Predictable extreme Texas weather – this time heat, not cold – has again embarrassed the Lone Star State’s fossil fuel braggarts and humbled the state’s go-it-alone electric grid, the Electric Reliability Council of Texas (ERCOT), once again rescued by allegedly unreliable renewables. Fortunately, the state was able to avoid rolling blackouts.
The Houston Chronicle reported last week (Aug. 31), “Natural gas and coal plants, mainstays of the state’s electricity production system, are struggling to keep up with the demand for power amid an unrelenting heat wave.” According to the newspaper, the state has been in a protracted heat wave and called on customers to conserve their electric use, “the eighth conservation request from the state grid operator in the last two weeks.”
ERCOT reported that on Wednesday it saw “more than 11,300 megawatts of outages….about double the ‘typical’ amount of natural gas and coal plant outages that ERCOT expected going into the summer.” The account cited Joshua Rhodes of the University of Texas Austin Energy Institute that the outages could reflect “strain felt by older plants after months of running at or near full capacity to keep up record-shattering electricity demand.”
The Texas generating fleet it heavily weighted toward natural gas and coal (including lignite), which make up about 70% of generating capacity. Solar and wind make up about 20% (with solar at 15% and wind at 5%). The rest are nuclear, hydro, and storage.
Jesse Jenkins, a researcher at Princeton’s Andlinger Center for Energy and Environment, commented on the social media platform Xitter, “11 gigawatts is roughly 1/8th of peak electricity demand in ERCOT btw. Not trivial.” Jenkins observed, “When resources that are supposed to be dependable aren’t, things can go bad fast. Coal & gas aren’t so dependable after all it seems.”
Travis Kavulla, NRG Energy vice president of regulatory affairs and a former Montana utility regulator, also commented on Xitter, “The idea that any resource is ‘supposed to be’ anything in Texas is wrongheaded because the market design doesn’t suppose anyone can do anything; it’s a market with no resource adequacy requirement & no capacity supply obligations.”
ERCOT faced a similar situation in the winter of 2021, only worse. Texas faced a nasty storm. Widespread failure of the gas-fired generation led to rolling blackouts. The stellar performance of the state’s wind generation saved ERCOT from a worse mess, as solar this summer came to ERCOT’s rescue. The bizarre structure of the Texas energy markets contributed significantly to the 2021 problems, according to work by the National Regulatory Research Institute.
According to NRRI, “The ERCOT market is based on a Hayekian philosophy — that price provides all of the information necessary to ensure efficient availability, dispatch, maintenance, and investment in generation and generator performance.” That didn’t work, as prices soaring to $9,000/MW failed to attract generation that was simply unable to produce power when needed. ERCOT is not subject to the “just and reasonable” price mandate of the Federal Power Act and the Federal Energy Regulatory Commission, according to NRRI. In 2021, that meant that “market dominators in the market exercised power to control prices, including firms in the natural gas market.”
In the wake of this summer’s Texas-sized troubles, ERCOT has been engaged in what appears to be feckless handwringing. The San Antonio Express News reported that ERCOT CEO Pablo Vargas noted growth in demand soared this summer by 7%, compared to normal load growth of about 1% annually. Among the factors in load growth are increased population, record temperatures, cryptocurrency mining, and the rise of giant data centers. The generating companies have aging fleets of gas and coal-fired plants, and aren’t replacing them with dependable generation, he said.
ERCOT is also blaming Washington for its environmental rules aimed at reducing CO2 emissions from fossil plants, which Vargas said could have a “significant material effect on the coal- and gas-generation fleet serving Texas.” ERCOT board chairman Bill Flores said, “Over half of our fleet today is these types of plants and these rules could take a substantial amount of that offline within a shortened period.”
ERCOT’s refusal to have robust connection to the rest of the nation’s grid, avoiding interstate commerce built on a long-standing fear of FERC, also causes supply problems. The state is unable to call on outside connections, where there may be power available. This policy of power autarky, based mostly on political posturing, has long caused Texas problems.
The San Antonio newspaper has called on ERCOT to abandon its isolationism, “noting that El Paso is part of the Western Interconnection, a massive grid that connects 14 states, as well parts of Mexico and Canada. Better connections to other grids could have reduced the duration and extent of the blackouts associated with the 2021 freeze.”
Predictably, ERCOT has responded to its latest woes by shuffling its deck chairs. The system announced last Friday (Sept. 1) that Woody Rickerson, previously vice president, system planning and weatherization, has been promoted to the newly created position of senior vice president & chief operating officer, overseeing grid operations, weatherization, planning, and commercial operations. Kristi Hobbs, previously vice president, corporate strategy & PUC relations, has been named vice president, system planning & weatherization, reporting to Rickerson. In this role, Hobbs will honcho transmission planning, generator interconnection activities, training, and weatherization.
So far, ERCOT appears to have no clear idea of where it is going. Flores said, “This is, I think, kind of a wakeup call to all of us to let us know, the future is not clear and how we get there is not clear, and we have a lot of work to do.”
–Kennedy Maize
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