Failure and Lessons - iogcc.ok.gov

The Feb ‘21 ERCOT Grid Failure and Lessons

Presentation by Gregg Goodnight at IOGCC Santa Fe Conference, 11/9/21

The Feb ‘21 ERCOT Grid Failure Focus of Today’s Presentation

➢Review of Causes, Immediate and Systemic➢Renewable Energy Intermittency➢Future of Texas Grid and Public Policy Impacts

Gregg Goodnight, TRCS and CO2 Coalition Member

Dispatchable power: When You Need it, You Need it!

3

Feb ‘21 Outage – TRCS Lessons Learned

1. Reliability of the ERCOT electrical grid is being slowly compromised by the cumulative impact of public policy favoring renewable energy additions

2. Intermittency is an inherent aspect of renewable power and needs to be addressed by public policy

3. Adequate levels of dispatchable power need to be maintained through appropriate policy for power pricing

4

The ERCOT System

Source: ERCOT

+ 1,800 Participants86 GW demand at peak+710 generation units+46,500 miles HV transmission lines+ $0.7 billon new trans. projects 2020 ($8B total)

ERCOT

Grid Facts Renewables

Texas leads US in wind capacity (30GW); 20% of US13,000 turbines, 150 farms Record 23.6 GW (25Jun21) Grid solar 4.9 GW capacity (growing to 19 GW by ‘25)Batteries 0.3 GW capacity

ERCOT Power Supply - 2020

SourceCapacity, GW

Avg. Utilization

TWh/yr Avg. GW%

Nominal Capacity

% of Delivered

Power

Wind 31.4 31.7% 871 9.9 28.1% 22.9%

Solar 4.9 20.3% 87 1.0 4.4% 2.3%

Hydro 0.5 26.5% 12 0.14 0.5% 0.3%

Coal 13.5 57.7% 685 7.8 12.1% 18.0%

Natural Gas 56.1 35.3% 1,738 19.8 50.3% 45.6%

Nuclear 5.1 91.8% 415 4.7 4.6% 10.9%

Total 111.7 38.9% 3,809 43.4 100% 100%


SourceCapacity, GW

Avg. Utilization

TWh/yr Avg. GW%

Nominal Capacity

% of Delivered

Power

Wind 31.4 31.7% 871 9.9 28.1% 22.9%

Solar 4.9 20.3% 87 1.0 4.4% 2.3%

Hydro 0.5 26.5% 12 0.14 0.5% 0.3%

Coal 13.5 57.7% 685 7.8 12.1% 18.0%

Natural Gas 56.1 35.3% 1,738 19.8 50.3% 45.6%

Nuclear 5.1 91.8% 415 4.7 4.6% 10.9%

Total 111.7 38.9% 3,809 43.4 100% 100%

Average load is 43GW and capacity is 112GW, the issue is generating power as you need it and where you need it


