Why Does ERCOT’s Mess in Texas Mean That New York is Next?

Everyone is aware of the massive blackout and rolling outages in Texas due to the massive polar vortex that happened over President’s Day weekend.  What isn’t being discussed is how vulnerable New York and New England are to having the same exact thing happen to them.  I will begin with a simple discussion of why the blackouts in ERCOT are so bad, why it will take a week of above freezing temperatures to recover, and why New York is next.

The mess in ERCOT is best described as a five-failure event with a single cause: a massive polar vortex creating temperatures far below freezing across the grid.  What are the five failures?

Failure 1: Immobility of Power

Texas started to segregate itself from the larger electrical grids in 1935 when the Congress passed the National Power Act.  This act stated that transmission of power over state lines was to be regulated by the Federal government and created the Federal Power Board.  The FPB is the predecessor agency of the Federal Energy Regulatory Commission (FERC) that provides regulatory oversight of pipelines, electrical lines and other energy systems today. A total of 7 Texas electric utilities did not want Federal oversight and agreed to not send power over state lines, but did set up a system of interconnects between themselves.  This system of interconnects is what morphed into the Independent System Operator, Electric Reliability Council of Texas (ERCOT). ERCOT’s mission is to balance the smaller regional grids for electrical generation and electrical demand.

Since ERCOT was dealing with legacy systems and a method of operation that no power be sent out of the state, there are only four interconnect sites.  There are two connections with the Eastern Grid, one with Mexico and another with the Western Grid.  These sites simply do not have enough capacity to carry the majority of the load for large areas of Texas.  It is also difficult to transmit energy across the grids as each electrical grid operates on a different alternating current wavelength.  Variable Frequency Transformers (VFTs) must be used to isolate and sync the wavelengths. The transformers are expensive and cause large energy losses through resistance and heat.  So, the electrical grid of Texas is best thought of as an island with a couple of boats.  Texans and Texas operators also have preferred it historically.

When massive interruptions like the 2021 polar vortex hit, they cannot rely on others for large supplies. 

Failure 2: Natural Gas Freeze-Offs

ERCOT is now more reliant on large abundant supplies of natural gas to supply its grid with power.  Most of these plants are supplied from large intrastate and interstate natural gas transmission lines crossing the state, as well as supplies from its many oil fields and gas fields. During prior cold weather events, ERCOT was more reliant on coal fired power plants.  While Texas has a very pro-fossil fuels stance, the population in Texas has grown substantially today.  Thanks to shale fracturing, the supply of natural gas has grown to feed the system but these wells are relatively new.  What has not increased is the natural gas storage capacity to feed these new homes and power plants.

When natural gas is produced at the production oil or gas well, it is processed through a plant to remove impurities like H2S and separate out heavier hydrocarbons like propane (C3H8) and butane (C4H10).  The heavier hydrocarbons are then processed or shipped off to be processed.  The remaining mixture of methane (CH4) and a small amount of ethane (C2H6) is then compressed and put into a large interstate transmission pipeline that is connected to other pipelines and eventually delivered to a user to be used to make plastics, burned for heat or stored by a utility for use during the winter.  This storage is typically an underground formation that is geologically stable and capable of storing large amounts of natural gas.

When natural gas comes out of storage, it is saturated with water as these underground formations do get some amount of groundwater in them.  The wellhead gas must be processed just like when it was produced from the production well but its just less intensive as there’s usually no propane or butane to remove.  In both cases, production and storage, the gas is water saturated and must go through a choke valve to move to the processing plant.  This is where the majority of freezing occurs.  When gas or liquids move through a small orifice or valve, the venturi effect cools it.  If the external temperature is low enough, the gas mixture going through the valve will begin to form liquid droplets and eventually ice will form.  The ice clogs up the orifice making it smaller and smaller until the well ceases to flow.

Oil and gas operating areas in the northern part of the county take this into account when they build their wellheads.  They purchase heat trace electrical wires to provide heat to the choke valve and small diameter gathering lines to keep them flowing.  Some operators also put their wellheads in temporary shelters for the winter to eliminate wind shear from robbing the heat from the valve.  If the gas isn’t flowing, the operator isn’t being paid.  In much of Texas, it is rare that any operator would put heat trace on a valve as the ambient temperature rarely gets cold enough for the well to be frozen.  Unfortunately, this polar vortex impacted most production and storage wells in the state and the natural gas system was in short supply of physical gas to supply to anyone.  Supplies had to be brought in from other states to try and serve existing customers on the spot market.

