Wednesday, March 06, 2024

A more reliable Texas electricity grid at a lower cost

Bill King has an excellent blog post on the reliability issues with the Texas electricity grid, including during Winter Storm Heather in January, concluding with:

"Because of cheap natural gas prices and the significant contribution of wind and solar, Texans enjoy some of the lowest electricity prices in the country, running 18% below the national average. But that low cost comes at a price – an inherent lack of reliability in its grid. And it is a savings that is wiped out many times over when a storm like Uri does billions of dollars in damage, not to even mention the human toll.

The Texas grid held in this storm, but the long-term issue of building a reliable grid is Texas in far from over."

The core issue is that solar and wind are cheap but not reliable, yet they are displacing more reliable natural gas (referred to as "dispatchable power"). ERCOT is looking at very expensive ways to improve reliability, essentially subsidizing natural gas.  I have two thoughts on how to reduce this cost.

First, the crypto miners: they are a net good for Texas as they help pay for new capacity, but the state should not be paying them tens of millions of dollars when we need them to shut down so we can have their power during peak times. They’re welcome to take advantage of our cheap power 99.9% of the year, but the other 0.1% of the year when we need it, they need to go offline with no compensation. That should be the deal.

Second, I think it’s important to remember that rare rolling blackouts are not the end of the world. The problem with Uri was the power went out for days, but most people can handle losing a half-hour or hour of power just fine, even if it’s freezing outside. We don’t need to pay for 100% reliability – 99.99% is good enough (less than an hour a year without power) or maybe even just 99.9% (about 9 hours without power in small intervals spread over the year). The grid just needs to be robust enough that ERCOT can properly implement short-duration rolling blackouts when needed without the grid going down for days like Uri. The difference between 100% reliability, 99.99%, and 99.9% might not sound like much, but it could easily be tens of billions of dollars in extra costs that would have to flow through to ratepayers.

But overall I agree there will have to be limits on how low a percentage we allow dispatchable power to be of our power mix.



At 8:58 PM, March 06, 2024, Blogger George Rogers said...

Best option, hold renewables to the same standard as natural gas.

At 8:39 AM, March 08, 2024, Anonymous Bill Reeves said...

I agree with your conclusion but I take issue with your statement that renewables are cheap. They're only cheap because 1. The Feds give them a 7.5 cent tax credit per Kwh which allows them to make money with negative prices and 2. When you consider the total system cost of renewables (the amount of backup dispatchable capacity each Mw of renewables must have to deliver reliability), then their cost soars to far more than other sources. George is right: require all power supply bidders to guarantee supply volume for a specific period of time. This would require renewable bidders to bundle their supply with dispatchable backup capacity. Then the Federal renewable subsidies would be supporting better reliability rather than negative pricing that drives out ever more dispatchable capacity. Of course if we did that, there would never be another industrial scale solar or wind facility built.

Texas is justly famous for being "pro business" but being "pro-massively subsidized business that wrecks the grid" isn't the same thing at all.

Thus endeth the rant.

At 8:13 AM, March 11, 2024, Blogger TheCastle said...

Are renewables even a business if it can't survive without massive tax payer inputs? Its more like socialized energy, except its expensive energy. We'd be better off building new nuclear reactors and plants. Cheap, reliable, very little land consumed, only energy source we know exactly where all of its waste products are ait.


Post a Comment

<< Home