Power Outages in Texas: An email I sent my principles of economics students
notesonliberty.com
notesonliberty.com
The core premise seems to be “we need all this excess capacity, who is going to pay to have all of this production that will sit idle?”
The problem is that it’s not clear that we need more capacity. At the minimum we need to winterize our current capacity as is, so that it doesn’t fail when the weather gets cold. That’ll cost some money, of course, but it’ll cost a hell of a lot less than creating brand new extra power plants that’ll sit idle.
It’s also not clear why extra capacity would help. If the grid has a bunch of new power plants sitting idle, why should we believe that they too won’t fail when cold weather is shutting down other power plants? Wouldn’t they be even more likely to fail than the plants that are already on and running? I guess we could winterize them, by why not just winterize the main grid so it doesn’t die when you need it most?
It honestly seems like they started with their argument and began to work backwards towards to find some evidence to match, because they’ve totally ignored the simplest solution that already worked in places like El Paso: winterize your damn power plants.
Perhaps we could also talk about the outsourcing of risk; those responsible for reliability of the infrastructure are also responsible to shareholders to maximize return, so heaters and insulation on natural gas pipes don't need to be installed because there's a very small chance the pipes will freeze.
What's the value of the hundred people who will die from this vs the cost of losing all autonomy by not being interconnected to other grids?
Heads I win, tails you lose. Let freedom reign!
An enterprise that enjoys all the profits of day-to-day success and no consequence of abject failure will minimize all expenses beyond those necessary to keep the lights on most of the time.
The good sought by this company is clearly profits and more likely executive bonuses, not reliability.
That preparation, previously recommended twice, is an example of the sort of regulation people would like to see: requirements, rather than recommendations.
All in all, seems misguided a bit on both left and right when it comes to blame, but the economics of it are good.
Renewables were literally not the problem and it’s hard to take any kind of advice from this article when it gets the basic facts wrong.
https://arstechnica.com/science/2021/02/even-power-disasters...
This is still an on-going event so the “history” is still being written.
Also https://www.texastribune.org/2021/02/16/texas-wind-turbines-...
The real issue here is that thermal plants (coal, gas, and nuclear) failed exactly as the 2011 report warned. While wind was producing more than expected, it was never going to produce enough to cover the difference as thermal plants started to shut down.
We had projections for both wind and solar for these last few weeks, and both wind and solar OVER-produced, exceeding those projections.
On the other hand, we had projects for coal and natural gas, and both of us failed spectacularly.
So yes, I am concerned about any article that spends time talking about wind and solar, when the ACTUAL problem that caused it to be 41ºF in my living room was natural gas and coal.
First, I don't find the quoted statement to be false: (1) Wind turbines/various solar methods have numerous problems beyond that; as do all methods of providing power. (2) Both would be better at providing energy the way we consume it if we had a cheap, reliable method to store large amounts of energy[0].
I don't work in energy, but I follow enough of it to know that these statements are reliable. There are companies looking into various, exotic, methods for storing large amounts of generated electricity so that the "we don't control the fuel" problem of many renewable options is a non-issue. Not all renewables have this problem, hydro can be consistent/reliable, provide large amounts of energy and is cheap. All of these problems have technology solutions waiting to be discovered/applied. It's hard to find anyone who will complain about hydro-electric plant[2] -- electric bills go down and there's less smoke in the air. The same thing is started here with wind/solar. Complainers stop when they actually read their bill. "Oh, it doesn't cost more? ... oh,... well... ~noises in political~"
Was it that the author indicated that the Green Energy Blamers "have a point"? See, that's a nice psychological trick. I suspect you are a big supporter of renewable/environmental politics. I suspect his goal with that statement was to make a point to the blamers. Aside from the first sentence, pointing out an obvious, well-known fact about renewables than any "Green Blamer" has been screaming -- forever -- and baking in a solution[0]. And he's not advocating getting rid of anything/building up the "expensive/easy to turn on/off" technologies.
[0] What you produce has to be used or stored. That's the case with every utility -- water/gas -- things just move, and can get out of hand, a lot faster I gather.
[1] And yes, energy storage on a multi-day scale is science-fiction, AFAIK, presently. This is a hard problem.