Local Distribution Companies (LDCs) are responsible for delivering natural gas to homes and small commercial businesses.  They are responsible for procuring natural gas storage so that supplies of natural gas are available to meet winter demand.  Some LDCs own and operate their own storage while others contract it with other large midstream companies.  Surveying the EIA information for the past 5 years, Texas has not increased its natural gas storage to accommodate additional demand during winter.

Market Aside:

Natural gas is sold on a firm or interruptible basis and this is important for the rest of the paper.  Firm means that a buyer wants a specific volume of gas delivered at a specific meter on a specific day and time.  Interruptible service means that the buyer wants a specific volume of gas delivered at a specific meter but it can be delivered at the leisure of the shipper, the pipeline company.  Both types of sales have their use.  If power is expensive, a natural gas turbine electric generator will want gas and want it delivered specifically.  They need it to make money right now.  If a public electric or gas utility is purchasing the gas for storage, they may not care what time the gas is delivered since they are just going to put it away for later use.  In some instances, they may shift the delivery to another gas storage field to accommodate their own operations.  ERCOT does not have rules for natural gas fired generation suppliers

 to have firm or interruptible service for natural gas, only that there are interconnect agreements (i.e. Suppliers) that can provide the gas to be burned.

Failure 3: Renewables Don’t Operate During Freezing or Snow Events

Now it is time to blame those “evil” renewables.  ERCOT has roughly 20% of its power supplied by renewables.  The vast majority of this supply is from wind turbines but Texas does have some significant solar and hydroelectric power supply as well.  Both solar cells and wind turbines do not operate during freezing and snow events and that is the crux of the reliability issue.

Covering solar cells first, during most ice and snow storms, there is little to no sunlight available to power the solar cells.  It is also a little-known fact that solar cells are actually more efficient during colder temperature events.  The issue is winter output is lower because the sun is at a less than optimal angle for the panel and there’s less sunlight available to produce energy.  The polar vortex event also started at night with snow and ice so there was no solar generation during the storm.  This was known and forecasted.

Wind turbines are a bit different.  Wind farms do operate during some rain storms but not all the time.  This is due to the fact that as the wind moves across the surface of the blade, the temperature drops just like it drops in a choke valve.  Wind blades as well as airplane wings experience a venturi-like effect as air moves around them.  Just like that choke valve, if there is moisture, ice can form on wind blade and begin to add weigh down the blade.  This additional weight will do two things.  It can cause internal stress to the wing and cause it to deform.  It will also add additional sheer forces on the gearbox which turns the turbine.  This gearbox must be able to handle the additional stress from the weight of the ice on the blade.  As the blade continues to turn, more and more ice develops on the blade.  Hopefully, a sensor in the gearbox will trip and cause the wind blades to stop spinning.  If it doesn’t, the blade will eventually break and fly apart, possibly injuring people or causing property damage.

Wind turbines in Texas are not rated or constructed for cold weather conditions.  Basically, it is cheaper to not operate them during freezing conditions which does happen in across the state every year.  Operators then restart the wind farm after the cold weather has passed one or two days later.  What made this storm different is that there were wind farms that chose to operate as the storm came in.  This is evidenced by one photo where ice had formed on much of the leading edge of the blades in a perpendicular manner to the wind flow.  This would indicate the blade was operating with that additional weight. The blades, at least on this particular turbine, will need to be inspected and possibly replaced.  Some wind turbines are operating now that the storm has passed but it is slow, and is therefore slowing the full recovery of the electrical supply for ERCOT.

Failure 4: Power Generators and Electrical Equipment in Texas Isn’t Often Rated for Deep Cold Conditions

What also made this storm different is that prolonged cold conditions existed after the power outage.  Most storms in Texas last for a day or two around freezing and then followed by warmer weather.  This storm came with below freezing temperatures that were forecasted for 6 to 7 days. In events like this, electrical equipment must be insulated and rated to operate in those conditions.  Most gas equipment such as compressors and turbines, are not sheltered from the elements in a building.  They may have a roof to prevent the sun from heating surfaces during the summer but cold temperatures are an afterthought or even viewed as advantageous as compressors operate more efficiently in colder weather. There is a limit to this since more viscous (i.e. cold) compressor oil or gas turbine oil will cause the machine to shut down unexpectedly. 

