The Texas Power Crisis—Will It Happen Again?

 

I don't often get an email from a colleague in Scotland asking how I'm weathering the power cuts in Texas.  But I did last Friday, after the worst was over. 

 

For much of last week, millions of Texans had to endure the loss of electric power, and all that entails, during some of the coldest weather on record. 

 

Early Monday morning, Feb. 15, the Electric Reliability Council of Texas (ERCOT), the nonprofit organization that operates the Texas power grid, ran out of power.  That is to say, the soaring demand due to millions of heating units working overtime exceeded the dropping supply due to equipment failures caused by the same cold weather.  In order to avoid an uncontrolled system crash that would take weeks to recover from, ERCOT commanded its grid customers (operating companies that distribute the power and collect power bills) to implement rolling blackouts, handing out percentages of their load they had to shed.  How they shed it was up to them, but shed they must. 

 

This put increasing numbers of electric customers in the dark, both physically and informationally.  Although many people could access news and websites through their phones, there wasn't that much to learn about how the power cuts were being decided or how long they would last.  Here in San Marcos, our house had power all day Monday. That evening I was on a Zoom conference with some people in Austin, who'd been told that the rolling blackouts would last only an hour or so.  Instead, it seemed that almost everybody in Austin lost power and stayed in the dark except for a lucky few who happened to be on a "critical feeder" that powered a hospital or fire station. 

 

In the middle of the Zoom call, our power went out.  My laptop battery kept my computer going, though, and I managed to power our modem and wireless network with an emergency battery powerpack and inverter, and I got online long enough to complete the call.  But then I went to bed at 8:30, as it was getting cold in the house.  We had an hour or two of power every so often for the next two days, but it was mostly off until Wednesday afternoon.  Many people in Austin and other parts of Central Texas fared much worse, losing power for two or three days straight, and when their pipes froze they had to seek out an emergency shelter or stay with friends. 

 

Like many engineering failures, this one had multiple causes.  On Friday, the IEEE (Institute of Electrical and Electronics Engineers) Smart Grid Initiative sponsored a webinar panel discussion on the crisis, and much of what follows is taken from the information presented in that webinar. 

 

As you may know, Texas has its own power grid that operates independently of the grids in the rest of the country.  A "grid" is defined by a region where all the power is synchronized to 60 Hz and can be fairly easily shipped back and forth as the need arises.  For historical reasons having to do with the criticality of Texas infrastructure during World War II (and a bit of Texas stubborn independence), most of Texas is covered by the grid supervised by ERCOT.  There are a few power interties between Texas and other grids, but they require special equipment and cannot provide significant amounts of power transfer.

 

So when an extraordinarily cold air mass charged through Texas beginning on Sunday, ERCOT was going to have to handle it by itself.  On paper, they were prepared.  About half of the 80+ gigawatts (billions of watts, abbreviated GW) of nominal capacity for the grid is natural-gas generation.  ERCOT has over 500 generating stations of various kinds to draw from, and some are more reliable than others.  Coal and nuclear plants are the most reliable kind, but coal plants are being shut down these days and no new nuclear plants are being built.  A quarter of Texas' installed capacity is wind, but wind generators are notoriously unreliable, and once the cold air arrived it stopped moving, idling most of the wind turbines and freezing up many of them. 

 

The usual alternative in such a situation is to turn on gas-fired turbine generators, which in principle can be started up in minutes to augment the grid's energy sources.  But the same weather that caused demand to soar also crippled the natural-gas infrastructure, freezing well heads and control valves and causing other problems that eventually eliminated some 26 GW of gas-fired generators that could have otherwise been used.  Although at the peak of the crisis, the grid was producing some 62 GW of power, ERCOT would have had to come up with another 10 GW to meet the extraordinary demand produced by single-digit temperatures in Houston and other normally balmy parts of central Texas.  Hence the rolling blackouts that quit rolling and just sat there until pipes froze and people had to seek warmer shelter.

 

How could this have been avoided?  The panel experts proposed a number of solutions. 

 

One was much better interconnections to other grids, both from Texas to other grids and across North America.   This is an expensive long-term solution, costing many billions of dollars over many years, and it would increase the robustness of electric power nationwide.  But as one expert pointed out, the grid covering much of the Midwest, just north of ERCOT's grid, was experiencing its own rolling blackouts of less severity, and had no power to spare.  So even if Texas had not been electrically independent, we still would have had blackouts, but perhaps not as severe.

