"TWICE IN ONE WEEK THIS August, and for the first time in five years, the owners of power lines and distribution networks across Texas found themselves in an electric game of chance as sweltering, near-record temperatures prompted an energy emergency.
As the temperatures climbed, demand from air conditioners soared and winds
slowed, the state's grid operator found itself with a shrinking margin of reserve power. And when the amount of spare capacity dipped below a tripwire of 2,300 megawatts (less than 3% of the state's energy needs) on Aug. 13 and again Aug. 15, the Electric Reliability Council of Texas, or ERCOT, was forced to take action.
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Power plants rushed to ramp up their outputs to take advantage of prices that briefly soared past a state mandated cap of $9,000 per megawatt-hour – up from about
only $19 hours earlier. The companies that own transmission and distribution systems, meanwhile, hurried to reduce consumption by their customers, knowing that the rates the companies will pay next year are based on when demand is highest.
"Basically, you don't want to be left holding the hot potato whenever ERCOT peaks," says Joshua Rhodes, a research associate at the Energy Institute at the
University of Texas—Austin.
As recently as January 2018,
power providers Texas were warning that the state's supply of spare electricity capacity was
in peril, leaving millions of customers – from households to offices to hospitals – vulnerable to blackouts. And while some experts painted the actions taken
this week as a sign of progress – an example of how market mechanisms and advanced technology worked in concert to respond to sudden shifts in supply and consumption – the emergencies also underscored how electric grids across the U.S. are being impacted by climate change, just as they're being radically reshaped by greener energy options like wind, solar and cheap natural gas.
"Climate change is only going to make this kind of thing worse," Rhodes says. "If we have large, coincident high temperatures across vast areas and grids, that will introduce stress into the system. The same goes the other way: We've seen more polar vortexes escaping from the Arctic region driven by climate change. So we're seeing it in both summer and winter."
The U.S. electric grid has changed dramatically from even just a decade ago. Though the energy emergency showcased the advances that allowed grid operators to rapidly remove load from the grid while ramping up output, they also exposed how changes to the state's electricity supply may have contributed to the problem.
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Booming oil and natural gas production in Texas have caused gas prices to plummet, forcing more-expensive coal out of the market. Even renewables such as wind and solar, which had seen their costs drop, have become cheaper than coal. By the end of 2018, four big coal plants -- accounting for roughly a quarter of the state's coal generation -- were taken offline, prompting
federal energy watchers to express concern about the "smaller cushion of resources to meet summer peak demand and an increased risk of grid stress conditions."
"The fleet of power plants that we have was built around the time when gas was above $5-$6," Rhodes says, referring to benchmark natural gas prices measured per million of British thermal units, or mmBtu. "But it's been in the twos and the threes for almost a decade now, based on fracking. It's just driven that price down so low and made it harder for other types of generators to make it."
Gas fuels more than half of Texas' energy-generating capacity. Close to a quarter, meanwhile, comes from
wind, while coal provides 16%. Despite its oil-and-gas bonafides, Texas is by far the biggest producer of wind power in the country.
Amid bargain-basement prices for gas, there hasn't yet been an incentive for the state's power market to build anything other than natural gas plants, wind and solar resources. But wind is intermittent, and the wind died down during the height of this month's heat wave, ERCOT found itself with even fewer sources of electricity.
"Electricity supply authorities are finding that when wind gets to be a substantial part of the power system, if you don't have good connections with neighboring countries or neighboring systems, that can really get you into a lot of trouble in maintaining system stability," says Peter Hartley, an economics professor and scholar in energy studies at the Baker Institute at Rice University.
Falling prices for batteries in recent months have allowed companies to store power generated by wind and solar. Battery systems, though, remain expensive and can only store a few hours or even just a few minutes of electricity, depending on demand and the size of the system.
"They're good in the short term, but it's not going to solve what we're talking about here with these substantial weather events," Hartley says.
While the emergency declared in Texas resulted in only limited brownouts or blackouts, Hartley says it highlighted the challenges ahead for grid operators who are increasingly relying on renewables.
Other experts aren't so sure. Power prices in Texas may have soared by close to 57,000% during the heat wave, they concede, but the spike only lasted a few minutes as the owners of power plants, transmission lines and distribution networks rapidly ramped-up output and drew down consumption. Both energy emergency declarations ended about three hours after they were announced.
"So far this week, what's happened, given the scale of the numbers, is that everything is happening as designed. So this is a good news event," says William Hogan, a research professor in global energy policy at the Kennedy School at Harvard University who worked on the pricing mechanism for ERCOT. "When you consider the demand-side flexibility, then the concern that the renewables are now putting us in a situation where we have problems is, I think, premature.""
Alan Neuhauser, Staff Writer
Alan Neuhauser covers law enforcement and criminal justice for U.S. News & World Report. He ...
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