SourceCapacity, GW

Avg. Utilization

TWh/yr Avg. GW%

Nominal Capacity

% of Delivered

Power

Wind 31.4 31.7% 871 9.9 28.1% 22.9%

Solar 4.9 20.3% 87 1.0 4.4% 2.3%

Hydro 0.5 26.5% 12 0.14 0.5% 0.3%

Coal 13.5 57.7% 685 7.8 12.1% 18.0%

Natural Gas 56.1 35.3% 1,738 19.8 50.3% 45.6%

Nuclear 5.1 91.8% 415 4.7 4.6% 10.9%

Total 111.7 38.9% 3,809 43.4 100% 100%

Intermittent power was 25% of delivered

power in 2020


SourceCapacity, GW

Avg. Utilization

TWh/yr Avg. GW%

Nominal Capacity

% of Delivered

Power

Wind 31.4 31.7% 871 9.9 28.1% 22.9%

Solar 4.9 20.3% 87 1.0 4.4% 2.3%

Hydro 0.5 26.5% 12 0.14 0.5% 0.3%

Coal 13.5 57.7% 685 7.8 12.1% 18.0%

Natural Gas 56.1 35.3% 1,738 19.8 50.3% 45.6%

Nuclear 5.1 91.8% 415 4.7 4.6% 10.9%

Total 111.7 38.9% 3,809 43.4 100% 100%

Natural gas expected to be <30% by 2025


SourceCapacity, GW

Avg. Utilization

TWh/yr Avg. GW%

Nominal Capacity

% of Delivered

Power

Wind 31.4 31.7% 871 9.9 28.1% 22.9%

Solar 4.9 20.3% 87 1.0 4.4% 2.3%

Hydro 0.5 26.5% 12 0.14 0.5% 0.3%

Coal 13.5 57.7% 685 7.8 12.1% 18.0%

Natural Gas 56.1 35.3% 1,738 19.8 50.3% 45.6%

Nuclear 5.1 91.8% 415 4.7 4.6% 10.9%

Total 111.7 38.9% 3,809 43.4 100% 100%

Nuclear supplies baseload power

10

Current PUC Pricing Policy

➢“Energy Only”, payment for delivered power. Day-ahead bidding for supply of regional power; no capacity component for pricing

Market design after deregulation in early 2000’s:

➢Texas is not in total control: Impact of Federal Production Tax Credits and Investment Credits and Carbon Offsets distort market

➢Intent →Market signaling pricing supporting re-investment

➢Reality →Emergency pricing with short-term spikes. $9,000 MWh

Along with the PTC and Carbon Offset pricing, Federal Investment Tax Credits

of 26-30% over the last 20 years has had a cumulative impact on pushing new capacity almost exclusively towards

renewable power additions

➢The week ahead – warnings that this was going to be bad! Peak load near 75GW.

11

2021 Grid Outage- Big Picture

➢Maintenance outages for coal/gas deferred from fall ‘20 – lack of manpower due to COVID restrictions (10-12GW unavailable power from thermals including coal, and gas)

Pre-storm Activity

12

2021 Grid Outage- Big PictureCritical Period

Storm Uri Late 2/14 to Early 2/15

➢ 76.8GW Load seen! Load shedding late evening ➔ Ramp up of dispatchable power as wind and solar 9.1GW➔ 5.3GW

➢ Dispatchable power supply trips

➢ Loss of frequency control

13

House Process HR8019

Sponsor A.O. Cortex (D-NY)

Co-sponsor None

Introduced 8/11/20

Committee Referral Science, Space and Tech; Judiciary, Energy and Commerce, 3 others

Status Hasn’t made it out of committee

Prognosis Likely to be carried into the 117th Congress pending Nov ‘20 election

Source: ERCOT

Fre

qu

en

cy, H

z

Time, February 15, 2021, AM

Loss of Frequency Control

1:23 2:031:531:431:33

60.0

59.4

14

Immediate Cause of Failure

During critical period from 01:00AM to 02:00AM on 2/15/21, lack of

dispatchable power combined with increasing system load and loss of

power from wind resulted in loss of control of system frequency

15

Spin and Public Perception

Texas legislative hearings → focus on lack of winterization following the 2011 freeze: not mandatory, not strong enough

“The focus on wind is a red herring”- Dan Cohan, Rice U.

“The extreme cold is causing the entire system to freeze up” – Jason Bordoff, Columbia U.

“…take a hard look at the state’s deregulated marketplace and fix its flaws”. - Dave Lieber, Dallas Morning News, 2/19/21

“The blame falls on Abbott.” “Please do not fall for Abbott’s tricks” – Democratic Party Chair Gilberto Hinojosa

16

Spin and Public Perception“… it was natural gas that basically shut down in Texas that caused all of that of that horrible carnage for people, it was awful.” CNN Interview – 9/12/21Senator Joe Manchin, D, West Virginia

