“We are closed, we have no power.” An electrifying personal account of the 2021 #TexasFreeze and the electricity crisis that followed.
- Mar 3, 2021 9:15 pm GMT
We were awake at 2am when the power went out, and the heat with it, on Monday the 15th of February 2021. It was the President’s day holiday. Our apartment was still warm, so it was not bad. By 6am the apartment was freezing, so I put on my winter jacket and then went back to bed. By 7:30am the sun had begun to rear its head. Then I saw it, a white blanket of Snow covered the cars, roads and streets. In the morning many Texans, my housemates included, not having much to do since the power was out, came out to play in the snow. They made a human sized snowman. They were having fun. I was not. I thought I had left all this snow stuff in Minnesota, now here I am, in Texas, with snow everywhere. Literally everywhere. At least in Minnesota, you woke up in the morning and the snow would have most likely been ploughed off the road and shoveled off the sidewalks. But on this day in Texas the snow was everywhere, on the roads making them essentially undrivable and on the sidewalk, increasing the hazard of slipping and falling.
The Wi-Fi was no longer working, and my mobile data service was remarkably slow and intermittent. I think this may have been because the telecommunications towers also lost electricity. I was fortunate to be able to send messages to my loved ones and friends about the situation then I turned off my phone to conserve power. There was not a lot to do so I decided to do some reading. By 6pm the sun began to set, and still there was no electricity. And then the reality of the whole situation and how bleak it was began to set in. It was no longer fun. We had to chop up some wood we found in our balcony to make a fire for our grill to cook our food. Though we did this outside, our apartment was filled with smoke. Seems like the neighbors had the same idea, because they chopped up the tree in front of our apartment, for what I can only think was to make a fire to either boil water, cook food or heat.
The snow was no more exciting, everyone had begun to see it as I did, a nuisance. At this time the apartment was freezing, the Sun that kind of kept the apartment temperature bearable, with a winter jacket of course, had set. This was the first time I had gone more than 4 hours without electricity in the United States. I took out my food stuff from the Freezer and put them outside to preserve them. Then I went to bed. Sleeping in below 10oF (-12oC) weather without heat is painful. Really painful!
The next morning, my housemates and I walked to the grocery store. While the food we had left outside was frozen, we did not think it would be a good use of energy to make the frozen food with the little wood and propane gas we had left. So, getting “easy to make” or dry food from the grocery store seemed like a good option. We had heard on the radio, our only source of communication with the outside world at this time, that this particular grocery store would be open. When we got there, there was a long line of people. We joined the queue and waited. After 30 minutes an employee of the grocery store starts yelling “we are closed, we have no power.” Everyone was frustrated. Then a customer on the queue starts yelling at the grocery store employee “do your job men.” It started getting rowdy. At this point I felt pandemonium was about to break out. I felt it would have only required one person to break into the store, breaking the barrier of respectability, and that grocery store would have been looted. Fortunately, cooler heads prevailed.
At this point I was frustrated. As a power system engineer, electricity entrepreneur and an energy researcher, I started asking myself the following questions: Did ERCOT not do enough resource adequacy planning? What is the capacity market in ERCOT like? Does ERCOT not have a Demand Response Resource (DRR) construct that could have given market participants the incentives to go offline? Did the SF6 gas breakers open, as those gasses start turning to liquid at very low temperatures? Did ERCOT have grid resilience planning processes? Unfortunately, I did not have any access to the internet to get answers to my questions. So, I waited patiently.
We eventually got power intermittently on Wednesday (17th) night, it eventually became stable on Friday the 19th. Our water started to run on Friday afternoon.
I was born and grew up in Nigeria, which has a lot of power cuts. In fact the average Nigerian spends one in every three hours of their lives without electricity. According to World Bank estimates there are over 33 outages a month in Nigeria, and the average duration of an outage is 8 hours. And this is for those who have access to the electric grid. There are still over 85 million Nigerians without access to modern energy services. These people are said to live in energy poverty. But since many Nigerians or people of Nigerian descent live in Texas, there were a lot of memes on social media comparing the Electric Reliability Council of Texas (ERCOT), to the grid operator to the National Electric Power Authority (NEPA), the now defunct vertically integrated government agency that was responsible for generation, transmission and distribution of electricity for the whole country between 1972 to 2005. Nigerians for over two generations became used to screaming “up NEPA!” whenever the power returns. The Nigerian electricity sector is more diverse and robust now, even though extensive chronic power outages remain and many people still live in energy poverty.
