Order No. 202-21-1

Source: Department of Energy (PDF).

Anti-free market types have claimed that deregulation of Texas electricity markets is to blame for the blackouts earlier this month. They argue that the companies operating power generation facilities didn’t spend enough money to weatherize their plants because the expense would have eaten into their profits. Now comes a written order from the Department of Energy that undermines that argument.

Prior to the cold snap ERCOT submitted a request to the DOE for authorization to power up coal-, gas- and oil-fired facilities to operate at maximum capacity during the storm. The request was necessary because operating these “dirty” plants in the desired way was expected to violate federal emissions standards. DOE approved the request with caveats.

What can we learn from the request and DOE’s response?

First, that ERCOT knew the electrical grid, which relied heavily on renewable and natural gas energy, would be vulnerable in the storm and that thermal capacity needed to be brought online to mitigate the risk. Even if the renewable energy gas operators had hardened their facilities (out of the goodness of their hearts, perhaps), the risk to the grid would still have existed.

Furthermore, we can see that thermal capacity, especially coal, existed in latent form, available on an emergency basis. ERCOT’s reliance on thermal capacity was normally suppressed by environmental regulations, but the grid operator had no need to require hardening of the renewables-based or other infrastructure because it had a ready backup in place. The renewables operators knew this. It was reasonable for them to assume they could simply shut down in bad weather because ERCOT wouldn’t need them.

The last thing to know about DOE’s order is the caveats. One was that environmental penalties for operating the dirty plants were not waived. The other tried to constrain how long the dirty plants would operate, especially by raising the price ERCOT would pay for the power those plants produced (by about $400/Mwh over the pre-storm market price). It is not clear yet what effect these caveats had in practice during the emergency. They likely deterred ERCOT from spinning up the base load supply as much as was truly needed.

The DOE’s order shows that all the known technical risks had been mitigated in a rational way. Texas’s regulated energy marketplace functioned largely as it should have, with the possible exception that DOE tied ERCOT’s hands somewhat during the emergency.

29 thoughts on “Order No. 202-21-1

  1. No matter how it is parsed, blame for the catastrophic failure because of a predictable weather situation will still lie with Texas, it’s power system and legislators.

    If, in fact, there was a plan to unfreeze the coal plants early and that would have prevented this disaster then a regulatory obstacle would be handled later easily enough. After all, snubbing DC is a national pastime.

    The facts are simple. Power companies knew that cold snaps, not that rare evidently, would render the equipment inoperable. The gamble lost because this cold snap was statewide. It made little difference what fuel source since the exposed equipment froze.

    Sorry, another blame distraction flopped, IMHO.

    Liked by 4 people

          1. West Side Story was, and still is, one of favorite musicals. I’m not a fan of musicals generally, but that one stuck with me. Sondheim was the lyricist.

            Liked by 1 person

          2. I was lucky enough to be in a community theater production of WSS when I was 18. The local theater had mounted 2 productions earlier in my lifetime and both of my parents were involved (Dad as Lt Schrank, Mom choreographed), Finally got my shot and had to fight to be a Jet and not a Shark. ( I tanned easily in those days and, well, I kind of looked more Shark than Jet). Mom choreographed that production as well.

            No was. He still is. My stepmother is very close to him. She has done concerts and reviews throughout NYC with and for him over the many years of friendship. Even some of his failed projects produced some great songs. “Anyone Can Whistle” comes to mid as it is one of my Dad’s favorites.

            Bonus Question: Who wrote the music?

            Liked by 1 person

          3. Playing trivia on the internet is a bit like fishing in a barrel. I found that Sondheim both wrote the lyrics and the music.

            But the internet can be wrong. Or so I have heard.

            Your stage experience is really rather cool, especially with the family involvement. I love stories like that.

            Thanks.

            Liked by 1 person

          4. My pleasure.

            Leonard Bernstein was also involved in the music.

            And I’ll let you know when I find out that “Diana, The Musical” is going to be on NETFLIX. They taped the production last fall in an empty theater and plan to release a la “Hamilton” sometime this spring. My “Wicked Step Mother” plays Queen Elizabeth. The nickname she gave herself years ago, even before appearing in WICKED for a time.

            I got stories. I started on stage at age 8 in Camelot. And yes, Dad played Arthur in that production.

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    1. RE: “No matter how it is parsed, blame for the catastrophic failure because of a predictable weather situation will still lie with Texas, it’s power system and legislators.”

