What’s up with the Texas power grid?

OWOE Staff: So what’s going on with the power grid in Texas? Last week the state was hit by a polar vortex winter storm (Uri) that brought snow and ice and record low temperatures. Such storms aren’t especially rare – it snows and ices in Houston about every ten years. But this time it created one of the biggest power outages in US history (Fig 1), and the Texas power grid came within minutes of failure. Then the real fun began. The Governor blamed the power failures on the wind turbines in West Texas freezing up, but had to retract the comment almost immediately when the grid operator, ERCOT (Electric Reliability Council of Texas), announced that the majority of the power outages were due to gas supply shortages and freezing of the conventional thermal power plants. A former Texas Governor claimed that Texans would rather endure power failures than have more regulation of the industry. Senator Ted Cruz, from Texas, who had a history of denouncing renewable energy as the cause for California’s power outages fled the cold to take his family to Cancun and immediately had to fly back due to public outrage. A photo of a helicopter deicing wind turbines in Texas went viral as an example of renewable power being dependent on fossil fuel and chemicals, until the photo was identified as actually being an extreme case of deicing an old-style turbine in Sweden from 2014. Texans who signed up for electricity plans that charge based on wholesale electricity prices are now facing bills in the thousands of dollars. Etc, etc.

Fig. 1 – Texas 2021 blackout compared to largest blackouts in US History based on customer-days without power (original chart of 10 largest from Rhodium Group, modified by OWOE)

Although the tendency to jump into the political fray is great, OWOE will continue to stay above that and focus on energy fundamentals. The Texas power grid is unique in the US as the state essentially manages its electrical power independently of the rest of the country (see OWOE: How many electrical grids are there in the US?) By not engaging in the transmission of power across state lines, the Texas power grid does not fall under US regulations and oversight and is managed by ERCOT, a nonprofit corporation that is overseen by the Public Utility Commission of Texas and the Texas Legislature. Texas lawmakers deregulated the energy market in 2002 as a means to foster innovation and lower energy prices. This has been very successful, resulting in a competitive, market-based approach to pricing electricity that has allowed Texans to enjoy some of the lowest electricity prices in the US (e.g., Texas average retail price in 2019 per the EIA was 8.6 cents/kWh compared to California at 16.9). However, it now appears that this free-wheeling approach has led to too much focus on cost and not enough on resilience.

The problem with power generation in Texas during the storm was not the cold weather per se – it was being unprepared for the cold weather. Wind turbines regularly operate in the cold, down to minus 40 deg C or more, including in Iowa, Canada, and even Antarctica. However, to do so requires additional investment costs in terms of heating and deicing systems and engineering design. North Dakota gas wells were better designed for the cold and didn’t freeze up during the storm. Similarly, thermal and nuclear power plants operate successfully in every cold climate in the world, except apparently in Texas. But all power plants are dependent on motors, water lines, chemical supply lines and various other systems that can be susceptible to the cold and must be designed appropriately. Your OWOE editor was the project manager for the design and construction of a coal plant in central Texas that became operational in 2009. The operator, Luminant, invested in insulation and heat tracing throughout the plant to prevent against freezing. As a prime example of the weakness of Texas’ low cost approach, the Sandow 5 plant, which also boasted advanced pollution control equipment, was shut down in 2018 as “…the standalone economics of the Sandow complex no longer support continued investment in the site in this low wholesale power price environment” (Vistra Energy). ERCOT determined that the plant was not required to support ERCOT transmission system reliability, and, ultimately, 585 MW from an older, more polluting and less reliable, but cheaper to operate, coal plant was kept on the grid. Clearly, in Texas it doesn’t pay to invest dollars in plants or equipment for improved performance if it impacts short term operating costs.

After the winter storm of February 2011, the Federal Energy Regulatory Commission (FERC) and the North American Electric Reliability Corporation (NERC) studied the outages and curtailments that arose across Texas and New Mexico. Although not as serious as this recent storm, it was certainly a harbinger of what can and did happen. The report identifies problems with winterization of generating plants and the gas supply system and lack of sufficient reserve generation. The report also references back to recommendations arising from a 1989 cold weather event aimed at improving winterization practices. These recommendations were not mandatory, and many of the generators that experienced outages in 1989 failed again in 2011.

The bottom line – Texas had cold weather power generation problems in 1989 and 2011 that were extensively studied, but recommendations for improving resiliency of the grid were not mandated by ERCOT nor the Texas Legislature and were ignored by the utilities. The situation last week shouldn’t come as a surprise to anyone involved in power generation in Texas. Low electricity costs are great, but the cost for resilience to prevent such occurrences in the future should be built into the system for the benefit of residents, commerce and industries.

It should be very straightforward to improve the Texas grid without abandoning all the benefits that currently exist. 1) Let the engineering community review the past reports in order to condense many hundreds of pages of documents into the fundamental requirements for each component of the power grid and supply chain, 2) have the politicians mandate such recommendations with a reasonable timeline for implementation, 3) have ERCOT proactively monitor implementation, and 4) let the market-place reset the cost of Texas electricity at a rate that provides both short term benefits and long term resiliency.

Meanwhile, we can all chuckle at the expense of Gov Abbott, Former Gov Perry, and Senator Cruz and praise NY Representative Alexandria Ocasio-Cortez, who had the integrity to put aside the antipathy of her detractors from Texas and raise funds for the people of Houston who are suffering from the results of this Texas-created disaster. (Ok, maybe we did have to make one political comment!)

Time for a New Energy Policy

OWOE Staff: It’s a new year, we have a new president and administration, and we have new hope that the plan to vaccinate Americans is going to finally end the pandemic. What we don’t have is new thinking on what this country should be doing for a long term, rational and strategic energy policy. OWOE believes it is the right time to propose a comprehensive energy policy that balances America’s needs with the planet’s needs and is based on sound economics, realistic technology and good common sense. The OWOE energy policy combines several key elements, including: firm commitment to dramatically reduce dependence on fossil fuels in a planned and rational manner, sustainable investment in renewable technologies, and establishment of a North American Energy Alliance (NAEA) between the US and Canada to aggressively develop and globally sell our existing energy resources.

Continue reading Time for a New Energy Policy