Blackouts In Texas

Blackouts In Texas

Amidst the despair, inconvenience, and suffering, it is natural to get charged up, seek answers, and get restless to do something. Sadly, before a full post-mortem is done by the experts, a lot of overly simplified answers and theories are floating around which quickly compress and reduce the matter to a blame game of sorts (e.g., here , here). Below is a list of statements that I have been hearing and have attached my brief reactions to them. At this stage, these are simply my personal points of inquiry, which will get revised as I learn more. But I do believe there are lessons to be learned.

1. Renewables particularly wind and solar has let Texas down: Well, renewable generation was lower than expected. Only about 800-1500MW wind was online out of 30,000MW. (During winter the expectation, about 10% of total capacity is expected to remain online). Solar generation was non-existent (as one would expect at night, for instance). But then one also needs to ask – compared to what? About 30,000 MW thermal capacity was offline as well due to gas shortages and a tripped nuclear unit (STP). So it is true a lot more renewables were offline than expected but then gas and nuclear generation also went offline. If renewables were a let-down, then thermal generation did not perform anything better.

2. Interconnection with the rest of the US grid could have prevented this: Texas is not synchronously connected to the rest of the US grid. However, there are asynchronous connections that provide a few GWs of power. Before asserting that Texas’ isolated grid needs to be done away with, we should also ask how much surplus the neighboring states had if it had to support the MW shortfall. Perhaps not enough to address the current situation.

3. Gas supply was disrupted: Gas supply depends on the nature of the contracts the plants have. If there were no firm contracts for non-interruptible gas, then gas supply was cut off and diverted to others. If we assumed that all the gas contracts were firm (a big if) – was there enough supply pressure to support all the gas generators to cover the load, when units were running high to meet the cold weather demand. It is not new that gas supplies get disrupted in cold weather. So what did we miss?

4. Reliance on an energy market only; we should have a capacity market as well: Back to the old debate. In Texas, generators are not incentivized to be ready with their supply when they are not called to generate. Getting wrapped up in the debate can be a tempting diversion. What needs to be questioned is the underling assumption of running an energy only market – do we really have supply coverage under all these scenarios? Given that there is no pumped or large scale storage, and with unsecured gas supply, limited interconnections and transfer capacity, even if the spot price rises to $9000/MWh, where does the price signal go to unlock new capacity?

5. ERCOT messed it up: This is an easy point to make. But bear in mind all ERCOT can do (like many ISOs) is to run scenarios and produce reports and guidance – that at best can point and influence for resource adequacy. But how much teeth does ERCOT have to build generation, solve short term capacity problems, and mitigate cold weather conditions? In Texas, it is the market participants who determine whether to invest in new capacity. Whether there can be a generation market for extreme weather situations, attractive enough to draw private investment, is something to think about. If a market cannot exist, does the need and necessity go away? Who needs to fill in the gap?

6. It is all about poor planning: Looking backwards, we can always find studies and scenarios that expose capacity deficiency and low reserve margin conditions. But how much do we believe those scenarios will actually happen? From Fukushima to Texas, such “planning gaps” are easy to find, after the fact. It boils down to some version of a) the extreme events were believed to occur very rarely (translation – never!) b) it was too expensive to hedge the risk. As a former client once told me, “we care only about the risk we can handle”. The implied comment was – don’t talk about risks that we cant afford to hedge. Harsh as it may sound, we understand the need fully only afterwards – once have lived through with the pain and scars.

Is Texas just a one-off case of short term capacity shortage or is there a pattern and a broader lesson here? Is there something in common between the Fukushima nuclear incident, the California blackouts recently, and even the response to the Covid-19 situation?

At a minimum, what these events show is that what is assumed to be once in a lifetime event is actually happening once in a decade or even more frequently. Perhaps we are not able to grapple with uncomfortable truths. Perhaps we are not paying much heed to reality. As Richard Feynman in his Challenger Shuttle Appendix wrote, that a grounding in reality is essential when we use probabilities for reliability engineering, and ultimately put faith in machinery. What I would like to see is a call for a common understanding and agreement among the stakeholders – utility planners and engineers, ERCOT, investors, policy makers and politicians – on the likelihood of these extreme events and what we are asking the customers and citizens to bear. As studies and investigations begin to shed light, I just hope that these teams take a closer look into probability of such extreme events and what is means for a power system that is in transition from a fossil to a non-fossil future. Tragic as it is, this is not just a Texas issue – but a lesson for us all.

First published in Linkedin

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