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PRESSURE ON TEXAS GRID: Winter Storm Uri put unprecedented stress on Texas’s power sector last February, leading to skyrocketing power prices, outages and 246 deaths. Ever since, more and more eyes have been focused on the state’s vast power network, most of which is overseen by the Electric Reliability Council of Texas.
Now, with summer heat bearing down and the threat of blackouts looming, the state’s grid has become a centerpiece of Texas’s gubernatorial race between Gov. Greg Abbott and Beto O’Rourke, where the Democratic hopeful is bashing the incumbent Republican for being unable to guarantee sufficient power supply.
More broadly, ERCOT is a proxy in the debate over reliability and how operators should organize their grids — especially how much their generation mix should involve renewables.
The latest: ERCOT issued its first “conservation appeal” of the season last week in the face of triple-digit heat, asking residential and commercial customers to delay use of appliances and turn up the temperature setting on their AC for a six-hour period because of tight reserve margins.
ERCOT’s request was based on forecasts that its dispatchable generation sources would perform at 85% of installed capacity at the tightest hour, while solar was forecast to be available at 81% of capacity. Wind generation, meanwhile, was forecast to perform at around 8%.
Wind’s merits: The conservation appeal renewed debate over the degree to which low output from ERCOT’s 35,162 MW of installed wind capacity is responsible for the reliability issues.
Jason Isaac, director of the conservative Texas Public Policy Foundation’s Life:Powered initiative, said after the conservation appeal that the state’s problem is its market “encourages dependence on federally subsidized variable, intermittent, and unreliable sources of energy” like wind and solar that can generate “only a small fraction of the energy Texans need at critical times.”
Others making note of wind’s limits have often brought up its failure during Winter Storm Uri. The North American Electric Reliability Corporation, which is responsible for overseeing and establishing grid reliability standards for system operators across the country, said in its post-storm assessment report that wind turbine outages were responsible for 27% of the total generator outages.
However, notwithstanding that act of God event, wind’s underperformance in hot weather conditions reflect its overall variability. At times, wind generation there has been responsible for driving power prices to zero, or even negative, in some regions.
“Obviously, it’s not always windy and sunny,” Chaz Teplin, a principal in green energy NGO RMI’s Carbon-Free Electricity practice, told Jeremy. “But those failures can be fairly well predicted.”
Joe Daniel, who manages RMI’s Carbon-Free Electricity practice, challenged the characterization that wind’s low output was far behind ERCOT’s expectations and that the grid operator didn’t have output where it expected to.
“We know that it’s generally not windy when you have a really high temperature event,” said Daniel.
“No one, when they’re planning for reliability, expects a 10 megawatt wind farm to produce 10 megawatts,” Daniel said. “So, it might be true that the wind plant was only producing, you know, 0.8 megawatts instead of 10, but it’s not fair to say that it was only producing 8% of what was expected.”
Fossil failures: “Dispatchable” thermal generating sources’ main advantage over variable renewables is that they can be turned on and off, and output levels are more predictable. But they have their own limits and vulnerabilities, as NERC noted in its winter storm report. It found that the no. 1 source of generator outages, or 58%, was natural gas units.
Since the storm, ERCOT has expanded the use of its “reliability unit commitment” tool, by which it requires more generation from dispatchable thermal generators to increase emergency reserves to serve demand for extreme heat events.
At least one Republican state senator has expressed worry about the age of plants being employed to meet those reserves, and Teplin and Daniel emphasized that more use of older plants increases the likelihood of unplanned outages due to maintenance related issues.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
U.S. ENERGY ENVOY: GAS PRICES SHOULD FALL CLOSER TO $4: Top U.S. energy envoy Amos Hochstein said yesterday he expects national gas prices to continue to fall closer to $4 a gallon in the coming weeks, citing spare capacity from major oil producers, following President Joe Biden’s trip to the Middle East last week.
During his trip, Biden met with leaders from top oil-producing nations, though U.S. officials had cautioned ahead of time that it was unlikely they would release any sort of formal bilateral announcement on production.
Still, Hochstein struck a tone of optimism about Biden’s visit: “Based on what we heard on the trip, I’m pretty confident that we’ll see a few more steps in the coming weeks,” Hochstein said on CBS News’s “Face the Nation.” (He declined to offer specifics on what countries would boost production, or by how much.)
“It’s not just about Saudi…We met with the [Gulf Cooperation Council], and with Saudi Arabia,” Hochstein added. “I’m not going to go into how much spare capacity there is in Saudi Arabia and in UAE, and Kuwait, etc. … But there is additional spare capacity.”
