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.
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!)
Good morning Bill!
We were fortunate not to lose power during the freeze last week,
My stand by generator never kicked on.
What’s your take on states like California prohibiting natural gas utilities in new housing developments?
Have you talked to Chuck lately. He had problems at his house during the freeze. His subdivision gas system is propane.
Enjoy reading your stuff.
Myron
Myron, glad you survived the big storm. You ask a good question about government mandates. I’m all for the world transitioning from fossil fuels, but recognize that it will take time for that transition. Are there places for government mandates? Certainly, if used appropriately. A mandate can help accelerate a trend that is already gaining traction in society. For example, California and other states and countries are starting to implement future bans on gas powered autos. A few years ago that would have been premature because the products weren’t available, and people weren’t going to embrace EVs. Fast forward to the present and Tesla has proven that an EV can be designed and built that is superior to an ICE vehicle, prices are falling to the point where initial price parity is just around the corner, and other manufacturers are now ready to follow the market in that direction. In that case a government mandate helps speed a process that would get us there anyway. Regarding all electric homes – my wife and I hate electric stoves, as a good example, and I don’t think she would ever consider buying a home that didn’t have the ability to install a gas stove. Maybe induction burners are that piece of technology that would get us over the hurdle, but we’ve never actually used one. And electric water heaters just don’t function as efficiently as gas heaters. For me, the consumer products and cost aren’t quite there yet. Rather than these sorts of mandates, I’d prefer a carbon tax that truly addresses the societal cost of burning gas. Then let the market drive behavior and foster innovation.
Bill, as you know, others may not, about 25% of the electrical power in Texas is provided by Regulated Utilities, not via ERCOT. Where I live in The Woodlands about half of the homes and commercial buildings get their power from Entergy, a Regulated Utility. The other half from Center Point Energy, an ERCOT member.
I was “fortunate” in that my Regulated Provider, Entergy went offline only once for 12 hours during the coldest time. Based on discussions with my golfing buddies that is just marginally better than the ERCOT provider Center Point Energy did in this area. But then the Entergy Generation stations are all east of here where the storm effects were signifantly less. Of course to be fair, I have also been “fortunate”, since 1998 to pay 20 to 30 percent more for power than those in the ERCOT zones do. I am having a hard time seeing the benefit to being connected to a Regulated provider. (I have no choice).
As you note in the initial posting this does bring to the fore the question of cost/benefit for resiliency. Should the power generation stations and wind turbines have been winterized like in the Dakotas as some media “experts” advise? Maybe, maybe not. But that should be the result of a rational process not a reaction to a crisis. ( Good luck on that!) Just because it can be done doesn’t mean it should be done.
I note your efforts to keep politics to a minimum in this blog. I commend you. But I would comment that it seems a little too much to impute purity of motive to a vocal critic of ERCOT (Congresswoman Cortez– seems like at least a bit of political opportunism to me ) on the one hand , and then impugn the character, intelligence and ancestry of ERCOT supporters on the other.(Country Yahoos—Really? Look up the bios and resumes of the women and men who serve on the ERCOT Board. They are certainly not Yahoos. Some may be country. Is that bad?)
I enjoy getting and reading OWOE. Keep up the good work. How do you have time?
Let me know if you get back to Houston. I am mostly here.
Regards
Gordon
Gordon, thank you for the thoughts and information. The situation is certainly a complex one. I’ve historically been a strong ERCOT fan as it seemed that they had done an impressive job of building a complex, market-based approach to electricity generation and distribution that truly delivered. A prime example of that was the new transmission lines from W Texas to harnass the wind power that they pushed for. That type of foresight is hard to find in either a public or private entity. What I didn’t realize, however, is how some of the more recent decisions seemed to weigh low cost over resilience (at least that’s how they look in hindsight). My first inclination of this was when they allowed Luminant to shut down Sandow 5. Having lived throught the design and construction of that plant, there is no doubt in my mind that it should have been kept running and one of the 30+ years old plants shut down instead. That would require some sort of mechanism to value a modern plant that incorporates design measures for greater resilience or that pollute less than older plants but may cost more to operate because of location (i.e., transmission cost) or any other parameter. One can do this either through regulation or some form of market-based approach that imputes realistic values for such features. Of course, that’s not an easy task, especially when politics gets in the middle of the debate. There’s certainly enough blame to spread around to everyone – the legislature for taking the easy approach which is what politicians typically do, ERCOT for not pushing for what I’m sure many felt was the right thing for fear of the politicians, and the public for only looking at the low rates on their most recent bill. As for AOC – I have no doubt that she created the photo op. But whether or not you support her (very) progressive agenda, you have to give her credit for political savvy. Where was Ted Cruz last year when California was burning, and we were having rolling blackouts? Instead of showing any (even false) empathy toward the people who suffered, he was throwing raw meat to the anti-renewables crowd. Like her or not, I believe her approach plays better on the world stage. Bill
Well said Bill.
My understanding is that the decision to disconnect the grid from the rest of the US was taken long, long time ago, possibly the 30s, with the idea that Texas is self sufficient with its abundance of fossil fuels and keeping the Texas grid independent and isolated from the rest of the US, allowed Texas to escape Federal oversight.
I think that we live now in a different era, where power can (and should) be traded across state lines, industry standards should be universal and independent of state politics. Country yahoos (both in-state and out-of state) should not be running our lives (reference: the domiciles of the ERCOT Board).
Gawd!… It sounds like socialism! Doesn’t it? Before you agree, show me the Texas specification for the F22s and the F35s that the Texas Guard flies… What? No? They don’t have Texas specific spec? Don’t get me started…