By Ed Ireland
“Much of the generation named by ERCOT as qualified under their latest RFP is generation units that were recently retired, many because they could not compete with the artificially low prices that heavily subsidized wind and solar can offer, so they are still operational.”
The Electric Reliability Council of Texas (ERCOT), the planning agency for 90% of the state’s grid, has a wind/solar tiger by the tail. As the agency does not exchange power with its out-of-state neighbors to avoid federal (FERC) jurisdiction, it is looking at home for able, firm generation that wind and solar unfairly (via government intervention) put out of operation.
Background
ERCOT is (in)famous because its grid almost collapsed during Winter Storm Uri in February 2021. The Texas electricity grid had lost so many generators due to the storm that it was only 4 minutes and 37 seconds from collapsing, which would have required a restart from a “black start.” That would have left the Lone Star State without electricity for eight days or longer. ERCOT instituted emergency measures, including rolling blackouts, that saved the grid and its integrity.
As it was, hundreds of cold-related deaths and ruined lives and property otherwise represented the worst electricity (and energy) debacle in American history. Tens of billions of dollars of disputed power payments are working their way through the courts.
The state of Texas and ERCOT never want to be in that situation again.
The summer of 2023 pushed the ERCOT grid close to rolling blackouts on many evenings around 8 PM in July and August as the sun set and the wind stopped blowing, resulting in no solar power and little or no wind power. These situations occurred on many evenings during July, August, and September—with September 6, 2023, pushing the grid to a Level 2 emergency, which gave ERCOT additional resources to stabilize the grid.
Winter Preparations
To avoid more emergencies, ERCOT issued a Request for Proposal (RFP) to secure backup generation for the 2023-2024 winter. The RFP for “Firm Fuel Supply Service” would be for on-demand power generation from November 15, 2023, to March 15, 2024 with a due date of September 1.
ERCOT received proposals from five Qualified Scheduling Entities. QSEs are pre-qualified power wholesalers who buy and sell electricity on the wholesale market and act as intermediaries between individual independent generators.
The five QSEs that responded offered 32 different generating stations that could provide guaranteed backup power whenever ERCOT calls for it:
- All 32 Generation Resources were entirely natural gas-fired power generation facilities and were awarded $9,000/MW (the cap established by the Public Utility Commission of Texas).
- 31 of the 32 Generation Resources will be backed up by fuel if natural gas is not available.
- One “Generation Resource” offered natural gas storage to guarantee their ability to maintain their natural gas supply
- A total of 3,319 MW of FFSR was procured with a projected total cost of procurement of $29.9 million.
By comparison, the first Firm Fuel Supply Service ERCOT obtained (November 15, 2022, through March 15, 2023) was 43% more expensive for 13% less power capacity.
Since the off-peak daily clearing prices for natural gas generation averages $20 per MW, $9,000 per MW is high. However, these generators provide standby generation and guarantee it will be available whenever ERCOT calls for it.
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In addition to “Firm Fuel Supply Service” above, ERCOT issued another call on October 2, 2023, for additional winter generation, titled “Request for Proposals for Capacity,” even though ERCOT considers their grid an energy-only market. Proposals are due this November 6.
ERCOT specifically highlighted that grid reliability problems had been caused by (1) load growth, (2) recent and proposed retirements of “dispatchable Generation Resources” (which means natural gas-fired generators), and (3) the possibility that recent winter weather events could be repeated:
ERCOT has determined that if the ERCOT Region experienced a winter storm during the 2023-24 winter Peak Load Season comparable to Winter Storm Elliott in December 2022, the risk of entering into an Energy Emergency Alert (EEA) during the highest-risk hour (Hour Ending 8 a.m.) would be approximately 19.9%.
This would exceed the 10% probability level that constitutes an “elevated” risk under the standard ERCOT has employed for purposes of its studies conducted in support of NERC’s winter resource adequacy assessments. While ERCOT is not projecting that EEA conditions are likely to occur, ERCOT nevertheless finds this elevated risk of EEA unacceptable. ERCOT has determined that approximately 3,000 MW of additional capacity would be needed to reduce the probability of EEA below this 10% elevated-risk threshold.