[2] Assuming it's designed taking into account whatever new "evil" thing hydro does to the environment that I'm not yet aware of. :)
If solar and wind had failed spectacularly, then I'd want to see that. But they didn't. Coal and natural gas did.
So we should be talking about how natural gas and coal failed, not some hypothetical alternate reality where solar and wind under-delivered.
Saying that wind exceeded expectations is like saying that your QB with a broken leg exceeded expectations by making it to the bench. You should still be looking for a QB that can play.
If the argument is that wind is nearly useless in the winter by design, then that is all the more reason to promote alternatives. No one freezing right now is going to be comforted by the knowledge that our wind capacity was planned to be unavailable when it's coldest.
Solar is fine, and is a trivial amount of the installed capacity in any case.
There is plenty of wind generation going on in Canada or Sweden; one presumes the "make a wind generation system work in the cold" is a solved engineering task. Those windmills are a little more expensive.
Is this a result of poor planning or is this novel failure? This smells like a failure driven entirely by inappropriate cost optimization.
Exactly. Due to the nature of the Texas climate, peak capacity will track summer demand and not account for once-in-a-lifetime freezes. We need proper planning and enforcement to ensure that we can output as much in the winter as we can in the summer. Hopefully it's as straightforward as weather-proofing our existing capacity. As you said, wind generation works fine in much colder climes.
If a significant part of our capacity can't produce in cold weather, it should be phased out in favor of capacity that can. I'd love to see that be Canadian-style windmills, if that turns out to be able to produce consistently in winter (I have some doubt here because of the very low projections for our existing wind output, but perhaps more robust turbines will do much better). If wind turns out not to be able to meet that need sufficiently, then perhaps we should focus some of the subsidies on capacity that can. What we should never do is defend one preferred generation source without regard to whether it can supply what Texas actually needs, which is capacity that can produce consistent output in both summer and winter.
> So we should be talking about how natural gas and coal failed ...
It's also fair that the author might not have been up to date with the latest information. In the early days of the mess, wind was initially suspected to be the main culprit, primarily from the surprise to the general public that wind turbines and ice don't mix[0] and the general sport that northerners have of laughing at the "snow-challenged" when the rare white hell falls from the sky[1].
[0] I live near the thumb in Michigan. We like to take our kids to the wind farms. There are many, many reasons that a given generator will have brakes applied, including "too much wind". People laugh at that stuff, but it's "by design" and is part of a system.
[1] We laugh unfairly when Atlanta gets an inch of snow and more people die in two days than die in an entire winter up here, but it ignores the reality that our local governments stockpile salt/sand and have dozens of trucks/expertise to handle substantially more snow. Put us on roads with no clearance and a bunch of drivers unfamiliar with snow and we'd be just as at risk. Or toss a coastal-state problem like a tidal wave/tsunami, in the state that's laughing and they'd fare about as poorly.
Totally agree -- the issue is one that's clouded with BS on both sides. This article did a good job of explaining why it's a really hard problem; regulations are too often a big, blunt, instrument aimed at a delicate problem and are often just as destructive as "letting unregulated capitalism solve it". Too important of a resource for either solution so both sides aim at things that look good or appeal to their base (Big Energy Bad/Environmentalists are Communists!) and the blackouts continue.
Last night[0]—when it's coldest—wind was producing at under 15% of installed capacity[1]. Photovoltaic generation was at 0%. You can technically claim that wind exceeded expectations, but you should qualify that by explaining that wind was expected to produce almost none of the supply, despite ERCOT having 28% of the wind capacity of the entire country.
The fundamental issue is that summer demand funds the construction of electrical capacity in Texas. As this is unavoidable given the climate, we need our summer capacity to be able to handle unusual winter load as well. You are essentially defending wind by saying that it's not expected to be able to produce more than a fraction of its power in winter, when the problem at hand is that we need capacity that can do exactly that. The more capacity we have that works in summer but not in winter, the more vulnerable we will be to unusually cold weather. Our current wind generation systems are by far the worst choice of power by this measure.
Solar capacity is actually performing great right now, in the daytime (looks like around 80-90%), and wind has picked up a bit (30%) but still lags every other generation source by a tremendous margin.
[0] http://www.ercot.com/content/cdr/html/real_time_system_condi... [1] http://www.ercot.com/content/wcm/lists/219848/Capacity_Chang...