 

Another idea that has been widely adopted in places like Italy is "demand response."  This is a smart-grid technology that allows the power company to adjust the demand from individual consumers.  For example, in exchange for a discount on your power bill, you might allow your electric utility the right to reduce your thermostat setting or cut off your electric dryer in power emergencies such as the one Texas just experienced.  If demand response had been tested and widely deployed in Texas, the blackouts might have been less severe, but they would probably still have been needed.

 

Fortunately, there were not many fatalities directly attributable to the power outages, and so as crises go, this one was greatly inconvenient but not deadly.  Better enforcement of winterization protection for natural-gas plants is the most urgent thing to do that will keep something like this from happening again, but the final call is up to Mother Nature.

 

Sources:  A webinar called "The Texas Energy Crisis" available to IEEE members and hosted by Peter Wung, IEEE Smart Grid chair, is the source of much of the information in this blog.  A more politically oriented report that gets the technical matters mostly right was written by Texan Kevin Williamson and was posted on the National Review website at https://www.nationalreview.com/2021/02/understanding-the-texas-blackouts/.

A Test Case For How To Lower Carbon Emissions: Texas

No, I haven't gone off my nut with blind patriotism toward my native state.  Yes, I know that ex-governor Rick Perry said in 2014, "Calling CO2 a pollutant is doing a disservice [to] the country, and I believe a disservice to the world."  But the fact of the matter is that Texas has the most installed wind-generation capacity of any state, more even than California, and shows no signs of turning back.  How we got here is a lesson in the effects of government regulation, and shows that sometimes less is more.

In an Associated Press article, reporter Michael Biesecker points out the irony that three of the leading wind-generation states—Texas, Oklahoma, and Kansas—are also home to state and federal lawmakers who have been the most critical of climate-change ideas and most supportive of fossil fuel businesses such as oil and coal.  He shows that in both 2014 and 2015, U. S. utilities spent more money installing renewable-energy sources such as wind and solar than they did building fossil-fueled power plants.  And the fossil-fuel plants they did build mostly burn natural gas, which contributes less to the carbon-dioxide burden of the atmosphere than coal does.  The fact that natural gas is so popular is largely because it's cheaper these days, and that's because the largely Texas-based oil-and-gas-extraction industry figured out how to do fracking, which has made more natural gas available now than we've had for a long time. 

A few years ago we were hearing calls for carbon taxes, heavy regulation of fossil-fuel industries, and draconian mandates for Federal- and state-funded renewable energy projects imposed from Washington and other centers of governmental power.  Largely because Washington has been gridlocked for the last five or six years, no significant Federal laws were passed, although the Obama administration has done what it could through executive actions in those directions. 

Meanwhile, in Texas we enjoy some peculiar advantages when it comes to doing new things with electric power.  Because years ago, Texas refused to interconnect in a major way with the electric grids in the rest of the country, most of the state gets power from an entity called ERCOT—the Electric Reliability Council of Texas.  Both physically and legally, ERCOT is independent from both the rest of the U. S. power grid and from the tangle of regulatory requirements that the rest of the country has to deal with whenever a power utility wants to do something different.  

As Kyle Downey points out in an article at lawstreetmedia.com, this freedom from outside utility regulations has allowed Texas to pass innovative laws such as the Renewable Portfolio Standard in 1999, which created mandates and funded incentives for utilities to develop renewable energy sources such as wind and solar.  Modified over the years and threatened with repeal but never revoked, the Standard has succeeded beyond most people's expectations.  From barely 1,000 MW of installed wind-generation capacity in 2002, wind power has grown to the extent that about ten percent of all power produced in the state is generated by wind farms—some 17,000 MW as of 2015.   Many Texas utility customers can choose to "buy" only wind power through a trading system that gives choices of sources and pricing plans, and this has also allowed private individuals to vote for wind power with their wallets, rather than much more indirectly at the ballot box. 

