Winter Storm Uri continued to command attention in the energy sector last week, dominating the conversation during the Gulf Coast Power Association’s annual spring conference.
“Every story does need a villain,” EDF Energy North America President Mary Anne Brelinsky said in a keynote address during the April 27-29 virtual event. “And it really was the winter weather that was the villain in our story.”
She said the “unstable” polar vortex hit the state with the destructive equivalent of a Category 5 hurricane. Texas’ infrastructure isn’t built to handle extreme cold temperatures for days on end, Brelinsky said.
“There was a decent amount of finger-pointing going on, but I do think this storm was an equal-opportunity villain,” she said, calling out across-the-board performance issues with natural gas, nuclear, wind and coal generation.
“It’s a mess,” Priority Power Management CEO Brandon Schwertner said, predicting a ripple effect of widespread and costly winterization requirements stemming from the winter storm.
ERCOT’s energy-only market has produced low-cost power for a decade, he said, but prices are poised to rise.
“As a state, we might have been a little bit over our skis,” Schwertner said. “Maybe we didn’t fully recognize the cost of balancing the grid with renewables with unwinterized pipes … and we had a one-in-a-century weather event that none of us expected to have … so it didn’t work. We didn’t live up to the obligation of providing reliable power.”
Other experts said Uri was not outside of the imagination.
“We’re seeing [demand] peaks in the winter that we see in the summer,” said Kristen Senechal, COO of transmission for the Lower Colorado River Authority. “Someone can call it a 100-year event; I’m not sure I’m convinced it’s a 100-year event.”
“I think it’d be very nice if we removed from our language ‘unprecedented,’” Austin Energy’s Karl Popham said. “Unprecedented winter storm, unprecedented heat wave, one-in-100-years … I think we can replace that with, ‘As predicted by climate change science.’”
Popham said planners can no longer rely on the past 100 years and must start using more realistic futures to inform infrastructure investment decisions.
Brelinsky said three of the past eight winters contained arctic patterns that stretched into the South. She said the situation is only poised to become more dire with continued customer growth in Texas and increased use of intermittent resources.
“Human beings tend to be fairly optimistic creatures and underestimate the probabilities of bad things happening,” she said.
If the ERCOT grid had collapsed, Brelinsky said, it would have taken four to six weeks to restore power to customers.
“Four to six weeks is four to six weeks too long,” she said. “It needs to be four to six days.”
“This cannot happen again,” AEP COO Lisa Barton said. “The question always that I think Texas wrestles with is what level of risk is the state willing to accept?”
Barton called SPP’s response to the same storm “a tale of two cities.”
“You have the system that I would say operated extremely well in SPP [with minor load shedding] … to [ERCOT] being within two-one hundredths of a frequency deviation from an interconnection-wide blackout,” she said.
The focus should be on how bad it could have been, not how bad it was, Barton said. She said grid planners examine the cost of making necessary changes versus “the cost of the status quo.”
Barton called the grid “an eclectic mix of new and old” that constantly needs investment, especially to endure more extreme weather.
Schwertner said the cold snap will translate into a bump in behind-the-meter infrastructure, driven by escalating transmission and distribution costs.
“People are tired of what has happened,” he said. “It’s not out of the question that [transmission] and [distribution] could become 80% of your bill in the not-too-distant future.”
February’s events mean that utilities should gravitate toward more price transparency with customers and customers could begin contributing more demand response and load flexibility, Schwertner said. “The market has woken up.”
He also said while his company has spent the past 10 years helping customers link to the grid, it’s now focused on keeping them off the grid through distributed assets.
“The world is going to look a lot different five years from what it does today,” Schwertner said.
Decarbonization and EVs
Several speakers agreed that even before Uri, the grid was ripe for restructuring.
“We are going to decarbonize this grid. That is going to happen. We need it to happen,” Calpine COO Andrew Novotny said. “And that is going to involve a significant amount of transmission that is going to get built. Not just because we’re going to connect new renewable resources … but we’re also going to need to electrify everything. We’re going to need to build new transmission on the demand side.”
Lynnae Wilson, CenterPoint Energy’s senior vice president of high-voltage operations, said her territory is seeing more projects successfully exit the interconnection queue.
“Historically, we’ve only seen about a quarter of studies mature,” she said. “Now, it’s more like 60%.”
Apex Clean Energy Vice President of Transmission Fred Von Pinho said the grid operators’ cluttered GI queues are a barrier to clean-energy goals.
“You have pretty significant renewable goals, but the generators by themselves cannot afford it and the queues are not set up to socialize those costs equitably,” he said.
ERCOT is an outlier among RTOs because load pays for interconnection costs.
Novotny said it’s time to revisit the ISO’s interconnection procedures so that generation shells out some of the costs. Transmission costs have tripled for end-use consumers in the decade, while wholesale prices have remained relatively unchanged, he said.
Britta Gross, RMI Mobility’s managing director, said utilities have to be “at the center” of vehicle electrification and ready additional resource capacity. She said in order eliminate 50% of transportation emissions by 2030, the country must have 70 million electric vehicles on the road.
“I don’t want to cast this out as, ‘It’s too daunting. Don’t start,’” Gross said. “We have to start. The grid goals are really tough, the building targets are tough. Everything is tough.”
Popham said Austin’s planned fleet electrification of 333 vehicles will save the city about $3.5 million over 10 years, even considering the costs of charging infrastructure.
Every electric vehicle within the city represents $385 of annual new revenue to a utility, Popham said. He said by 2033, Austin could add an extra $240 million of new utility revenue through EV adoption alone.
“And it’s different than load growth because the load profile is shaped completely different,” he said. “A lot more [charging] is done at night, it’s not about summer peaks and it’s not really seasonally adjusted. It just keeps chugging through … It’s not about competing with air conditioning [loads].
“Here in Texas, I call that spice on a rib. That is a lot of money hitting the bottom line.”