Great help in thinking through the problem, Lynne. Misdiagnosing the root causes and responding with NEW taxpayer-funded stranded assets certainly doesn't seem like a rational or helpful public policy response.
Why isn’t wind generation expected to be winterized like natural gas? It is in other geographies. If it is expected to be a growing part of the Texas energy mix, why give it a subsidized free pass? Let's require all wind generation to have de-icing, and retrofit the old. Then we can let the market decide how cost competitive it is. If we want to let the market drive things, let's do it fairly.
I wouldn't disagree with that conceptually. From an engineering/construction perspective, wind turbines in places like South Dakota or Iowa (or Denmark) are designed specifically for cold weather extremes, but that probabilistically the winter hazards have been far enough in the right tail in Texas that it's not been perceived as worth engineering for.
IMO ERCOT needs to do better longer-range forecasting and planning beyond 10 years, which may put more weight on winterization in Texas for *all* resources and therefore more likely to be incorporated in financial models and design specs.
If we are going to renewables and electric over fossil fuels, then fossil fuels can't be the only provider that is required to be winterized. Natural gas infrastructure is winterized in ND, WY, etc. In Texas, it mostly isn't economic to do so for the small % of the time they may freeze off. Natural gas can't be the whipping boy for wind failures. All for one and one for all, I say. Oh, and no wind subsidies. No longer needed.
Can appreciate a 'let every energy source compete fairly' approach to removing subsidies.
When doing so, it's worth noting at the outset that both renewable and non-renewable sources currently receive them – both from the US federal government and from the Texas state government:
Quantifying and finding ways to factor in environmental and health externalities from each source – including the environmental costs of mining materials used in some renewables; the non-recyclable nature of many batteries, wind turbine blades and other components, and solar panels; and methane emissions from working, marginal, and abandoned natural gas wells – is yet another challenge in allowing sources to compete on fair terms.
Yes, increasing interconnection is on the list (and it's one of the things highlighted in the Busby et al. paper). It's tricky because Texas rightly IMO wants to avoid triggering FERC jurisdiction by increasing the capacity for interstate commerce. I think avoiding the regulatory jurisdiction split has been one reason why it's been easier for Texas to quarantine the monopoly. If you want some background and a slightly different conclusion from mine, the David Spence and Darren Bush chapter in our 2009 edited volume is a good, careful analysis of the jurisdiction split question and interconnection. I'm thrilled that AEI has made the whole pdf of it available!
This is a lawyer's brief for the pro-forced energy transformation side of the debate.
What Texas went through was a massive failure of the centrally planned, renewables-infested Texas Grid. The debacle (the worst in electricity history) was not a 'market failure' or 'fish-rot-at-the-head' natural gas failure. It was a 'perfect storm' of government intervention that had many mothers and fathers--even grandmothers and grandfathers back to the 1930s.
True free market reforms would include ending wind/solar subsidies immediately to stop the grid takeover by the 'unreliables'. (Retirements needed also.) True reform should include abolishing ERCOT to put the 'obligation to serve' on utilities--and in a free market, legal contracts with customer classes where the Grade A corporate credit is on the line. (Utilities would not be franchised or rate regulated.)
Best practices and weatherization is nothing new, and why did not 'best practices' prevail in Texas, the breadbasket of the national natural gas market? More analysis is required that the official studies did not choose to investigate--'the why behind the why'?
Lynne, even if you disagree with this counter-analysis, you should cover this viewpoint. And you might own up to those who thought an 'energy market only' was the central planning answer to reliability.
Great help in thinking through the problem, Lynne. Misdiagnosing the root causes and responding with NEW taxpayer-funded stranded assets certainly doesn't seem like a rational or helpful public policy response.
Well said, Scott!
Excellent summation Lynne!
Thanks Matt!
Why isn’t wind generation expected to be winterized like natural gas? It is in other geographies. If it is expected to be a growing part of the Texas energy mix, why give it a subsidized free pass? Let's require all wind generation to have de-icing, and retrofit the old. Then we can let the market decide how cost competitive it is. If we want to let the market drive things, let's do it fairly.
I wouldn't disagree with that conceptually. From an engineering/construction perspective, wind turbines in places like South Dakota or Iowa (or Denmark) are designed specifically for cold weather extremes, but that probabilistically the winter hazards have been far enough in the right tail in Texas that it's not been perceived as worth engineering for.
IMO ERCOT needs to do better longer-range forecasting and planning beyond 10 years, which may put more weight on winterization in Texas for *all* resources and therefore more likely to be incorporated in financial models and design specs.
If we are going to renewables and electric over fossil fuels, then fossil fuels can't be the only provider that is required to be winterized. Natural gas infrastructure is winterized in ND, WY, etc. In Texas, it mostly isn't economic to do so for the small % of the time they may freeze off. Natural gas can't be the whipping boy for wind failures. All for one and one for all, I say. Oh, and no wind subsidies. No longer needed.
Can appreciate a 'let every energy source compete fairly' approach to removing subsidies.
When doing so, it's worth noting at the outset that both renewable and non-renewable sources currently receive them – both from the US federal government and from the Texas state government:
https://www.houstonchronicle.com/opinion/editorials/article/renewable-fossil-fuel-tax-breaks-313-17871906.php
https://www.texasmonthly.com/news-politics/energy-subsidies-fossil-fuels-renewables/
Quantifying and finding ways to factor in environmental and health externalities from each source – including the environmental costs of mining materials used in some renewables; the non-recyclable nature of many batteries, wind turbine blades and other components, and solar panels; and methane emissions from working, marginal, and abandoned natural gas wells – is yet another challenge in allowing sources to compete on fair terms.
Has anyone been talking about having ERCOT interconnect more with MISO and SPP, or is that a relative nonstarter?
Yes, increasing interconnection is on the list (and it's one of the things highlighted in the Busby et al. paper). It's tricky because Texas rightly IMO wants to avoid triggering FERC jurisdiction by increasing the capacity for interstate commerce. I think avoiding the regulatory jurisdiction split has been one reason why it's been easier for Texas to quarantine the monopoly. If you want some background and a slightly different conclusion from mine, the David Spence and Darren Bush chapter in our 2009 edited volume is a good, careful analysis of the jurisdiction split question and interconnection. I'm thrilled that AEI has made the whole pdf of it available!
This is a lawyer's brief for the pro-forced energy transformation side of the debate.
What Texas went through was a massive failure of the centrally planned, renewables-infested Texas Grid. The debacle (the worst in electricity history) was not a 'market failure' or 'fish-rot-at-the-head' natural gas failure. It was a 'perfect storm' of government intervention that had many mothers and fathers--even grandmothers and grandfathers back to the 1930s.
True free market reforms would include ending wind/solar subsidies immediately to stop the grid takeover by the 'unreliables'. (Retirements needed also.) True reform should include abolishing ERCOT to put the 'obligation to serve' on utilities--and in a free market, legal contracts with customer classes where the Grade A corporate credit is on the line. (Utilities would not be franchised or rate regulated.)
Best practices and weatherization is nothing new, and why did not 'best practices' prevail in Texas, the breadbasket of the national natural gas market? More analysis is required that the official studies did not choose to investigate--'the why behind the why'?
Lynne, even if you disagree with this counter-analysis, you should cover this viewpoint. And you might own up to those who thought an 'energy market only' was the central planning answer to reliability.
https://www.masterresource.org/texas-blackout-2021/puct-ercot-capacity-market-rethink/