Tag Archives: PJM

In the aftermath of a devastating winter storm, can we take lessons from Texas?

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Photo by Pixabay on Pexels.com

It is never fun to see our fellow Americans suffer, whether it’s from pandemic diseases or weather disasters. Our hearts go out to the residents of Texas who suffered without electricity and heat for days, some of them also without safe drinking water, and a few of them even dying from exposure, fires or carbon monoxide poisoning as they tried to keep warm. 

On the other hand, picking apart the preposterous excuses from Texas leaders seeking to avoid responsibility for the fully preventable power outages and the misery that accompanied them—well, that’s another matter. And it’s made so much easier by those leaders’ insistence on trying to score political points instead of admitting that at least some of the blame rests on their shoulders. 

Take Governor Greg Abbott, who went on Fox News to blame liberals for the debacle. Ignoring his state’s failure to plan for climate change and invest in power grid winterization, he told talk show host Sean Hannity the problem was actually the portion of the state’s electricity supply that comes from wind and solar. “This shows how the Green New Deal would be a deadly deal for the United States of America. Our wind and our solar got shut down, and they were collectively more than 10 percent of our power grid, and that thrust Texas into a situation where it was lacking power on a statewide basis.”

No one in Abbott’s echo chamber pointed out that a) solar actually did just fine, b) states like Iowa and South Dakota, with much worse winter weather, rely much more heavily on wind power than Texas does, yet there are no stories about their turbines seizing up and their grids collapsing, and c) if a shortage of ten percent shuts your grid down, you have way more problems than you can blame on the Green New Deal. In fact, the biggest factor in the grid failure was some 28,000 megawatts of coal, nuclear and gas power that went offline, as the Electric Reliability Council of Texas reported. 

For his part, former Governor Rick Perry preferred swaggering to problem-solving, saying in a blog post, “Texans would be without electricity for longer than three days to keep the federal government out of their business.” This seems to have been written at about the same time Governor Abbott was asking the federal government for disaster relief. 

And then there was Ted Cruz. I’m not referring to the farce of his skipping out on the post-storm misery to fly to Cancun, then pinning it on his daughters before high-tailing it home to make a show of handing out relief supplies. That incident just reminds us that no matter how deep our divisions, Americans can always find unity in our collective loathing of Ted Cruz.  

No, in this case I want to point to a pair of tweets from Cruz, almost exactly two years apart. February 13, 2019: “Success of TX energy is no accident: it was built over many years on principles of free enterprise & low regulation w more jobs & opportunities as the constant goal. We work to export this recipe for success t more & more states so that all Americans enjoy the same prosperity.” 

And here he is on February 22 of this year, reacting to news that free enterprise and low regulation had produced $5,000 electric bills for some customers in the aftermath of the storm: “This is WRONG. No power company should get a windfall because of a natural disaster, and Texans shouldn’t get hammered by ridiculous rate increases for last week’s energy debacle. State and local regulators should act swiftly to prevent this injustice.”

Luckily for us, lots of other people have been more interested in understanding what happened and preventing it from happening again than in trying to duck blame and score political points. The real story, it turns out, is simple at its core: “low regulation” meant the Texas grid and power providers did not adequately prepare for winter storms that climate change is making worse than they used to be. And because the Texas grid is cut off from the rest of the country (a feature, not a bug, to cowboy politicians), when the crisis hit there was no way to import power from other states that were better prepared.

Let’s take a closer look at what went wrong, how it could have been avoided, and what lessons it offers for the rest of us. 

The setup: an isolated grid with “free enterprise and low regulation”

The grid that serves Texas is uniquely isolated, which also gives it a unique vulnerability. The Electric Reliability Council of Texas serves most of the state, and no other states. Texans are proud of that (or were before this month), because it means there is no role for federal regulators like FERC. It also means that when power ran out, ERCOT couldn’t just import it from parts of the country with a surplus. Of course, states near Texas also suffered in the storm, so there may not have been a lot of surplus power to be had. It is worth noting, though, that the border city of El Paso fared better than the rest of Texas because it is not part of ERCOT but part of a larger regional transmission organization (RTO) serving several southwestern states.