The other factor Downey mentions that has made Texas a wind-power leader is that we have a lot of land in the Panhandle where the wind blows steadily almost all the time, and even conveniently gets stronger at night when other renewables such as solar conk out.  That everlasting wind on the prairie that early settlers often found so annoying is finally turning out to be a money-making asset.  The state has also provided a fund to connect the remote wind-generation farms to the demand centers in populated areas of the eastern and central part of the state with transmission lines, an essential ingredient of the process that legislatures often overlook when planning renewable-energy futures for their constituents.  Overall, the wind-power picture has never looked brighter in Texas, and there are more wind farms yet to be built.  One study has shown that even without government incentives, building a wind farm is now the cheapest way to install new generating capacity—even cheaper than fossil-fuel plants.

What are the implications of this story for the current debate over carbon emissions and global climate change?  For one thing, it tells me that predicting what people are going to do is hard, unless you restrict them with so many regulations that they don't have much choice.  Few forecasters a decade ago would have foreseen the U. S. getting to a point where it is nearly independent of oil imports, as we are now.  And even I thought that when certain wind-power subsidies came to an end, that the bottom would fall out of wind-generation growth in Texas.  I was wrong, obviously, and not for the first time. 

On a personal level, much of what an individual worries about does not in fact come to pass.  Something like this may be the case with carbon emissions.  In researching this article, I came across a chart showing that in 2013, China built more wind-generating power plant capacity than nuclear-powered plants.  China is still one of the world's largest offenders when it comes to carbon emission because of its huge number of coal-fired power plants, but it is an encouraging sign that even a highly autocratic government such as China's recognizes the good sense in encouraging renewable energy sources. 

All that carbon dioxide in the atmosphere isn't going to go away overnight, and we will be dealing with the consequences of burning fossil fuels, whatever they turn out to be, for many decades.  But those who would like to empower a world government with the means of forcing people to quit burning fossil fuels should take a look at Texas, where climate-change deniers are happily building wind farms, making money, and thumbing their noses at regulators who are everywhere else but in Texas.  It's paradoxical, but it seems to work.

Sources:  The AP article by Michael Biesecker on how conservative states are leading the renewable-energy drive was carried by numerous outlets and is available on the U. S. News & World Report website at http://www.usnews.com/news/business/articles/2016-05-06/gop-states-benefiting-from-shift-to-wind-and-solar-energy.  Kyle Downey's article "The Mystery of Wind Energy in Texas" is at http://lawstreetmedia.com/issues/energy-and-environment/mystery-wind-energy-texas/.  Rick Perry's quotation is from http://www.commondreams.org/views/2014/12/31/top-10-misguided-climate-deniers-quotes-2014 and the article about wind energy in China is at https://www.statista.com/chart/1233/wind-outpaces-nuclear-in-china/.

Will Wind Power Fall Off the Fiscal Cliff?

If you have driven a considerable distance in West Texas (and it’s hard not to drive a considerable distance when things are as far apart as they are out there), you have seen the slightly Martian-looking sight of a forest of identical white towers, each with a triplet of whirling blades, covering a good part of the whole visible horizon.  Wind energy from huge wind farms has been one of the big success stories in renewable energy by some measures, and Texas leads the nation in the amount of installed capacity per state (over 10,000 megawatts ).  And according to a recent article in the Austin American-Statesman, about 70 firms in Texas supply products or services to the wind-generation industry.  But all this may hit a serious roadblock January 1 if the federal tax credit that has encouraged commercial wind-powered generation for two decades comes to an end, along with a lot of other tax cuts and incentives.  This is one effect of the so-called “fiscal cliff” that will automatically take effect if the U. S. Congress and the President don’t do something to stop it.  The prospective end of the wind tax credit has important implications for what some philosophers call engineering “macro-ethics”:  the engineering ethics of public policy and related matters.

The tax credit is substantial:  anyone selling wind energy commercially can qualify for a 2.2 cents-per-kilowatt-hour tax credit from the government for a period of ten years.  This has led some wind-power producers to give away energy for free on occasion, just to get the tax credit.  And note that a credit is better than a deduction:  a deduction means you pay less tax than you would have otherwise, but a credit means you get a check straight from the Treasury, even if you owed no taxes to begin with.  No wonder parts of West Texas look like the Jolly White Giant has scattered around three-petalled dandelion seeds.