So, power outages are not new to me. But in Nigeria when NEPA “takes” the light, you have many options. You could go turn on your gasoline generator for power, or your Solar Homes System (SHS) kicks in. The street lights, ATMs, Telecommunication service, and traffic lights, among other things still work. Like you, the owners of these assets already have alternative sources of electricity. But in Texas, when the power goes out, there is very little you can do. In my case, my phone's mobile data stopped working, I could barely make calls or send text messages, the traffic lights stopped working, grocery stores were closed; it felt like the world was coming to an end. Another big difference is that it was 10oF (-12oC) in Texas. Temperatures never get that low in Nigeria. Never! This is what we were dealing with in Texas.
I consider ERCOT to be one of the greatest electricity markets in the world. This is because electricity prices in ERCOT’s competitive markets are some of the cheapest in the country and maybe the world. And there is room for them to get cheaper. Companies in the market respond to the demand and preference of customers and not the other way around, as is common in many other parts of the country where electricity is heavily regulated. There is little heavy-handed regulation that forces customers to pay a certain price or be stuck with a terrible utility they no longer want to be associated with. This is impossible in many parts of the United States today. In Minnesota or New York, you are forced to do business with the utility responsible for the geographic territory you live in. Even if your electricity provider is downright evil you are forced to associate with them, or go through an expensive, usually very political, process to find recourse. In ERCOT, to a great degree there is consumer sovereignty. The customer is Queen. If electricity providers do not listen to the wishes of their customers, they could go bankrupt, because their customers can easily get another electricity provider. You are not forced to be in a relationship with an electricity provider you do not approve of, and you do not need to engage in any extensive political process for recourse. But during the week of the 15th of February, ERCOT was brought to its knees. I have questions and need to get to the bottom of this. This is my attempt at answering those questions.
First, what is ERCOT?
ERCOT is the independent system operator (ISO) for the Texas electricity market – both retail and wholesale. It is also one of the three grid interconnections in the United States – the other two being the Eastern and Western interconnection. As electric power grids and electricity markets go, ERCOT is unique. In the United States, electricity is regulated on the retail and wholesale levels, usually many states have a public utility commission (PUC) that regulates electricity locally, while the Federal Energy regulatory Commission (FERC) regulates wholesale electricity markets. ERCOT avoids being a member of the contiguous eastern or western interconnection grids for independence and to stay away from federal regulations. The downside to this is that it cannot benefit from the reliability of interconnected systems across large geographic areas. Technically speaking ERCOT is not as independent as stated. It does have two interties with the Eastern interconnection and a couple more with Mexico. ERCOT does not own or operate any power plants. It just manages the flow of electricity between those plants to customers, manages scheduled outages of the generators and serves as the market operator for the sale and purchase of electricity. For a more detailed piece on the Texas electricity landscape please check here.
So, let’s get down to brass tacks on why we were unable to adequately respond leaving over 4 million households and businesses lost power, heat, water, internet or a combination of the aforementioned.
ERCOT issued an Operation Condition Notice on the 8th of February to market participants to watch out for extreme cold weather conditions between the 11th and 15th of February.
At 17:15, ERCOT is issuing an OCN for an extreme cold weather system approaching Thursday, February 11, 2021 through Monday, February 15, 2021 with temperatures anticipated to remain 32°F or below…. Review fuel supplies, prepare to preserve fuel to best serve peak load, and notify ERCOT of any known or anticipated fuel restrictions, Review Planned Resource outages and consider delaying maintenance or returning from outage early, Review and implement winterization procedures. Notify ERCOT of any changes or conditions that could affect system reliability.
On the 11th, it announced that it had predicted peak demand on Monday morning the 15th. According to ERCOT “Generators have been asked to take necessary steps to prepare their facilities for the expected cold weather, which includes reviewing fuel supplies and planned outages and implementing winter weatherization procedures.”
This is because over 60% of heating in Texas is done using electricity, and as temperatures drop, people crank up their heaters. But the cold also affects generating facilities too. By the 14th a new winter peak demand was set for Texas at 69,150 MW. Unfortunately, due to weather conditions many generators tripped. According to ERCOT about 34,000 MW of generation had been forced off the system. By midnight around 00:17am on the 15th of February ERCOT entered Energy Emergency Alert Level 1 (EEA1), which happens “when operating reserves drop below 2,300MW, and are not expected to recover within 30 minutes.” By 1:25 am on the same day Energy Emergency Alert Level 3 (EEA3) was in effect. ERCOT ordered its market participants, that serve customers to start shedding their load, and the blackouts began. According to ERCOT:
EEA Level 3 With Firm Load Shed: At 01:20, Rotating outages are in progress to maintain frequency. ERCOT is asking consumers and businesses to reduce electricity use.