Based on the risk identified in ERCOT’s analysis, ERCOT intends to issue a request for proposals (RFP) to procure up to 3,000 MW of generation or Demand response capacity for the winter 2023-24 Peak Load Season (December 2023 through February 2024).
ERCOT identified by name the mothballed generation that qualify to respond to its RFP:
- Ten named “Mothballed Dispatchable Generation Resources (as of December 1, 2023)”
- Four named “Seasonally Mothballed Dispatchable Generation Resources (as of December 1, 2023)”
- Seven named “Dispatchable Generation Resources that have decommissioned since December 1, 2020”.
Final Comments
ERCOT is serious about avoiding any repeats of the grid problems encountered in winter storms Uri and Elliott. Every available tool is being used to secure the necessary backup generation. Much of the generation named by ERCOT as qualified under their latest RFP is generation units that were recently retired, many because they could not compete with the artificially low prices that heavily subsidized wind and solar can offer, so they are still operational.
A better approach to the complex and expensive efforts ERCOT is going through would be for wind and solar generators to provide their own backup, enabling them to bid fairly with natural gas-fired generation. This approach would increase the value of wind and solar generation and reduce the burden placed on ERCOT to accommodate their unreliability. It would also reveal the actual levelized cost of wind and solar as being one of the most expensive forms of power generation. This approach would take the cost and operational burden off ERCOT and transfer it back to the generators where it belongs.
Requiring 90% plus dispatchability on power suppliers should deal with the subsidy mining wind farmers.
By they are the left’s favored darlings. Making them accept responsibility or punishing them is hardly likely.
some of the left’s
In the UK, almost all of the left’s and most of the “Conservatives”, also.
Count yourself lucky you have a few politicians that are vaguely realistic.
In the UK, only one “opposition” MP (Graham Stringer MP) is a realist.
There’s some furious thinking going on, though, on both sides of the house. Maybe some MPs have stepped outside the bubble, and are learning skepticism from their often well-informed constituents. There’s an election coming, remember.
The problem we have is trusting them not to revert back to their World Empire of Fascist supplied plan once elected and safe for another 5 years.
That is like ANTIFA and BLM and other such leftist rogues would act like Sunday school children
Tom says: “Requiring 90% plus dispatchability on power suppliers should deal with the subsidy mining wind farmers.” 90% of ZERO (when the wind stops and the sun doesn’t shine) is easily achievable.
The requirement needs to be 90% of some set of minimal output, hourly average/x% of name plate capacity, etc.
The winter could be mild enough that none of those additional resources would be needed, even mild enough that there would be no need to put any of them on alert. If these are out of commission facilities, surely something has to be done to make, and keep ,them ready in case the winter is not mild enough. This has a significant cost. Will those companies be compensated for their costs if it turns out they are completely unneeded?
A figure of $9,000 per available backup MW was arbitrarily set by Texas PUC as a cap on the amount paid for providing on-demand dispatchable generation. I don’t know all of the costs involved in “un-mothballing” gas generators and keeping them ready for near-instant operations on demand.
Anyway, a hell of a way to run a power system. Wreck it with excessively costly and unreliable generation then pay more to paper it over. Socialist/Fascist crony capitalism at its finest.
Crony capitalism is nothing more than another name for socialism.
They are just doing whatever it takes, for as long as it takes, to keep their jobs and benefits and pensions. Don’t count on them to object to anything green
Not exactly ‘Texas’ but still renewables….(UK style)
First defence of cheats, liars and scoundrels: Loudly proclaim that your opponent is doing/thinking what you yourself are doing/thinking
Bang on cue, enter stage left the ever reliable Grauniad:”” Detached from reality’: anger as Rishi Sunak plans to restrict solar panels
https://www.theguardian.com/environment/2023/oct/07/rishi-sunak-plans-to-restrict-solar-panels
(No new solar on existing/ancient/productive farmland at least)
Maybe it’s dawned on Richly Snakkatak that ‘eating food‘ 100% of the time is better for your one’s health than eating electricity 10% ## of the time.
Recall especially how the UK was burning coal for electricity during the recent heatwave AND shipping power to France while doing so.
