The Texas Power Crisis: Don’t Blame Renewables, Don’t Blame Natural Gas — We Need Both
Updated: Aug 22, 2021
The power outages that occurred mid-February in Texas were shocking and the human suffering was awful. Unfortunately, lives were lost as more than 4.5 million people endured power outages and/or water shortages. Finger pointing has already begun, but it will take a while to fully unravel all that miscued. There was a confluence of factors that caused the outages – all of the above that failed: renewables, natural gas, coal and nuclear. Lessons will be learned, and the regulatory model will be improved. However, one thing is certain. Above all else, consumers want, require and are entitled to reliable energy and water. These services are essential for human welfare.
The world has changed and we will increasingly rely on renewables – primarily wind and solar – for our power needs. The Texas blackouts (and California during this past summer) is a stark reminder that priority number one is keeping the lights on. As the world moves toward decarbonization, alternative sources of power will be required to complement the increasing usage of renewables because wind and solar are not available 24/7. Yes, there was a colossal failure of all energy sources due to the extreme weather conditions, but this event should not derail the push for more renewables, nor diminish the role of natural gas to complement the intermittency and reliability of renewables. Natural gas should be promoted as part of the solution to a cleaner environment.
Texas is the country’s largest producer and consumer of oil and natural gas and the largest provider of wind-powered generation. Natural gas accounted for just over 45% of the State’s power generation in 2020, wind’s share was ~23% and surpassed coal-powered generation for the first time. Coal’s share of the power mix has fallen by more than half in 2010, from ~40% to ~18%. While frigid temperatures led to an epic failure by Texas’ power providers, it re-enforces the reality that thermal power is still required due to the intermittency and reliability of renewables.
Figure 1. 2020 Energy Use
*Other includes solar, hydro, petroleum coke, biomass, landfill gas, distillate fuel oil, net DC-tie and Block Load Transfer imports/exports and an adjustment for wholesale storage load
A week before the February 7th storm, wind generation surpassed 22,300 megawatts (MW) and accounted for more than 50% of Texas’ electricity. Natural gas, coal and nuclear made up the balance. Prior to the mandated rolling blackouts (necessary to protect the integrity of the grid) wind generation fell to 8,087 MW on Monday evening (11:00 pm) February 15th and natural gas surged to 43,800 MW — this is equal to 64% of total power generated. The next day, wind generation dropped further to just 1,228 MW and natural gas fell to 30,279 MW. Wind power generation recovered somewhat to 4,108 MW on Tuesday as natural gas plummeted to 26,634 MW.
Figure 2. Daily Electricity Net Generation by Energy Source
The Electric Reliability Council of Texas (ERCOT) underestimated the peak winter demand under extreme weather conditions and overestimated the resource adequacy (see Figure 3). Wind actually performed close to expectations, but the bar was set very low – just 3% of nameplate capacity. However, if measured against peak demand during a “normal” winter, wind dramatically underperformed. This highlights the need for adequate backup of reliable sources of power fueled by natural gas, coal and nuclear. Unfortunately, these sources of power also failed, most notably, natural gas.
Figure 3. Daily Electricity Forecast Demand and Net Generation
What caused it? The power sector and energy complex have not adequately weatherized their operations/equipment, despite lessons learned from the blackouts in February 2011 as well as recommendations (not mandates) from the Public Utility Commission of Texas (PUCT). Natural gas production within Texas fell dramatically from 21.3 Bcf/d during the week ending February 13th to a daily low of 11.8 Bcf/d on Wednesday, February 17, according to estimates from IHS Markit. The situation was exacerbated when ERCOT ordered rolling blackouts to protect the grid from crashing. This effectively cut electricity to critical infrastructure such as pump equipment, pipelines and processing plants. Natural gas supply for home heating and gas-fired power plants was dramatically curtailed. Prices at major Texas hubs set all-time records with the Katy Hub and Houston Ship Channel at over $350/MMBtu and $400/MMBtu, respectively. Prices at both hubs were $4.50/MMBtu the prior week, based on reporting by the U.S. Energy Information Administration (EIA).
What can we conclude?
1. The extreme weather condition was a one in a hundred-years phenomenon.
2. Regardless, the Texas infrastructure should have been winterized and the energy sector was ill-prepared. The track record is much better in colder regions where the equipment has been weatherized. The energy complex must be classified as providing critical infrastructure to avoid being shut-off during rolling blackouts. 3. Market rules and regulations need to be revamped in Texas. In an effort to keep customer costs low and promote renewables, the PUCT took on too much risk. Weatherization should have been mandated and as renewables’ share of the power mix grows and coal and nuclear plants are retired, more (not less) natural gas-fired power plants will be required as a back-up source. This is to ensure compliance with Rule #1: KEEP THE LIGHTS ON!