All of this insulation costs money and housing gas equipment in buildings ads a lot of expense as there are safety features that become necessary when this equipment operates in a building.  It also makes the environment uncomfortable for workers during hot Texas summers.  For wind turbines that are not damaged, the turbine housing and other components are also not rated or insulated to operate in colder conditions.  Typically, these components would have electric space heaters nearby to keep them warm so they could function properly.  These space heaters cost extra and have to be purchased with the unit.  Since most operators don’t purchase them, wind generation must wait for temperatures above freezing to try and start back up again.

There is also the issue of electrical switchgear and other electrical components of the operating grid.  Most of this equipment does not have the space heaters inside to keep the components running properly.  Water may condense or even freeze inside these components and cause electrical damage since high voltage and water don’t mix.  This adds to the time delays and expense of restarting the grid since some gear may be rendered inoperable by ice and may have to be dried out before it can be restarted.

Downtown Building Aside:

There are some quite famous complaints made about large empty high rise office buildings in the downtowns of Texas having their lights on and having heat.  The reason these buildings have light and heat is because it is common for these buildings to have back-up generators powered by natural gas or diesel.  The local electric providers are not “stealing” power to keep these buildings on. There are very clear guidelines for critical electric and gas services in Texas.  Hospitals and government buildings are on this list, not high-rise office buildings.  Hospitals typically have these resources as well but that’s a function of their business managers.

Failure 5: Not Appropriately Planning for the Increased Population and Demand in Natural Gas

The backbone the natural gas supply has not been upgraded to keep up with demand from a growing population.  Texas has led the nation on net inflows of people from other states and the majority of this growth is in the top 20 population counties and rural counties have suffered a population drain.  So, the system is faced with high demand periods in concentrated areas while much of the renewable energy and natural gas is brought in from rural areas.  Much of the new natural gas production in the state has been constrained as there was not enough pipeline capacity to take it out of the Permian Basin where it is produced and deliver it to large population centers in the east. 

Texas gas utilities have not increased their natural gas storage to accommodate the increase in population.  This is in part because it was cheaper to simply buy additional supply from the large diameter pipelines crossing the state.  The massive market imbalances of the past few years lulled LDC’s into a false premise that additional supplies would always be available on the larger transmission pipelines to meet periods of high demand.  They also did not account for their own storage field wells would freeze off and prevent gas from getting to market when it was needed most.

So Why is NY ISO Next?

NYISO, the New York Independent System Operator, has some of the same big issues that Texas has.  Right now, New York imports roughly 30% of its electricity from various sources.  It is also becoming natural gas constrained as Gov. Cuomo continues to fight any expansion of natural gas resources or supplies from coming into the state.  Should a major demand event occur in New York after the closure of Indian Point, its possible the system could go down.  I will cover how New York fairs against ERCOT’s 5 failures.

Failure 1: Immobility of Power

NYISO does not have issues here.  NYISO is fully integrated into the Eastern power grid and has several connection points between PJM in Pennsylvania, NEISO in Vermont and Connecticut as well as importation interconnects with Canada in Buffalo, Cedars and Chateauguay.  The issue is that during peak demand times, power is crossing these interconnects at over $100 MWh.  The grid is being balanced but at a high cost relative to what is costs to generate power inside of New York State.

The shutdown of Indian Point is a large risk event as there is no generation coming online to replace it.  This is a 1,040 megawatt/hour facility that is responsible for a quarter of the nuclear generation in New York or 1/16th of all electric power generated in the state.  This leaves a large gap of dispatchable (ie. On-demand) power that will need to be replaced by other sources from Canada or the US.  NYISO has not installed additional interconnect capacity to accommodate for this lost generation. This is also significant as the majority of grid power supplied to New England is routed through NYISO first.  If the New England grid becomes unstable, power at Indian Point is now unavailable to be dispatched to areas to shore up supply on the NYISO grid.   In other words, New England’s instability could cascade into New York and take down its grid as well.

Failure 2: Natural Gas Freeze Offs

New York does have some significant underground natural gas storage facilities (229,238 million cu ft) but it has become increasingly reliant on pipeline supplies and some Liquified Natural Gas storage to meet additional demand.  This additional demand arose when New York replaced its coal fired power plants with natural gas.  New York hasn’t added additional underground storage capacity since 2009.  This means during a period of high demand; it is reliant on suppliers in Pennsylvania having wells that don’t freeze off.  Fortunately, the wells in closest to New York are “dry” gas meaning there are few hydrocarbons other than methane.  This reduces the likelihood of freeze offs but they can and will do so if demand is high enough and temperatures are near or below freezing.  This means that additional pipeline supplies will be at risk of not being able to meet demand IF a large system were to hit New York.