## 10% = The generally accepted capacity factor for UK solar – make that 1% during winter.
Attached (again) is a screenshot of Putin’s recent words
A better approach to the complex and expensive efforts ERCOT is going through would be for wind and solar generators to provide their own backup, enabling them to bid fairly with natural gas-fired generation.
Simply demand a level playing field that every tenderer can only tender those electrons they can reasonably guarantee 24/7/365 along with FCAS or keep them. Then it’s up to the unreliables to decide how much storage they need and/or how much to pay reliables in order to lift their average tender from their typical output lows. But of course the lie of cheap solar and wind is immediately exposed for all to see.
If they had any, this whole mess would not exist.
Buit the stuff has been installed. Maybe if we cut all subsidies, these Ruinable Entrepreneurs can show us some real entrepreneurial skills, and find something productive to do with their on-and-off-again generators.,
But if the object of the whole exercise is to destroy the USA [and the rest of ‘the West’, including the UK, EU, Australia, etc.] then things won’t change.
Friendly folk who own wind and solar will be allowed – even encouraged – to pump power into the grid – when the wind chances to blow or the Sun to shine.
And if they can’t – it’s tough.
JoNova says“A perfectly good civilization is going to waste… “
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“wind and solar generators to provide their own backup” – there you go again, using logic in an illogical situation.
What is it about federal regulation that they are trying to avoid? Has Texas ever been hooked to the national grid? Are there other states, other than Alaska and Hawaii, that aren’t hooked to the national grid?
I live on the central Texas coast where the eye of Harvey passed over my well structured and insulated house while I was in Austin watching it on radar. Also survived the freeze without power, small gas cylinders and blankets kept us warm enough. Harvey’s strongest winds were just east of the wind farm which are in a windy enough place but where the wind dies both in the middle of winter and summer. More have been built unfortunately where future hurricane force winds will test them. Despite improvements we are still building too many susceptible structures, one with angled solar panels on a marine laboratory roof which, as many predicted, didn’t survive Harvey as well as the palm trees.
We knew four decades ago, more if you really do your history, about the limitations of the not so renewable energy, even somewhat mentioned in the preaching environmental books of the time. There is no excuse for this.
From the article: “ERCOT is (in)famous because its grid almost collapsed during Winter Storm Uri in February 2021.”
I hate when they give names to arctic/regular storm fronts.
So Winter Storm Uri appeared in February 2021. This must mean that 20 other arctic cold fronts preceded Uri in January, going by alphabetical order in the naming of storms, as is done with hurricanes.
So how ridiculous is this? This arctic cold front of February 2021 was the first arctic cold front since the first of the year to enter the U.S., and should have been named Albert, if you have to give it a name.
One or two arctic cold fronts per year don’t need to be named. You will never use up the alphabet naming arctic cold fronts. Unless maybe you start with “U”. Probably not even then. One or two arctic cold front excursions are what we get in the U.S. on a yearly basis.
Next thing you know, these bozos will be naming tornadoes.
I think they name them by season, so the alphabetically first storm “A” something or other was in late September 2020…
I don’t see the method to their madness.
Even if you start in September, that still means there were about four arctic cold fronts per month before you get to Uri.
I don’t recall any arctic cold fronts during that timeframe other than one in December and one in February of 2021 (which is usually the time period when these arctic cold fronts come down into the U.S.).
A regular storm front this was not, at least for this latitude. Never experienced anything like this except in 83/84 (El-Chichon effects) in my 57 trips around the sun. Always Stratospheric effects causes such breaches in the polar vortex.
From the article: “Based on the risk identified in ERCOT’s analysis, ERCOT intends to issue a request for proposals (RFP) to procure up to 3,000 MW of generation or Demand response capacity for the winter 2023-24 Peak Load Season (December 2023 through February 2024).”
So this 3000 MW would replace all the solar and windmill capacity, when the sun isn’t shining and the wind isn’t blowing?
Isn’t Texas lucky to have all these valuable natural gas assets!
If ERCOT was smart, they would just scrap the solar and windmills and put this 3000 MW back on the grid permanently.
This is only about 10% of the installed W&S Capacity. There are existing units that pick up some of the slack. The fact that not only these units but gas storage are included will make me sleep better this winter. There were several times this summer when we were oh so close to the edge.
Yes, forcing windmills and solar onto the grid is going to be a train wreck.