Another feature of ERCOT is the low regulation that Ted Cruz celebrated. ERCOT keeps it simple for power generators. They get paid for the power they produce. Other RTOs have what is called a “capacity market” to reward generating plants just for being available to run when called on, and they penalize participants who fail to perform. ERCOT does neither. With a reserve capacity of only about ten percent and no way to guarantee generators would be available when needed, ERCOT had set itself up for trouble.

If generators had faced penalties for nonperformance, they could have—and almost certainly would have—spent the money needed to prepare their facilities for colder-than-usual weather. Winterization is a normal cost of doing business for a power provider in a northern state, but Texas winters are usually warm enough not to require it. If you won’t be penalized for not winterizing, you have little incentive to do it when you’re competing on cost with other power sellers. 

ERCOT was vulnerable for another reason. Demand for power in Texas is usually higher in summer, with air conditioners running, than it is in the state’s typically mild winters, so ERCOT plans for that. But in cold weather, gas-fired power plants face competition for fuel, when some of the gas supply goes for heating buildings. This month, when gas wells and pipelines also froze up, there simply wasn’t enough fuel to go around. ERCOT’s overreliance on gas proved to be a liability much greater than the smaller amount of renewable energy on the grid. 

The last important feature of the Texas system is retail competition. Electricity customers in ERCOT can choose among dozens of power providers. Some providers keep rates constant; others offer a variable rate that just passes through the wholesale cost of power, with only a small monthly fee added. When wholesale rates are low, the consumer saves money on a plan like that. But regulators didn’t insist on any safeguard to protect customers against the possibility of wholesale prices spiking to astronomical levels due to a power shortage. That’s exactly what happened in the aftermath of this month’s storm. 

That $5,000 power bill Cruz criticized? That’s unfettered free-market supply-and-demand at work. It’s a feature, not a bug. If you don’t like that feature, Senator Cruz, maybe low regulation isn’t for you. Helping consumers avoid power bills in the thousands of dollars would have been easy, but it would have required a little bit of regulation. 

The storm; or how nature takes no interest in political posturing

Well before this storm hit, ERCOT was fully aware of the vulnerabilities of its particular brand of laissez-faire operations. Ten years ago, in the wake of another winter storm, Texas operators were warned of the dire consequences that could ensue if they did not require generators to winterize operations. 

But, they didn’t, and this chart from the U.S. Energy Information Agency shows what happened to generation as a result. Before the storm, you can see natural gas and coal plants running less when high winds produce plenty of cheaper wind power, then cranking up when wind speeds drop. As the week goes on, power supply from natural gas plants increases to meet higher demand from colder weather, while other generation holds steady. Then suddenly you see every category of energy resource except solar drop in output, as critical components of some generating units freeze up and the units fall offline, while fuel supplies also dwindle. Some wind generation falls off, but so does coal, nuclear, and—especially—natural gas, just as they are all needed most.   

The storm was, to be sure, one of the worst winter storms ERCOT had ever faced. And the situation could have been worse. If operators had not proactively cut power to customers, demand in excess of supply would have damaged grid infrastructure so severely that large swaths of the population would have been without power for weeks or months. (Let us now praise faceless bureaucrats, for they just saved Texas.)

So it was bad, and could have been worse. Why didn’t Texas prepare for it, even after being warned? I have one theory. People who cling to simplistic notions that global warming “should” produce only warmer winters have a tiresome habit of pointing to cold weather as evidence that climate change isn’t real, but I think they also take secret comfort in the idea that if the planet is warming, extreme cold weather events will become less common, with less need to prepare for them. If your political philosophy requires you to see regulation as an evil, your own willful misunderstanding of climate science might provide all the excuse you’re looking for not to act. 

