January 20th, 2022
Fossil fuels are not as reliable as you think. (And why renewables are the answer.)
As Texans, often we hear that our energy grid is unstable, especially during extreme temperatures. And policymakers are quick to call for more fossil fuel power plants as the solution. However, time and time again we see fossil fuels as the cause of the problem, directly causing grid instability. At Octopus, we talk about why green energy is cheaper for customers and better for the environment, but ultimately, the biggest reason why green energy is important is that it will stabilize the grid better than its fossil fuel counterparts.
ERCOT’s Winterization Efforts
While many people are frustrated with ERCOT, this entity actually has been the scapegoat for a much larger issue. Over the last year, ERCOT has undertaken multiple steps to ensure that power plants are properly winterized in light of last year’s Winter Storm Uri. Most recently ERCOT has stated that Texas is well prepared for winter, having evaluated 302 units for winterization and having inspected 22 transmission facilities. Power plants were required to have winterized by December 1, 2022 and several of which failed to winterize leading to penalties of $1,000,000 per day.
Natural gas producers have not winterized for 2022
While ERCOT can mandate a robust winterization check, if the fossil fuels supplying those power plants are not reliable, ultimately their efforts are limited in helpfulness. Despite ERCOT’s winterization efforts, Texas still lost about 1.3 gigawatts of electrical generation in the year’s first cold front as power plants faced supply issues tied to natural gas. ERCOT only has jurisdiction on the actual power plants tied into the grid, not the fuel powering these power plants. The gas wells and pipelines that supply fossil fuel power plants (oddly enough) fall under the purview of the Texas Railroad Commission (TRC), which also oversees rules and regulations governing railroads (as one might have guessed!). The TRC commissioners are elected by the public and campaigns are heavily influenced by oil and gas lobbies and their associated trade groups.
Thus, it’s no surprise when there are lax regulations on fuel supplies as additional regulations would cost oil and gas companies money — the same key contributors to those campaigns. Due to these loose regulations put forth by the TRC, gas wells and pipelines that feed into the grid are consistently unreliable. The biggest example of this occurred during Winter Storm Uri, when gas pipes froze due to lack of proper winterization. Even after Uri, the TRC has failed to actually ensure reliability of the wells and pipelines. We haven’t learned from these mistakes and when we had the slightest cold snap in January 2022, the exact same trend of wells and pipes freezing occurred, leading to an 1.5% drop in the overall expected winter capacity. Currently, Texas relies on natural gas as its greatest source of electricity generation. And with this particular fuel supplying such a large amount of power plants, we’re certain to have another Uri-type of event unless regulations for wells and pipelines change.
So why hasn’t the TRC required winterization of the gas wells and pipelines that fall under their purview? The natural gas lobby was able to write rules to have projects excluded from the winterization requirement because of a report needed to determine which natural gas producers are considered critical and therefore should be winterized. Natural gas producers can apply for exemption to the Railroad Commission of Texas in exchange for $150, meaning they can effectively opt out of having to winterize. While in November 2021, the Railroad commission adopted further rules stating that they can reject a producer’s application for exemption, it’s not clear the weatherization of pipelines is being taken seriously. Gas wells are not expected to be properly winterized until March 2023 — we will need to get through the next two winters on pure luck and not because of thorough planning.
What happened on January 1st, 2022?
Texas experienced this failure first hand on January 1st, 2022. The cold front drove natural gas producers to dump and waste nearly 1 billion cubic feet of gas, according to the Texas Commission on Environmental Quality. Although this cold front was not as extreme as the infamous Winter Storm Uri, this was the first time natural gas production dropped to the lowest level since last February, according to BloombergNEF data.
Even with the winterization checks performed by ERCOT, a total of 10 GW of fossil fuel plants were offline during the first weekend of the year, according to ERCOT’s records. These fossil fuel power plants are old clunkers and are simply not dependable. Over reliance on fossil-fuel energy is proving to be short sighted and detrimental as the state’s temperatures continue to plunge.
Renewable energy needs to take a bigger role in building grid resilience
Consider these supply failures as a warning sign of what’s to come. Temperatures are becoming more extreme. And the fossil-fuel infrastructure based on drilling, transporting, burning molecules has too many single points of failure to be resilient.
Solar power combined with batteries can eliminate nearly all of this. Once a solar panel is installed, there is no upstream supply chain that is required. Simply the sun. And battery storage helps ensure that the electrons are available when needed. As energy experts who participate in ERCOT, we don't see the problem as ERCOT’s management of strengthening generation through winterization, but fuel reliability, unreliable and aging power plants, and political incentives that don’t deliver reliable fuel for Texans.
ERCOT and the PUC have been scapegoats for what politicians know is the real problem — lax standards for upstream oil and gas. And their campaign financing doesn’t allow them to acknowledge or address the real problem.
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