I see where the Oklahoma legislature is discussing the prospects of nuclear electricity generation in the State. The usual naysayers are in attendance with the usual arguments.
Would you really trust wind and solar plants to acquire their own backup?
Maybe the solution would be to estimate the annual cost of backup power, then tax wind and solar energy sales and use that to pay for ERCOT to procure it.
Would you really trust wind and solar plants to acquire their own backup?
Well demand a level playing field and they have to choose storage and/or partner with reliables. Who cares as long as it’s all 24/7/365 with FCAS? But as the Irishman replied when asked the way to Dublin he wouldn’t want to start from here. That’s the doomsters’ problem and why they have to double down on their unreliables until their inevitable tarring and feathering.
From the article: “A better approach to the complex and expensive efforts ERCOT is going through would be for wind and solar generators to provide their own backup, enabling them to bid fairly with natural gas-fired generation. This approach would increase the value of wind and solar generation and reduce the burden placed on ERCOT to accommodate their unreliability. It would also reveal the actual levelized cost of wind and solar as being one of the most expensive forms of power generation.”
If the solar and windmill people had to supply their own backup generation, they would go out of business.
Which is fine with me. They shouldn’t have been in business in the first place.
‘Turbine graveyards’ sprawled across Texas
A waste of space creating a vast Space of Waste
Windmills = Poor planning all the way down.
Not ready for primetime. Will never be ready for primetime.
The article’s reference gives us numbers to again estimate overbuilding of Wind & Solar (W&S):
To meet 100% of demand the available W&S must be increased by (100/(7.3 +.3))= 13.2 times current build. To estimate needed ADDED COST multiply 13.2X current W&S Inv. All this must be recovered through the ERCOT rate payers, while they continue to pay for existing costs and the “$9,000/MW (the cap established by the Public Utility Commission of Texas)” for any of the 3,000 MW needed for backup.
Insane plan?
869 MW (sic) for storage as “generation”. What misleading tripe. It’s no wonder Americans become more confused by topics surrounding energy with each passing day.
Even the 13 times wouldn’t do it. When the wind isn’t blowing hard enough, or when the wind is blowing too hard, NONE OF THEM WORK.
If you build a thousand tomes as many, it wouldn’t solve the problem. 1000x ZERO is STILL ZERO.
This is just part of the fiction – the ridiculous notion that intermittency becomes a non-issue if you overbuild with more worse-than-useless wind or solar installations. All it does is drive the costs into the stratosphere – it CANNOT PROVIDE THE ENERGY NEEDED.
Are the prices per megawatt available, or per megawatt hour provided? It makes a difference?
This sounds like fixed costs of some sort. Don’t we mean to say MWhr?
$9000 per MW makes no sense, it must be $9000 per MW/Hr which is $9.00 KW/Hr which is about 10 times higher than it should be.
In a sane world, solar and wind would provide no more than 10% of total power needs.
$9.00 per kW-h would be more than 70 times what I paid on my last bill, including all taxes. In other words, completely unaffordable.
I suspect that $9k was an upfront payment to help defray any initial costs and to just make the deal, and referred to the MWs committed in the deal.
Not too long ago electricity was 9-12¢ per KWh. $9.00 is more like 100 times more than it should be.
In a sane world, solar and wind WOULD NOT BE USED to supply ANY “grid” power, and would ONLY be used in remote locations without any grid connection, WITH a fossil fu powered generator as backup, of course.
Fossil FUEL (can’t edit, once again)
$9000/MW seems high only in comparison to regulated retail pricing.
Spain/Portugal peak power procurement in 2022 had 80000 euro/MW prices.
During Winter Storm Uri – the peak power price was set at $18000/MW, if I recall correctly. This is what was behind the “surprise” bills that some fools who were “buying direct” received; they signed up to contracts where their power was based on wholesale prices, not retail.
“Much of the generation named by ERCOT as qualified under their latest RFP is generation units that were recently retired, many because they could not compete with the artificially low prices that heavily subsidized wind and solar can offer, so they are still operational.”
The simple answer to this mess is this, businesses that receive subsidies should never be allowed to price their product lower than the general market value. They should have to charge market value or a small percent above market value because they are receiving so much help from the rest of us already.