Could it happen here? 

Bad weather can happen anywhere, and it’s always safer not to gloat. That said, several features distinguish ERCOT from PJM, and Texas from Virginia. As noted before, PJM has a capacity market that rewards even otherwise-uneconomic generators for hanging around being ready to produce at short notice, and those generators are penalized if they don’t perform when needed. As a result, we are much less likely to see the kind of power shortage and price spikes that Texans experienced. (Not that PJM is without flaws. Its capacity market unnecessarily discriminates against wind and solar, its policies are making the integration of renewable energy harder than it ought to be, and it has incentivized such an oversupply of gas generation that consumers are paying higher prices for the inefficiency. But that’s another story.)  

Virginia also features monopoly power companies rather than retail choice. There is plenty of disagreement as to whether that is good or bad for consumers. The monopoly model requires strong regulation to ensure captive consumers aren’t being overcharged, and are being offered the products they want—like renewable energy. Critics (and I’m among them) have argued that Virginia isn’t doing enough on this front. 

On the other hand, the retail choice model depends on consumers being well informed, and also requires regulators to scrutinize the tactics of power providers and punish the ones who take advantage of unwary consumers. So, ironically, a deregulated electricity market requires strong regulation to protect participants. Strong regulation could have prevented Texas providers from offering residential customers a tariff based on wholesale prices, with risks that residents couldn’t easily understand or mitigate against.   

Texas was also more vulnerable to disruption because power generators were not required to winterize their plants or penalized for not doing so. Sure, a winterized plant would have turned a hefty profit in this storm, but in a more average winter, the extra cost would not have paid off. The option not to winterize isn’t a good one in PJM. As a result, when the power does go out in PJM, the problem is inevitably in the delivery infrastructure, not the generation.

Virginia’s system of vertically-integrated utilities means our utilities own their electric generation as well as the power lines. They can charge customers for building and maintaining those generating facilities, so they have less incentive to skimp on weatherization. That increases the reliability of those facilities. But even if several power plants in Virginia were to fail all at once, we could still draw power from more than 1,200 facilities across PJM, or even from the larger Eastern Interconnection. By design, Texas does not have that option.

One distinction between ERCOT and PJM that doesn’t make a difference, in spite of Governor Abbott’s claims, is the greater percentage of wind in ERCOT than in PJM. Wind actually makes up 23% of generation in ERCOT, more than perhaps Abbott wanted to admit, given that most of it came online under his watch. In PJM, wind makes up only about 3%. If Abbott were correct that wind turbines can’t handle winter weather, that would be a reason for more northern grids like PJM to avoid wind. But of course, Abbott’s claim is political wishful thinking divorced from reality. Wind turbines operate just fine in the much colder winters of Iowa, the Dakotas, Canada—heck, even in the frigid and stormy North Sea, where offshore wind ramps up production in winter. 

As for solar, you could see from the chart that it was not affected by the cold weather. Texas residents who were lucky enough to have both rooftop solar and batteries spent the aftermath of the storm bragging about never losing power. That’s a compelling argument not just for more solar in the generation mix, but for more distributed generation in particular, including solar microgrids and resilience hubs to help communities weather future storms. 

In the wake of this month’s storm, the independent Electric Power Research Institute (EPRI) analyzed what went wrong and issued recommendations for Texas grid operators. Among the unsurprising recommendations: ERCOT should do better planning for resource adequacy and increase its interconnections to other power systems so it does not have to go it alone. 

I would add one more recommendation: keep your ideology out of it. You can’t deliver reliable power that is also reasonably priced without robust regulation. If leaders refuse to learn from this winter, they’ll simply set up Mother Nature for another opportunity to mess with Texas.   

A version of this article appeared in the Virginia Mercury on February 25, 2021.