I absolutely agree that requirements for winterization are in order, and that could change things significantly. Perhaps winterized wind power would have great output in this weather, or perhaps not. My analysis applies only to the actual current ERCOT capacity, not any hypothetical capacity.
Not solar, not wind. Comparing current production to idealized mid-summer production is nonsense. ERCOT's own projections never involve wind maxing out in wintertime, because that's not how anything works. If we were to become 100% reliant on wind for some strange reason, we would obviously need to build much, much, much more wind power for the winters. Which is why we have so many other sources of power. Solar and wind were never expected to keep my house warm, coal and natural gas were. And coal and natural gas fell over and died when it was needed most.
This is provably false by ERCOT's record-setting wind output of 17,541 MW (83% capacity) on February 19, 2018 [0]. ERCOT only had 21,190 MW of wind capacity at that time. Now they have over 25,000 MW, yet wind was producing 3,500 MW (14%) last night, and now that it's warmer is all the way up to 6,629 MW (26% capacity).
It's absolutely true that fossil sources failed when we needed them. It's equally true that wind failed us utterly. If we had no wind generation capacity but instead had 25000 MW more fossil fuel generation capacity, then we'd be in much better shape. Note carefully: I'm not suggesting this as a solution, as there are much better ideas like winterizing our existing capacity. I'm instead emphasizing that our summer capacity needs to be able to meet our needs in extreme cold, and we should either fix or get rid of capacity that can't do this. The biggest culprit by far being our current, un-winterized wind generation systems.
[0] http://www.ercot.com/content/wcm/lists/144926/ERCOT_Quick_Fa...
(I cut off part of the quoted sentence because it made it seem like I was responding to the claim about how ERCOT does projections. As discussed above, I don't care about the projections because wind capacity failing us by design is an even bigger problem than it failing due to unforeseen circumstances.)
In the meantime, I hope this state can winterize their natural gas plants, which your link shows should be more than half our power source. Not so much when the machinery is frozen, it turns out.
What I have a fixation on is false claims that wind generation did not contribute to shortfalls. Failing to produce power by design is not a very good defense of wind power, while the out-of-context quotes that wind "exceeded expectations" are conspicuously missing any details of just how woefully low those expectations were.
Some facts based on the information we currently have:
- looks like a series of cascading failures similar to an event in 2011
- a report outlined the failures in 2011, as well as causes and symptoms
- temperatures are more extreme than in 2011
- increased population growth in the state since 2011
- Texas has an independent grid with connections which have limited throughput and high cost conversion
Since politicians in Texas chose to keep the electric grid separate, the wide spread outages are much more likely to happen. I thought the analysis on voters having wrong incentives was interesting, but also really lacked any type of solution.
The only solution is to displace the problem where it matters: to the clients: let them decide, one by one, if they want efficiency or resiliency.
Assume the former by default as most people are cheap, so rent on-prem diesel generators to the chicken little, and everybody will be happy.
I think it’s extremely misguided to characterize this storm in this way. We will probably be in for more of these types of events sooner than later.
That’s once in 31 or 10 years, depending on how you want to slice it. Not 100, nowhere close to it.
As such it's a closed loop of ideology, which makes it a predictably terrible source of bad policy.
Texas isn't just a solvable problem, it should have been an avoidable problem. But when your premises are wrong, your ethics are questionable, and your biasses are brittle and never challenged - this awful utter state of Texas is what you get.
Variations will keep happening until these beliefs are finally discredited and replaced with models that not only have genuine predictive power, but also a solid record of preventing problems instead of causing them.
It's always strange to see this kind of statement presented as axiomatic. This sort of circular reasoning sounds like ideology on autopilot. Utilities should be run by businesses, not the government. Why? Because the government is bad at running businesses.
> My friends on the right tend to send blame towards green energy
Plus he's pretending he's not on the right.
This is objectively false and highly misleading. What to do isn't going to be spelled out by 'friends on the left' because those friends know they do not have the technical expertise to make such suggestions. One typical characteristic of 'the left' is looking to experts for solutions not just their own knowledge.