His remarks come as gas prices have abated slightly in recent weeks, down from last month’s record-high national average of $5.01 per gallon, according to AAA.
“This is the fastest decline rate that we’ve seen against a major increase of oil prices during a war in Europe where one of the parties in the war is the third largest producer in the world,” Hochstein said. “So these are extraordinary circumstances.”
In the interview, Hochstein also defended the plan to cap Russian oil prices to help cut off Moscow’s export revenue from crude oil, after G-7 ministers agreed to explore the effort last month. “What we want to be able to do is to mitigate where the price of oil on the world market doesn’t actually impact Russia at all,” he said of the plan. “So if prices go up, [Putin] still won’t get that price.”
CANADA EXPORTS REPAIRED NORD STREAM TURBINE BACK TO RUSSIA: A repaired turbine cited by Russia as “critical” to resuming operations of its Nord Stream 1 gas pipeline has been shipped back to Moscow from Canada, Russian news outlets said today, after Ottawa agreed to grant a two-year sanctions exemption to the company tasked with making the repairs.
According to the Russian outlet Kommersant, the turbine was sent to Germany via plane rather than by ship, to speed up its arrival. From there, it will be shipped by land to the Portovaya compressor station on the Gulf of Finland in Russia.
News of the shipment came nearly one week after the Canadian government agreed to issue Siemens Energy a “time-limited and revocable permit,” which it said will enable the company to return the turbine to Russia, and allow for additional maintenance as needed for its five additional turbines.
Canada’s decision came after intense lobbying from Western leaders, especially from Germany, whose energy minister described a gas shutoff from Russia as a “political nightmare scenario.”
Now all eyes are on Moscow: Western leaders are waiting to see whether Gazprom— which took the pipeline offline last week for planned maintenance—will indeed resume operations as planned on Thursday.
GERMAN REGULATOR: GAS SHORTAGE THREAT WILL LAST TWO WINTERS: German energy regulator chief Klaus Müller warned this weekend that the country’s gas shortage will likely last two winters, citing the loss of Russian gas supplies and fears as to whether Russian state-owned gas giant Gazprom will resume deliveries via its key Nord Stream 1 gas pipeline.
“We will probably have to live with the threat of running out of gas for two winters,” Müller said in an interview with the German newspaper Bild.
Though Müller noted Germany’s gas storage tanks are nearly 65% full— far better than previous weeks, he said that amount would still not be enough to last the winter without Russian supplies.
Much will depend, he added, on whether Gazprom resumes operations of Nord Stream 1. Gazprom shut down the pipeline last week for maintenance, though EU officials have warned that Moscow could use that shutdown as a pretext for halting supplies completely. “Nord Stream 1 maintenance work is scheduled to end on Thursday,” Müller said. “Now a lot depends on whether and how much gas flows through the pipeline afterwards.”
His comments come as the European Commission is slated to propose a winter emergency energy plan for member countries this week.
MEANWHILE, EU WILL DOUBLE ITS GAS DELIVERIES FROM AZERBAIJAN: European Commission President Ursula von der Leyen announced that the EU has signed a deal with Azerbaijan to double its gas deliveries from the country to “at least” 20 billion cubic meters by 2027, news that comes as the bloc seeks to secure alternative supplies amid fears of a Russian cutoff.
Speaking to reporters in Baku this morning, von der Leyen described Azerbaijan as a “crucial energy partner” for the bloc, and noted the urgency for the EU “to diversify away from Russia and to turn to more reliable, trustworthy suppliers.”
The deal will increase supplies delivered via the Southern Gas Corridor, according to a joint memo of understanding published this morning. The memo also outlines efforts to reduce methane emissions through the gas supply chain and boost investment in the EU’s clean energy goals.
The deal will more than double the EU’s gas imports from Azerbaijan, which totaled just 8.1 bcm last year. Read more from the Financial Times here.
The Rundown
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Associated Press The AP Interview: GM’s Barra stands by ambitious EV pledge
Washington Post U.K. braces for record temperatures as ‘heat apocalypse’ hits Europe
Calendar
TUESDAY | JULY 19
1:30 p.m. The Department of the Interior’s Interagency Working Group on Mining Regulations, Laws, and Permitting will hold the first in a series of three public listening sessions to gather information and develop recommendations for improving federal hardrock mining regulations, laws, and permitting processes.