Weatherization of utility facilities:
The utility industry uses a lot of gasses. Different types of gases for different functions. For example, Natural gas is used to turn gas turbines to generate electricity, and Sulphur hexafluoride (SF6) is used to actuate circuit breakers, a very important equipment in an electric substation. At very cold temperatures gasses tend to turn to liquids. And this is very bad. When SF6 in gas breakers start to liquefy the breakers start to misoperate. All these potentially lead to outages. Also, equipment when not properly insulated or weatherized starts to freeze, like the well heads and pipelines for the natural gas supply. Gas moves through pipelines with the aid of motors and pumps, which use electricity. So, if the power to the pumps stop, the gas stops flowing.
Also as generators started to go offline, it was difficult for maintenance crews to go out into the field to repair these assets. It snowed during the storm. In some cases there was about five inches of snow on the ground. Texan cities are not equipped with snow ploughs like their counterpart cities in the Midwest and Northeast. This is because it almost never snows this much in Texas. Also driving on the snow is a skill many Texans do not have. This problem with the logistics of operations and maintenance crews exacerbated and prolonged the outages in many parts of Texas.
The Energy Market in ERCOT
The electric grid is designed in a way by which demand must always equate the supply. As people turn on and off their lights, charge their phones batteries and then unplug it, and engage in the numerous things we use electricity for, the supply of electricity must be ramped up or down to meet this load. If ever demand and supply are out of balance bad things happen. Because sometimes demand can increase to a level where there is not enough supply many electricity markets have developed plans to prevent this from happening. The most common is the use of a capacity market, where market participants can buy or sell capacity for use in cases where the grid operator forecast a potential mismatch. Capacity is not energy; it is the amount of power measured in MW that a generator can provide when called upon. Hence a market participant can build a natural gas plant or diesel power plant to provide power when called upon. For this service the generator providing capacity is paid a fee usually daily. If ever there is an Energy Emergency and the generator is called upon to provide the stipulated amount of MW it is contracted to provide, but does not, it will pay a steep penalty. Hence these generators have the incentive to always respond when they get dispatch signals from the grid operator. Capacity markets are common in other electricity markets like MISO, PJM, NY-ISO and NE-ISO.
But in ERCOT, the energy market is used for handling Energy Emergencies. Whenever there is a forecast of a potential mismatch between demand and supply, ERCOT, allows the price of energy to rise up to a cap of $9/kWh, to incentivize generators to provide energy, which would avoid the mismatch from demand and supply. Remember the grid operator will forecast this before it happens, and then send price signals to the generators to respond accordingly. On a normal operating day energy prices can be $0.02/kWh, during an emergency they can rise up to $9/kWh. So for a natural gas generator of 100,000 kW that provides energy for 5 hours on a normal operation day, it will make $10,000. But during an emergency that lasts 2 hours, the generator can make $1.8 million. This is a great enough incentive for anyone with a generator to bring it online before an Energy Emergency is declared.
This is what happened between the days of the 14th and 18th. So, while electricity prices were high and should have incentivized generators to come online, many of those generators could not because of the effect of inclement weather. If there was a capacity market, those generators that are contracted to provide capacity, may have had the incentive to ensure that their equipment were weatherized or they would have had to pay heavy penalties.
Things to think about going forward.
This issue as we can see is very complex. First, the media has been irresponsible in its reporting on the blackouts. And ERCOT is being blamed for everything. Many industry stakeholders have jumped into proposing solutions, so this “would never happen again.” For me to delve into policy recommendations, I, with a team of some the best engineers, energy policy analysts, energy lawyers, energy researchers and energy economists would have to study in-depth what happened, develop, and test extensive models before a list of proposed solutions could be put forward. So instead of saying potential solutions, I would like to discuss some topics that industry stakeholders like ERCOT and the PUCT among others should think about when developing solutions moving forward.
A Quasi-Capacity Market and Pricing the Demand Response Resource (DRR) product in ERCOT:
While I am not sure that a capacity market would have prevented the worst of the blackouts – to know for sure would require a lot of work in market design – I think incentives matter and when one has a market exposure of potentially millions of dollars, they take action to protect themselves. The same way high prices incentivize increases in quantity supplied and decreases in quantity demanded, high liabilities incentivize insurance buying.