In 2011, there was a SIMILAR event in Texas. The Federal Energy Regulatory Commission (FERC) wrote a study and issued report - see link below. That is how this should work, I know engineering enough to read the thing and say 'this seems logical' but I don't know enough to write something like this. I'm what he would call 'the left'.
The report has an EXTENSIVE list of regulatory recommendations. Most of them go to 'collecting documentation about power plants' and 'checking that power plants aren't lying'. Others are 'changing your thresholds for action to be more conservative'...that is regulation! People seem to have this idea that regulation is some massive thing...but really it is knowledge management. Example from the document:
> 5. ERCOT should consider modifying its procedures to (i) allow it to significantly raise the 2300 MW responsive reserve requirement in extreme low temperatures, (ii) allow it to direct generating units to utilize preoperational warming prior to anticipated severe cold weather, and (iii) allow it to verify with each generating unit its preparedness for severe cold weather, including operating limits, potential fuel needs and fuel switching abilities.
Translation, they want the texas energy regulators to:
* (i) Raise the threshold for when you start getting more energy if the forecast says it will be cold. Your current threshold is basically running it to the empty light on your gastank and thats reckless
* (ii) Authorize themselves to tell plants 'its going to get cold please start getting ready if your plant is off'
* (iii) Actually check that what the plants are telling them about their cold weather preparedness is true.
> 6. Transmission Operators, Balancing Authorities, and Generation Owner/Operators should consider developing mechanisms to verify that units that have fuel switching capabilities can periodically demonstrate those capabilities.
Translation: If a plant says 'hey look at this cool thing I can do' the regulator should say 'show me' not 'cool I trust you'
If you look at other professional codes and standards (e.g., ASME, NFPA) the way it typically works is 'here is a standard you should design to' and then you attest that it is designed to or that you ran the test. More important regulations might involve outside validated testing but really...most of this is just documentation. This isn't overly burdensome, it is basic good practices.
This isn't 'the left' failing, this is them saying 'listen to experts' and people laughing.
https://www.nerc.com/pa/rrm/ea/ColdWeatherTrainingMaterials/...
That why it is harder and harder to find good quality product, and that's why low-occurrence incidents are less and less provisioned for.
This is a little rich from an economic analysis which curiously fails to mention that Texas has a deregulated market based option which many consumers use: Griddy.
Griddy is in the news [0] because they actually had to tell customers to stop using them in the middle of this crisis because they had to raise bills thousands of times higher overnight in many cases.
Maybe, just maybe, deregulation is not the answer here.
[0] https://www.houstonchronicle.com/business/energy/article/Tex...
Now let's see you assess your risk when it comes to installing heaters and insulation.
Then when one of these rare events happens, and now thousands of people are owed tons of money, either insurance pays out, or the government bails out the power company, or the power company goes bankrupt (or is forced to make cuts in other areas). In none of these outcomes has the SLA achieved its goal of ensuring that consumers have more-reliable access to power. Some of them may be richer for their suffering, but some of them are also dead.
This brings us back around to the original question: what regulation would have solved this problem?
Well, except for the fact that the "free market" arrived at one year contracts with sticky prices.
I dunno... a regulation that forced plants to winterize so they're prepared for extreme weather?
I also find it laughable that Texas is all about small government and deregulation until the PUC and ERCOT start losing money. Then they decide that it's ok for ERCOT to backdate prices and change the price of electricity already sold days ago.
I'm just waiting for my electric company to try and change my pricing even though I'm on a fixed-rate contract.
If anything, people are openly calling for a specific type of regulation before the event itself has even stopped - which is probabally too soon, even if it does look like the lack of winterization might be the root cause of the issue.
https://www.bloomberg.com/news/articles/2021-02-17/texas-was...
https://arstechnica.com/science/2021/02/even-power-disasters...
https://twitter.com/DemSocialists/status/1362473071156879377
tl,dr: the Texas grid is deregulated so it can avoid following Federal rules about making it able to deal with harsh weather; because of this, it also has very little interconnectivity with the rest of the country, and cannot act like every other state and purchase power from elsewhere when things go awry.
So there's part of the "deregulation" that his liberal friends are talking about. If they were following the regulations then Texas would be able to get power from elsewhere. It'd still be newsworthy and a mess, there is a lot of knowledge and preparation for snowstorms that Southern states simply do not have, but it would not be as apocalyptic of a mess.