The rationale behind the tax credit, enacted in the last days of the administration of the elder George Bush in 1992, was that a strictly free-market approach to wind energy might never get off the ground, because the vagaries of fossil-fuel prices would discourage private investors from putting their money into it.  Nobody would want to build a lot of wind generators when fuel prices were high, only to see their investment turn to nothing when fuel prices fell and wind became uncompetitive.  So the tax credit gave investors a guaranteed return for ten years, which is a reasonable payback time for a major investment such as a wind farm.

Viewed just from the standpoint of installed capacity, the tax credit has been a major success.  On one (presumably windy) day in October of this year, wind accounted for over a fourth of all the electric energy produced in the ERCOT network (the Electric Reliability Council of Texas, which is the name of Texas’ largely independent transmission network).  The growth of wind-related manufacturing and service firms has been a bright spot in the nationwide economy, and Texas is not the only state to benefit from the growth of wind farms.

That’s the good news.  The bad news is that already, the prospect that the tax credit might end has hurt bookings of new business at wind-related firms and caused concern that new construction of wind farms might come to a screeching halt.  And sure enough, another energy-related technology—“fracking,” which makes abundant new sources of natural gas available—has caused the price of natural gas to plummet.  This means that from a subsidy-free economic viewpoint, anyone wanting to build new generation capacity would be crazy to build wind generators when a natural-gas-fired plant would be cheaper and much more reliable (no wind, no power).  In fact, the free market for energy in Texas and many other states is providing little if any incentive for anyone to build new power plants, despite the ongoing need and the fact that brownouts on hot summer days have become uncomfortably common.

The parties involved in this matter are roughly as follows.  There are people who build and install and own and run wind-generation facilities; there are consumers of electricity (basically everybody) who have various preferences about both price and the nature of how electricity is made; there are government entities, mainly the federal government and the state governments; and there are investors whose money can come into the game as long as they see they’ll get a good return on their investment. 

If the tax credits go away, most investors will walk away from future wind farms, at least under the present circumstances of low natural-gas prices.  We will be stuck with what wind farms we’ve got, though if running the farms becomes unprofitable their owners will let them stand idle at best, and will tear them down if things get too bad.  As long as fossil fuel prices stay low, electricity consumers won’t have to pay a lot more, but they may well run into increasingly serious brownouts and blackouts if more generation capacity isn’t built, or if serious conservation efforts are not made.  And conservation isn’t free:  the largest users of electricity have to justify it on a dollars-and-cents basis, not just because it feels good. 

Back in the early days of networked power in the 1920s, the free market reigned because no legislators had given much thought to the need to regulate electric utilities yet.  After notable abuses such as monopolistic practices by single-owner utilities (among whom was numbered my great-uncle L. L. Stephenson, who was an ice-plant and electric-power mogul in San Antonio until he died in 1929), first individual cities, and finally the State of Texas, decided that electricity was too necessary a thing to be left entirely to the whims of private firms with no regulation.  So in the next couple of decades, the industry came under the supervision of state public utility commissions, and a kind of deal was reached.  The state commissions had the authority to set electric rates, but agreed (“colluded with” would be too strong a term) to allow the utility companies a fixed and reasonable rate of profit.  The best thing about being regulated from the viewpoint of the utilities was the fact that their fiscal environment was largely predictable.  This meant planning and investment, which for electric utilities extends decades into the future, could be made with some reassurance that the plans would work out and investments would not be wrecked by unexpected changes in allowable rates and so on.

A number of things conspired to overthrow this regulatory regime. Both the oil crisis of the 1970s, which introduced unpredictability into the fuel-cost equation, and a spirit of deregulation that extended from the airline industry to the telecommunications business led to the experiment of a free market in electric energy, which has been the case in Texas for many years now.  The prospective end of the tax credit for wind generation would be yet another step towards a totally free market in this regard.  While I think it is a good thing to generate some power from wind, we may soon be seeing the harm that comes from relying too much on legislation that produces artificial incentives for certain kinds of technologies.  But there is also a harm done when anyone, including a government, breaks a promise such as the promise of ten years of tax credits.  Let’s hope governments at all levels move toward providing a somewhat more predictable environment in which to do business, including the business of making electricity from wind. 

Sources:  The article “End of Wind?” appeared in the Dec. 2, 2012 print edition of the Austin American-Statesman, p. A1 and A10.  I also referred to the Wikipedia article “Wind power in the United States” for statistics on Texas wind generation.