17

Power Contributions

0%

20%

40%

60%

80%

100%

120%

14:0015:0016:0017:0018:0019:0020:0021:0022:0023:00 0:00 1:00 2:00 3:00

Wind

Natural Gas

Solar

Nuclear

Coal

2/14/21 2/15/21

Critical Period

Source: ERCOT data and TNRCC calculations

Op

era

tin

g R

ate

%

Nam

ep

late

Cap

acit

y

18

Dispatchable vs Weather Dependent Power

0%

20%

40%

60%

80%

100%

120%

14

:00

15

:00

16

:00

17

:00

18

:00

19

:00

20

:00

21

:00

22

:00

23

:00

0:0

0

1:0

0

2:0

0

3:0

0

4:0

0

5:0

0

6:0

0

7:0

0

8:0

0

9:0

0

10

:00

11

:00

12

:00

13

:00

14

:00

15

:00

16

:00

17

:00

18

:00

19

:00

20

:00

21

:00

22

:00

23

:00

24

:00

Sunday, 2/14/21 Monday, 2/15/21 AM

Composite Wind and Solar

28%14%

0.8GW 2%

Coal, gas, nuclear rates adjusted for maintenance outages

Source: ERCOT

Coal, gas, and nuclear rates, not adjusted for maintenance outages

Op

era

tin

g R

ate

, % o

f N

ame

pla

te C

apac

ity

19

Texas Wind Impact during Storm Uri

0

5

10

15

20

25

30

35

Avg

Win

d V

elo

city

, MP

H

Corpus Christi

Amarillo

Weighted Avg

February 14, 2021 February 15, 2021

Wind Power is a function of the cube

of velocity!

20

Northern Hemisphere Pressure Anomaly

North America

Sea Level, Feb. 14-18, 2021 mb

Hig

h P

ress

ure

Low

Pre

ssu

re

21

High Pressure Over North America

➢After Uri moved through, wind turbines were idled all the way up to Canada, including fully winterized units

➢A high-pressure front stabilized over Texas and the US plains region

➢High pressure weather patterns are common in both winter and summer and impact wind velocities

Hig

h P

ress

ure

Low

Pre

ssu

re

22

Instability - Minor Contributors



Co-sponsor None

Introduced 8/11/20




➢Freezing of wind turbines

➢Freezing of gas wells

➢Nuclear reactor outage

➢ERCOT not connected to national grids

23

Issues with Thermal Power



Co-sponsor None

Introduced 8/11/20




➢Lack of proper prioritization of supply of electricity to NG supply chain, heat tracing/compressors. Magnitude?➢Natural gas supply to a power plant was shut due to

interruptible power contract➢One plant incurred low voltage trip ahead of a frequency trip➢Coal in railroad cars iced over➢Poor timing of shutdowns, e.g. pigging of NG supply line➢Net impact of low NG header pressures?➢Too many plants in planned outages

24

Calls to Fix the Grid



Co-sponsor None

Introduced 8/11/20




➢Hearings held in Texas House (2/25-26) and US House (3/24)

➢Focus on 2011 freeze and need for “winterization”

➢Texas Legislature passes non-prescriptive SB3, (‘fix the grid’ bill). → broad authority to PUC to restructure power pricing policy.➢Gov. Greg Abbott issues a strong directive to fix underlying issues➢Multiple Federal initiatives in Washington have the potential to

totally impact the reliability of the ERCOT grid, especially a national renewable mandate (100% by 2035?)

25

Intermittency of RenewablesTake-home messages for today!

➢Renewable intermittency was one of the three major components of ERCOT February ‘21 crash➢Wind and solar fed to the grid on an “as-available” basis➢Who owns this intermittent nature of renewables? – In practice,

costs and risks are socialized. Grid customers pay for the excess costs and bear incremental risks➢Who benefits? – In practice, electricity providers that market “100%

renewable energy” packages. Companies that tout 100% “clean” power.

26

Intermittency of Renewables

➢Wind and solar advocates argue that all power sources are intermittent; they cite planned and unplanned thermal outages (gas/coal/nuclear) ➢This is a false equivalence➢Intermittent nature of wind and solar are

weather-related and non-controllable. They are routine on a daily, monthly, and seasonal basis. This is in addition to operational outages

27

Engineering the Grid for Reliability➢ Intermittency of renewables must be addressed!➢ ERCOT is short a minimum of 10GW of dispatchable power➢ Berkshire Hathaway pitched addition of 10GW natural-gas

fired power if profitability is guaranteed ➢ Best technical solution may be RICE (Reciprocating Internal

Combustion Engines) like those seen at South Texas Electrical Co-op and City of Denton

➢ Requirements for new weather-dependent power sources to provide back-up at their own expense

28

Feeding Electrons into the Grid; Are All Electrons the Same?

Current PUC pricing policy: All electrons fed into the grid are priced the same. There is no premium for consistency of output or dispatchability. External support from PTC’s and carbon credits tilt playing field

29

Monthly Abilene Wind Speed



Co-sponsor None

Introduced 8/11/20



Prognosis Likely to be carried into the 117th Congress pending Nov ‘20 election4

5

6

7

8

9

10

11

12

13

14

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Avg

win

d v

elo

city

, MP

H

2021 YTD

3-yr Avg.

