do you know the cost difference on the installations? Obviously Texas doesn't typically plan for such weather so the cost/benefit analysis found that cold weather provisions weren't worth it, so I wonder if this will reverse that course of thinking in the future.

Of course all reports are that this isn't happening just because of wind turbines being down, but rather a cascading series of factors including other sources of generation, weather events, markets signals, etc. etc. and just having those turbines weather-hardened alone would not have prevented all of the blackouts and shortages. 

Daniel Duggan's picture
Daniel Duggan on Feb 23, 2021

This is a classic cost-benefit issue.  Reliable electricity can be provided just about anywhere, however building out a more resilient electricity system comes at a cost which could be a 10% or 15% increase in utility bills.  Are Texas consumers prepared to pay the additional cost of ensuring electricity availability of 99.9% or whatever number deemed  acceptable?  As a guide to reliability of supply, the British Grid which is considered to be reliable nevertheless produces customer interruption figures of perhaps 50 interruptions per 100 customers per year.  In comparison British natural gas supply is approximately 25 times more dependable with customer interruption statistics of perhaps 2 interruptions per 100 customer per year. 

It’s a philosophical question, does a state provide close to 100% security of supply for most consumers which will result in high taxes and utility bills, or should individuals chose to pay less taxes and have lower utility bills but be more self-reliant?  For example should a warm to hot weather state invest many millions of dollars in frost proofing the electricity system awaiting a 1 in 30-year snow event, or should individuals just take more personal responsibility by having some back-up food in the house, good insulation, a connection to the natural gas supply, a generator with a good supply of fresh gas, and a secondary source of heat be that a log fire or portable gas heaters plus a few spare tanks?  Take your pick, higher taxes and charges, or lower bills and a degree of self-responsibility.  What’s not possible is low costs, no self-responsibility, and a highly reliable home energy situation.

Matt Chester's picture
Matt Chester on Feb 23, 2021

Well said, Daniel-- lots of food for thought, and I'll be eager to see how the industry wrestles with these questions moving forward. 

Richard Brooks's picture
Richard Brooks on Feb 23, 2021

I'm guessing nobody in Texas wants to pay $17,000 for 3 days of electricity. Adding $5.00 to each month's bill for a capacity market seems like a really good investment, when you consider how much it could really cost in some bad case scenarios, like we saw last week.

Bob Meinetz's picture
Bob Meinetz on Feb 24, 2021

It's more than that Daniel, it's a social justice issue - at least in the United States.

Affluent homeowners can take their pick. But how could impoverished ones possibly afford to "have some back-up food in the house, good insulation, a connection to the natural gas supply, a generator with a good supply of fresh gas, and a secondary source of heat be that a log fire or portable gas heaters plus a few spare tanks?"

They can't - they're forced to pay higher prices for electricity. If they can't, they're forced to use less electricity. Their kids get less time on the computer. The parents spend less time with their kids.

Low costs + a reliable electric grid is easy: don't build wind turbines and solar farms. Provide nuclear or gas electricity at a price that's affordable for everyone. If affluent homeowners want to play with renewable toys and intermittent electricity, I say, "Go for it!".

Daniel Duggan's picture
Daniel Duggan on Feb 25, 2021

 A transition to low carbon energy in parallel with an energy strategy in which nuclear power generation is untenable may result in significantly increased energy poverty.  The relatively well off will be irritated by higher energy bills which are small in relation to total household income, while the poor who reside in poorly insulated homes will suffer terribly, and many elderly folk too scared to switch on the heating or cooling will simply die of hyperthermia or from heat stroke.  In nuclear powered France (58g CO2/kWh today) domestic electricity costs US$0.23/kWh, while in Germany, the home of the Energiewende (276g CO2/kWh today) it’s US$0.37 or 60% more expensive for power that embodies 475% more CO2/kWh.  Power prices  https://ec.europa.eu/eurostat/statistics-explained/index.php/Electricity_price_statistics   CO2 intensity https://www.electricitymap.org/map

 

The German electricity price reflects a approximately 31% wind / 28% solar in the generation mix (2020 average), as the proportion of electricity supplied by these sources either directly, or indirectly via forms of energy storage increases to perhaps 80% a German electricity price of US$0.40 or more is not unforeseeable.  A clean environment and reasonable reliable priced energy are universally desired, however current Texas power prices of US$0.12/kWh are impossible to maintain when a dependable renewable energy dominated grid capable of riding-out severe weather events is the objective.  As for social justice, I don’t expect to see that being a genuine factor in determination of energy policy without widespread sustained revolt à la the Yellow Vest protests in France which followed a 2018 increase in diesel and gas taxes.