Capacity markets can incentivize waste and bad behavior. Because those generators contracted to provide this service, just get paid for being there – that is for being ready to respond when called up, which may be for 2 hours in a year. It could incentivize, building generating plants when they are not necessarily needed. Whether a plant is called upon to provide electricity is not important, it gets paid regardless. So, a strategy could be having a partial capacity market where existing generators that already provide energy and other ancillary services, can also get paid a fee daily to provide capacity. To get this fee means that whenever they are called upon, and they do not respond they would be exposed to liabilities of the magnitudes of $9/kWh, they would have the resources and incentives to weatherize their facilities.
Incentivizing demand response resource providers appropriately is important. If for example, a large power user, and maybe even some residential users could curtail their load and get paid $9/kWh of energy they would have consumed, they would have a strong incentive to do that. Even residential customers like large apartments could do this. And when the market transactions are settled at the end of the day, the large apartments have millions of dollars to be shared among residential customers. This could be a route by which individuals could benefit from ERCOT high prices during Energy Emergencies while at the same time providing the service of peak load reduction. If I could earn $9/kWh for reducing my energy consumption, I and some other people, may have been willing to, within what we deemed safety, sleep in 10 degrees without heat.
Grid Resilience planning
For so long we have designed electric power systems on the principle of reliability. Three major events made the design and implementation of reliability frameworks into our power systems very important. These events include the:
The November 9th, 1965 blackout, which was caused by a disturbance at the Sir Adam Beck Hydroelectric plant on the Niagara river in Ontario Canada, plunging about 30 million people in the U.S. and Canada into darkness.
The New York city blackout of July 1977.
The August 4th, 2003 blackout, that plunged over 50 million people in parts of Ohio, Michigan, New York, Pennsylvania, New Jersey, Connecticut, Massachusetts, Vermont, the Canadian provinces of Ontario and Québec, into darkness.
According to Philip Schewe, writing about the 2003 blackout:
“In a blackout not only the electricity stops. Cash stopped in Newark because automatic teller machines depend on power. Gasoline stopped in Ottawa because the pumps at the service stations are powered by the grid. Underground mass transit in Toronto stopped. Air conditioning in Buffalo stopped… Water can stop. In Detroit electrically powered filtration stopped, so no more fresh water came through the pipes. In Cleveland the pumps that pull water out of Lake Erie stopped, so there was no more drinking water. The associated process of waste treatment also stopped. Millions of gallons of sewage poured backwards into the lakes.”
This sounds very familiar to what happened in Texas on the week of the 15th of February.
Since then, we have developed different planning processes and frameworks to prevent a situation like this from happening. Now the North American Electric Reliability Council (NERC), the agency responsible for maintaining the reliability of the North American grid has the power to enforce reliability standards. Even ERCOT is not exempt from abiding by NERC rules.
Today we do N-1 and N-2 contingency criteria planning, which means that the power system continues running after the loss of one or two major elements – like a huge generating plant or transmission line. ERCOT operates a N-1 contingency criterion. Also, we design reserve margins into the system, which is usually a percentage of the system historical peak demand.
But with the rise of very large-scale events (VLSE), there is a need to look beyond reliability and design resilience into the system. VLSEs could be weather events, large scale cyber sabotage, among other things. According to a 2014 study by Climate Central, there has been a tenfold increase in VLSE weather events between the mid-1980s and 2012. According to the same study, 80% of all power outages between 2003 and 2012 were weather related. That is, within the same time period about 679 widespread conditions were caused by very large scale weather events.
Figure 2: Increase in number of outage and their causes between 1984 and 2012
And this was before superstorm Sandy in 2013, Hurricane Harvey in 2017 and Winter storm Uri in 2021, among others.
So, what is the difference between reliability and resilience? While these two concepts have been used interchangeably, they do not mean the same thing. Reliability has to do with ON or OFF. If the power stays ON more time than it is OFF, then it is reliable. But resilience takes on a broader approach, beyond ON/OFF binary. National Infrastructural Advisory Council in 2009 defined infrastructure resilience as “… ability to anticipate, absorb, adapt to, and/or rapidly recover from a potentially disruptive event.” Here we anticipate a disruptive event like a winter storm will happen – we then develop the capacity to absorb it, then adapt to it and then recover from it. This means that power may not be supplied in the quantity it is demanded but it will not go OFF.
The frameworks, processes and concepts that could help with grid resilience will be the subject of a different post. But it is important to note that we need to start incorporating resilience processes into grid planning.
So, what caused the blackout?
The short answer: The #TexasFreeze brought about by an act of God – winter storm Uri. The Long answer: our capacity to respond to it.
It is my hope that this teaches all stakeholders the need to develop mechanisms that incentives investing in a grid that responds to the preference of customers, consumer sovereignty, is resilient and decentralized, among other things, ensuring that this “never happens again.”