Nuking clean energy: how nuclear power makes wind and solar harder

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Dominion Resources CEO Tom Farrell is famously bullish on nuclear energy as a clean solution in a carbon-constrained economy, but he’s got it wrong. Nuclear is a barrier to a clean-energy future, not a piece of it. That’s only partly because new nuclear is so expensive that there’s little room left in a utility budget to build wind and solar. A more fundamental problem is that when nuclear is part of the energy mix, high levels of wind and solar become harder to achieve.

To understand why, consider the typical demand curve for electricity in the Mid-Atlantic, including Virginia. Demand can be almost twice as high at 5 p.m. as it is at 5 a.m., especially on a hot summer day with air conditioners running.

Average hourly load over a one-week period in January, April and July 2009. Credit B. Posner.

Average hourly load over a one-week period in January, April and July 2009. Credit B. Posner.

The supply of electricity delivered by the grid at any moment has to exactly match the demand: no more and no less. More than any other kind of generating plant, though, the standard nuclear reactor is inflexible in its output. It generates the same amount of electricity day in and day out. This means nuclear can’t be used to supply more than the minimum demand level, known as baseload. In the absence of energy storage, other fuel sources that can be ramped up or down as needed have to fill in above baseload.

Wind and solar have the opposite problem: instead of producing the same amount of electricity 24/7, their output varies with the weather and time of day. If you build a lot of wind turbines and want to use all the electricity they generate (much of it at night), some of it will compete to supply the baseload. Although solar panels produce during daylight when demand is higher, if you build enough solar you will eventually have to cut back on your baseload sources, too.

With enough energy storage, of course, baseload generating sources can be made flexible, and wind and solar made firm. Storage adds to cost and environmental footprint, though, so it is not a panacea. That said, Virginia is lucky enough to have one of the largest pumped storage facilities in the country, located in Bath County. Currently Dominion uses its 1,800 MW share of the facility as a relatively low-cost way to meet some peak demand with baseload sources like coal and nuclear, but it could as easily be used to store electricity from wind and solar, at the same added cost.

Without a lot of storage, it’s much harder to keep wind and solar from competing with nuclear or other baseload sources. You could curtail production of your wind turbines or solar panels, but since these have no fuel cost, you’d be throwing away free energy. Once you’ve built wind farms and solar projects, it makes no sense not to use all the electricity they can produce.

But if nuclear hogs the baseload, by definition there will be times when there is no load left for other sources to meet. Those times will often be at night, when wind turbines produce the most electricity.

The problem of nuclear competing with wind and solar has gotten little or no attention in the U.S., where renewables still make up only a small fraction of most states’ energy mixes. However, at an October 27 workshop about Germany’s experience with large-scale integration of renewable energy into the grid, sponsored by the American Council on Renewable Energy, Patrick Graichen of the German firm Agora Energiewende pointed to this problem in explaining why his organization is not sorry the country is closing nuclear plants at the same time it pursues ambitious renewable energy targets. Nuclear, he said, just makes it harder.

How big a problem is this likely to be in the U.S.? Certainly there is not enough nuclear in the PJM Interconnection grid as a whole to hog all the baseload in the region, and PJM has concluded it can already integrate up to 30% renewable energy without affecting reliability. But the interplay of nuclear and renewables is already shaping utility strategies. Dominion Virginia Power is on a campaign to build out enough generation in Virginia to eliminate its imports of electricity from out of state. And in Virginia, nuclear makes up nearly 40% of Dominion’s generation portfolio.

Now Dominion wants to add a third nuclear reactor at its North Anna site, to bring the number of its reactors in Virginia to five. If the company also succeeds in extending the life of its existing reactors, the combination would leave precious little room for any other energy resource that produces power when demand is low.

That affects coal, which is primarily a baseload resource. It would also impact combined-cycle natural gas plants, which are more flexible than coal or nuclear but still run most efficiently as baseload. But the greatest impact is on our potential for renewables.