Germany mitigates high energy costs with high insulation standards.  Significantly increased US building insulation standards are worth serious consideration; 24" of insulation in the attic, 18" in the walls and 12" under floor together with triple glazing, plus mechanical ventilation and energy recovery could reduce home heating and cooling requirements by more than 80%.  Were this the national standard, and high efficiency home building become the norm, the cost increase of a new home would be very well compensated by lower energy use, a much nicer home environment, and dramatically higher property resale value for these well insulated homes.

Bob Meinetz's picture
Bob Meinetz on Feb 26, 2021

"A transition to low carbon energy in parallel with an energy strategy in which nuclear power generation is untenable may result in significantly increased energy poverty."

Daniel, if nuclear energy is "untenable" it's only a product of irrational fear. It's certainly not cost, and it's not safety. Should psychological issues or science guide energy policy going forward?

"Germany mitigates high energy costs with high insulation standards."

And with what does Germany mitigate the costs of 24" of insulation in the attic, 18" in the walls and 12" under floor together with triple glazing, mechanical ventilation and energy recovery?

"...could reduce home heating and cooling requirements by more than 80%."

In what parallel universe have home heating and cooling requirements been reduced by 80% by adding more insulation?

"...when a dependable renewable energy dominated grid capable of riding-out severe weather events is the objective."

In what parallel universe has a dependable, renewable energy dominated grid been possible? Perhaps we should have an example or prototype before wasting $billions on a tired fantasy.

Chavdar Azarov's picture
Chavdar Azarov on Feb 24, 2021

Eleven years ago with ex- editor of Energy Central we discuss that the cities and other populated places have to assure own, local and secure generation facilities independently  of its kind on the level of existence minimum.

How late is now?

Richard Brooks's picture
Richard Brooks on Feb 25, 2021

FYI: ERCOT posted a presentation delivered on 2-24 to it's BOD describing the cold weather events: https://energycentral.com/c/ec/ercot-report-cold-weather-event-2021-bod-presentation-2-24-2021

Bob Meinetz's picture
Bob Meinetz on Feb 27, 2021

The chart below, from the New York Times, should be part of every discussion of what went wrong in Texas. Though the labels didn't copy, they aren't complicated:
1) The light brown line shows gas generation
2) Black = coal
3) Blue = wind
4) Purple = nuclear
5) Yellow = solar
Vertical line in the center marks the start of the storm (Feb. 15).
Tick marks at the bottom are successive days.
Gas, at its peak, is generating about 40 GW.
Takeaways:

1) Though wind generation was cut in half by the storm, frozen wind turbines didn't "cause" the outages. Even before the storm, all 10,700 wind turbines in Texas were generating about as much clean energy as the state's two nuclear plants.
2) 1 nuclear plant = 5,000 wind turbines. Which technology is more cost-effective?
3) The storm took 25% of nuclear down, it took half of wind down. Which technology is more reliable?

Ironically, solar increased during the storm. But look at the dips in gas generation before the storm - it appears ERCOT was curtailing solar before to allow gas generators to reap higher profits (environment be damned). Curtailment ended when generation from every source was desperately needed.

Only in Texas.

Daniel Duggan's picture
Daniel Duggan on Jul 28, 2021

Bob, an A3 rated home consumes 80% less space heating/cooling and water heating energy than an E1 home. E units are the EU's scale of building energy efficiency, E1 is a typical 1970s home, and A3 is the minimum standard for new residential buildings constructed today.  A home constructed to A1 or passive energy standards as is often done in Nordic countries would consume less than 10% the energy needed to heat an E1 home to the same standard, a saving of over 90% in heating fuel costs. There is of course a cost to achieving these fuel savings, very thick insulation, heat pumps, solar panels, etc, meaning the cost of moving a house from A3 to A1 is difficult to justify in more temperate climates where the annual savings may be less than $500. 

Iceland and Norway both bost of having 100% renewable electricity, mainly hydro with a geothermal contribution in Iceland.  Several other European countries have very high renewable content.  The Irish grid was 40% renewable in 2020, mostly variable non-synchronours wind power, and the 2030 target is 70%.

Matt Chester's picture
Matt Chester on Jul 28, 2021

Notable to see that these countries aren't choosing between more efficient use of energy and cleaner energy, but recognize the value stack of doing both at the same time. Hopefully more across the world are taking note of those elegant passive design principles!

Bob Meinetz's picture
Bob Meinetz on Jul 29, 2021

Iceland and Norway both have 100% renewable electricity not because they have more efficient buildings, but because they have abundant natural resources. Combined, their grids provide power to less than 1% of the world's population.
Another abundant resource owned by Norwegian interests is oil. Equinor, the country's state-owned oil and gas company, rakes in $22 billion in revenue each year. That kind of money goes a long way towards making 2.5 million households more efficient. Equinor owned by Norway would be the equivalent of a $1.1 trillion business owned by the U.S. government.
I guess we're supposed to be thankful Norwegians spend a tiny fraction of the money they make selling climate-killing products on insulating their homes.

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