Source: wunderground.com

30

Example: August Doldrums



Co-sponsor None

Introduced 8/11/20




0

5

10

15

20

0:1

5

1:0

0

1:4

5

2:3

0

3:1

5

4:0

0

4:4

5

5:3

0

6:1

5

7:0

0

7:4

5

8:3

0

9:1

5

10

:00

10

:45

11

:30

12

:15

13

:00

13

:45

14

:30

15

:15

16

:00

16

:45

17

:30

18

:15

19

:00

19

:45

20

:30

21

:15

22

:00

22

:45

23

:30

GW

win

d

Reported Wind Power for ERCOT, August 2020

8/1/2020 8/15/2020 8/30/2020

Aug 15thAug 30th

Aug 1st

31

UK Power Prices, 2021➢ UK coal consumption in ‘06 was

51MM MT, in ‘19 was 10MM MT with 70% imported

➢ UK power depends on wind turbines in North Sea

➢ Gas is the primary energy back-up for both UK and Europe

➢ Lack of power from low wind resulted in high demand for natural gas that was costly and unavailable

➢ Typical residential prices for power have been Euro100-200/MWh

➢ Gas-based chemical industry in the UK shut down due to non-competitive position

32

Costs of Intermittent Operations

➢Capital cost of back-up power➢Higher transmission costs due to remote power sourcing➢Less timing flexibility of timing for coal, gas, and nuclear plants for

planned maintenance outages➢Higher unit fixed costs due to lower operating rates➢Reduced economics for disincentives for optimum maintenance

Are renewable power costs competitive? LCOE (levelized cost of energy)benchmark is cited.

Levelized Costs (LCOE) (from EIA or IRENA)

Estimates do not include these socialized costs

33



Co-sponsor None

Introduced 8/11/20



Prognosis Likely to be carried into the 117th Congress pending Nov ‘20 electionERCOT, EIA, TRCS

projections

Power Generation

38%

62%

Federal Subsidies for Electrical Power

Source: TPPF, Federal Energy Subsidies and Support from 2010 to 2019, July 2020

$B Total Subsidies, 2010-2019

$34

$37

$15

$10

$5

Nuclear

US Power Supply, TWHr

7%

20%

24%7%

39%

Source: EIA, 2019 basis

Solar, 3% Wind

Nuclear

Hydro

35

Conclusions 1



Co-sponsor None

Introduced 8/11/20




➢The Feb. ‘21 ERCOT grid outage had 3 immediate causes➢Such an event was likely inevitable due to replacement

of dispatchable power for intermittent power supply➢Favorable public policy→ explosive growth of wind and

solar to 25% of total power (2020), → +38% (2025)➢Deregulated power in Texas is not a free market➢“Temporary” Federal and State incentives have been

institutionalized

36

Conclusions 2



Co-sponsor None

Introduced 8/11/20




➢Growth of rooftop solar in Texas (ERCOT - 6GW) will provide additional challenges to balancing the grid➢The rush to shut down coal power must be stopped➢New federal legislation targeting 80% renewable power

by 2030 and 100% by 2035. This is suicidal!

Gregg A. Goodnight

Nov 3, 2021

Born in Houston, TX, 70 years old. Retired, married to Nancy Hofer from PA, 46 years, 3 grown children

BS in Chemical Engineering, U. of Texas 1973MS in Chemical Engineering, U. of Pennsylvania, 1976

E.I. DuPont in Philadelphia, PA and LaPorte, TX (1973-1978)Monsanto/Solutia, Chocolate Bayou, TX (1978-2000)UBS Chemical Equity Analyst, Houston Tx, 2000-2013TZMI, Industry consultant for Chemicals, 2014-2017

Personal

Education

Employment

Current Interests

Hobbies

Climate change science and public policy implications, green energy impacts on society, alumni support for UT Dept of Chemical Engineering, TRCS and CO2 Coalition membership

Classical music and music performance, 40-year member and cello player for the Galveston Symphony Orchestra

Documents

Failure and Lessons - iogcc.ok.gov