Failure 3: Renewables Don’t Operate During Cold Weather

Renewables in New York are rated for cold weather however, they may not be operating during high demand.  I have not found significant indications that the blades of wind farms in New York are heat traced. Heat tracing is built into the fiberglass blades would allow some operation during snow and freezing events. This is common in Scandinavia but is not anywhere else, including the far northern parts of Scotland which get very cold.  If a storm were to hit, those windfarms would not operate as the blades would be damaged due to a build up of ice on the blade.  Solar panels also would not produce electricity as there would be little or no sunlight available. New York does have significant hydroelectric power resources and these will operate during times of in climate weather.

Failure 4: Electrical Generation and Equipment is Not Rated For Cold Weather Conditions

This is not an issue for NYISO.  Generators and electrical equipment are rated for cold weather.

Failure 5: Not Planning for Increased Demand of Natural Gas and Electricity

Governor Cuomo has thwarted increases in the supply of natural gas to New York during his terms as governor.  He has banned hydraulic fracturing and additional pipeline capacity projects.  He then complained that natural gas suppliers cannot serve the needs of New Yorkers.  The pipelines feeding New York and New England are at capacity and cannot serve additional customers.  FERC has stated that without additional natural gas capacity, New England will face rolling winter time blackouts as early as 2024 due to the increases in population on its grid and service territory.  This is a failure to plan at the very top level and Governor Cuomo is largely to blame.

What Can New York Operators and NYISO Do Now to Prevent this Once Indian Point Closes in April?

There are actions that can be taken now to begin the process to ensure the NYISO grid has dispatchable power for a storm event.  However, they are not easy solutions to deploy due to regulations and environmental permitting issues.

Upgrade Existing Interconnections and Construct New Ones

New York currently imports roughly 20 to 30% of its energy from surrounding grids.  There is a need for additional capacity to meet peak demand if a major weather event occurred as renewable energy would likely be curtailed or unavailable.  The Champain Hudson Power Express was one such project.  It would deliver hydro-electric and wind energy to New York City but was fraught with many fights over labor and construction of voltage lines along the route.  A better option would be to expand existing interconnects or build new ones near those existing ones.  There are currently 2 other projects, one in Buffalo and one in the Eastern Hudson Valley, that NYISO would like to perform.  The Governor’s office should support these projects.

Increase Natural Gas Storage and Delivery Capacity to New York

New York has not increased the delivery and storage of natural gas in years.  This has been a very top-down rejection of the fuel by the Governor’s office in favor of a 100% renewable strategy with battery backup.  Today, the world’s largest battery center is located in Otay Mesa, CA.  It is at 250 MW rating for 1 hour.  This is not feasible for implementation in the near term.  Also, as more of the vehicle market shifts to electric vehicles, the grid will be required to deliver more energy over larger periods of time.  This solution is not viable as 250 MW for one hour is a drop in the bucket for New York’s winter and summer demands.

New York’s best option in the medium and long germ is to increase the delivery capacity and storage capacity of natural gas.  There are two natural gas pipeline projects that are being halted by the Cuomo administration.  The administration has also been hostile to increasing natural gas storage outside of the 20% onsite storage mandate for energy producers.  This is a bad policy as this onsite storage is either LNG or diesel fuel.  The plants that burn diesel for additional energy actually increase New York’s carbon footprint during the peak cold weather demand. The governor’s office should support increasing natural gas supplies and reduce New York’s carbon footprint.

Welcome the New Nuclear

New nuclear designs like thorium salt reactors offer new promise for clean energy without some of the large faults of water reactor designs.  While they are not fully tested, New York should be open to these new forms of energy when they become commercially available.  They are likely to be safer and cheaper as well.  Currently, New York’s laws do not recognize nuclear as a viable “renewable” or “no carbon emission” option.  Given that energy demand is still growing and if electrification of vehicles does occur, New York can’t afford to turn its back on this particular energy option.

In conclusion, I hope that the next New York Governor will consider energy stabilization and supplies to be of high importance.  The ERCOT outage has shown that a 100% renewable grid is NOT a viable solution for the modern age as renewables are unavailable during ice or snow weather events.  Commercial batteries are not ready to supply a large city for one or two days with electrical power, much less an entire state.  Critical infrastructure like the electricity grid needs to have an “all available” option to meet times of peak demand, not the icy frozen choices based on one man’s whims.

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