This desire to keep high levels of nuclear in its mix explains Dominion’s lack of interest in land-based wind power, which produces mostly at night and therefore competes with nuclear as a baseload source. Dominion’s latest Integrated Resource Plan pretty much dismisses wind, assigning it a low value and a strangely high price tag in an effort to make it look like an unappealing option.

Dominion shows more interest in solar as a daytime source that fills in some of the demand curve above baseload. But given Dominion’s commitment to nuclear, its appetite for Virginia solar is likely to be limited. Already it insists that every bit of solar must be backed up with new natural gas combustion turbines, which are highly flexible but less efficient, more expensive and more polluting than combined-cycle gas, and add both cost and fuel-price risk.

Dominion’s seeming insistence that solar must be paired with gas to turn it into something akin to a baseload source is plainly absurd. It seems to be an effort to increase the cost of solar, part of an attempt to improve the company’s prospects of getting the North Anna 3 nuclear reactor approved in the face of its dismal economics.

Good resource planning would consider all existing and potential sources together, including using the existing pumped storage capacity in the way that makes most sense. We already know that North Anna 3 would be breathtakingly expensive. Evaluating it in the full context of other supply options will show it is even worse than Dominion acknowledges.

Dominion’s campaign to isolate Virginia’s power supply from the larger PJM grid also does a disservice to ratepayers. Keeping generation local benefits grid security when the generation is small-scale and distributed, but not when it’s a huge nuclear reactor sited on a fault line right next to two others. Otherwise, there is nothing wrong with importing power from other states. These are not hostile foreign nations. Pennsylvania is not going to cut us off if we don’t release their political prisoners.

In truth, it seems to be Tom Farrell’s plan to secure Dominion’s profitability for decades to come by walling off Virginia into a corporate fiefdom and controlling the means of production within it, like some retrograde Soviet republic. Utility customers, on the other hand, benefit much more from having our grid interconnected with PJM and the thousands of other power sources that help balance load and ensure reliability. One can only hope that Dominion’s regulators at the State Corporation Commission will see that.

Over the course of the next couple of decades, Virginia, like the rest of the U.S.—and indeed, the rest of the world—has to transition to an electricity supply that is almost entirely emissions-free. Very little planning has gone into making this happen, but several studies have shown it can be done. The Solutions Project offers a broad-brush look at how Virginia can combine onshore wind, offshore wind, solar and small amounts of other sources to reach a 100% clean energy future. Other researchers have done the same for PJM as a whole.

No doubt this will be a long and challenging journey, but the path we start out on should be the one most likely to get us to our goal. Nuclear seems likely to prove a stumbling block along the way, and an expensive one at that. Certainly, we shouldn’t make the problem worse.

Update: A number of commenters from the pro-nuclear camp have argued that nuclear is, or could be, more flexible than I’ve made it out to be. A new article in Utility Dive addresses this issue, concluding it is possible, but not easy, to make nuclear plants more load-following. France and Germany have succeeded to some degree, but U.S. nuclear plants pose greater challenges. “It can be done, but ‘the issue is that nuclear power plants weren’t designed to do that in the United States,’ said Jim Riley, senior technical advisor for nuclear operations at the Nuclear Energy Institute, an industry group that develops policy on issues related to nuclear energy.”

According to the article, some U.S. utilities are looking to tackle the challenge rather than retire their nuclear plants. These are nuclear plant owners that have to bid power into the wholesale market, where a nuclear plant, with its fixed operating costs, can’t compete with low-cost natural gas and renewable energy, especially at night. But of course, if you run a high-cost plant for fewer hours of the day, the average cost per kilowatt-hour increases.

Dominion doesn’t have to bid its nuclear into a wholesale market, so it has no incentive to try to run its plants flexibly. And given the astoundingly high cost of North Anna 3, curtailing its operation, and increasing the cost per kilowatt-hour produced, would be out of the question.