      That’s convenient, if blaming someone is important. But the observation is only convenient because the reasoning is circular.

      It you want to blame something, blame the storm. As DOE put it: “ERCOT is in the beginning stages of an UNPRECEDENTED cold weather event brought on by a RARE, southward excursion of the jet stream into the South Central United States. Temperatures for Sunday and Monday in many parts of Texas are forecasted to DROP WELL BELOW THE LOWEST TEMPERATURES EXPERIENCED IN SEVERAL DECADES, and ABNORMALLY LOW TEMPERATURES are expected to persist for several more days. This weather event is expected to result in RECORD WINTER ELECTRICITY DEMAND that WILL EXCEED even ERCOT’s MOST EXTREME SEASONAL LOAD FORECASTS.” (Emphasis added.)

      Notice, however, that the storm effects were anticipated before the event. The storm is not much of a handy scapegoat, either.

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      1. Blaming weather is a cute dodge.

        That is like blaming the mountain road for the failure of the brakes.

        Yes, the weather was unusual, but not that distant.

        Being part of the grid could have helped immensely. It did for El Paso.

        Liked by 2 people

        1. RE: “Blaming weather is a cute dodge.”

          Only if one refuses to accept that weather was the disruption that triggered the chain of events.

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          1. Yes weather was what caused the situation. But ignoring the possibility of it happening falls on the shoulders of those who had the power (pun intended) to prepare for it.

            The 7 P’s do come to mind here. Not preparing for worst case scenarios is poor planning.

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          2. RE: “But ignoring the possibility of it happening falls on the shoulders of those who had the power (pun intended) to prepare for it.”

            Nobody ignored anything. The DOE order proves that.

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      2. “It you want to blame something, blame the storm”

        That is the whole damn point. Duh. We would not be discussing this subject ad nauseum if the running dogs of the fossil fuel lobby and THEIR running dogs were not trying to blame renewable energy.

        Liked by 1 person

        1. We would not be discussing this subject ad nauseum if the running dogs of the environmental lobby were not trying so hard to make renewable energy blameless.

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          1. Since you refuse to follow your own good advice I will remain unwilling to let ignorant doctrinaire bullshit go unchallenged. Renewable energy WAS blameless. If there had been no windmills or solar farms at all the blackout would have occurred and been more severe anyway. The companies producing power did not want to spend the money needed to deal with such weather.

            Liked by 2 people

          2. RE: “If there had been no windmills or solar farms at all the blackout would have occurred and been more severe anyway.”

            That’s impossible to know. Without windmills and solar farms, the resource mix would have been weighted differently, probably with greater reliance on coal and nuclear that proved far more reliable in the actual storm.

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          3. The most legitimate reason for assessing blame is to learn from the experience.

            So, what are the lessons?

            1. Too large a portion of the base load was from wind.
            2. Natural gas was in shorter supply than anticipated due to the constrained delivery system and the high demand for direct home heating.

            3, Too many coal plants had been retired, and coal proved to be the most reliable backup.

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          4. Debatable. And could have possibly been prevented by following the recommendations of 2011 and 2014.
            The constraints on the system was due to lack of weatherization from 100 year weather events that are occurring at greater frequencies. Also lack of planning to increase production for direct home heating. A 10 day weather forecast is a pretty handy tool for ramping up production and storage of reserves.
            The piles of coal were frozen and the equipment to move those piles were also frozen.

            There is no such thing as “too many coal plants had been retired”. More either need to be retired or have carbon capture technology installed so that they can be used safely and cleanly.

            And I do have to ask: How would you feel about Dominion installing a coal fired plant next door to the compound with the associated dust and soot and toxic chemicals drifting around your grandchildren?

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          5. I don’t live next to the High Rise Bridge. I don’t live along the rail lines that run in and out of Norfolk or Newport News that are covered in coal dust because the trains run uncovered through those urban areas (You know the ones you demonize all of the time?)

            Liked by 1 person

          6. In your love of fossil fuels you left out the biggest lessons . . .

            1. Gambling with reliability is a bad idea. Lack of winterization brought down wind, gas, coal and even nuclear plants. With adequate investments, this would not have happened.

            2. Disconnecting from the grid is a bad idea. The experience in El Paso confirms that this did not need to happen. With national grid connections, this would not have happened.

            3. Gas needs to be stored and available at gas turbine locations. With a few days supply of gas in tanks this would not have happened.

            Liked by 1 person

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