For electric power generation, the end of fossil fuels is in sight

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The rap on renewable energy is that it’s too variable to meet society’s demand for a constant supply of electricity. The answer to the problem turns out to be: More renewables.

111022-N-OH262-322Climate change is acting like an ever-tightening vise on our energy options. Each year that passes without dramatic decreases in our use of carbon-emitting fuels means the cuts we have to make simply get more drastic. By 2030, say experts, we must entirely replace coal with efficiency and renewable energy, or fry. Even the most intrepid environmentalists wonder if it can be done without huge price hikes and wholesale changes in how we live and use energy–changes that society may not accept.

A new study out of the University of Delaware shows it is possible to power the grid 99.9% of the time with only solar and wind energy, at a cost comparable to what we are paying today. This counters the conventional wisdom that we will always need large amounts of fossil fuel as a backup when the wind doesn’t blow and the sun doesn’t shine. It also means the goal of getting largely beyond fossil fuels by 2030 is not just achievable, but practical.

The study focused on a regional transmission grid known as PJM, which encompasses parts or all of fourteen states, mostly in the Mid-Atlantic. Researchers ran 28 billion computer simulations to find the most cost-effective combinations of wind and solar that could power the entire grid, at the least possible cost and with minimal amounts of energy storage. The winning combination relied on natural gas turbines for backup on only five days out of the four years modeled.

The study authors looked for the least cost taking account of carbon and other external costs of fossil fuels, which are not being accounted for today, but they also assumed no technology improvements over time, making their cost estimates conservative overall. All the least-cost combinations used much more storage than we have today, but needed it for only 9 to 72 hours to get through the entire four years modeled.

The secret to dealing with the inherent variability of wind and solar, it turns out, is to build even more wind and solar. One wind turbine is unreliable, but tens of thousands spread across a dozen states greatly reduces the variability problem, and tens of thousands of wind turbines balanced with millions of solar panels is better still. To get to 99.9% renewables, you keep adding wind turbines and solar panels until you are producing three times the electricity that you actually need to meet demand. To power the grid with renewables just 90% of the time, you would have to produce “only” 1.8 times the electricity needed. (And yes, we have the windy sites and the sunny places to support all those projects.)

While it may sound strange to build more generation than you need, that is already the way grid operators ensure reliability. To take one example, if you were in Virginia when the “Big One” struck in 2011, you will recall that the earthquake caused the North Anna nuclear plant to shut down for four months. Nuclear energy provides a third of the electricity in Dominion Virginia Power’s service territory, and yet the lights stayed on. That’s because the grid wizards at PJM simply called on other power sources that had been idle or that had spare capacity.

The other component of reliability is the ability to match demand for power, which rises and falls with the time of day, weather, and other factors. So-called “baseload” plants like nuclear, coal, and some natural gas turbines don’t offer that flexibility and must be supplemented with other sources or stored energy. PJM currently uses more than 1,300 different generating sources, as well as about 4% storage in the form of pumped hydro. The right combination of other sources can replace baseload plants entirely.

wind turbine-wikimedia

Pairing wind and solar improves their ability to meet demand reliably. Onshore wind tends to blow most strongly at night, while solar energy provides power during the peak demand times of the day. Offshore wind power is also expected to match demand well. Combining them all reduces the need for back-up power.

But until now policy makers have assumed that solar and wind won’t be able to power the grid reliably, even when combined and spread out over PJM’s more than 200,000 square miles, and with the addition of wind farms off the coast. Critics have insisted that renewable energy requires lots of back-up generating capacity, especially from some natural gas turbines that can ramp up and down quickly. New gas turbines have even been designed specifically to integrate with renewables in anticipation of increasing amounts of wind and solar coming onto the grid.

This makes the work of the U. Delaware researchers a game-changer by showing that wind and solar can be backed up primarily by more wind and solar. And so we can begin planning for a future entirely without fossil fuels, knowing that when we get there, the lights will still be on.