Mike Nasi A Debrief of the Texas Power Outages & The Financial & Policy Implications Partner, Jackson Walker LLP, Senior Advisor, Life:Powered ...
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A Debrief of the Texas Power Outages
& The Financial & Policy Implications
Mike Nasi
Partner, Jackson Walker LLP,
Senior Advisor, Life:Powered
NCC 2021 Spring Annual Meeting
April 27, 2021
© Jackson Walker LLP JW.com
2
We Have Been Dodging the Bullet for Several Summers
In August 2019, the
EEA 1 events
occurred on days
following the day of
highest demand.
Had the wind been
low on the day of
highest demand, a
shortage would have
occurred in both
2019 and 2020.
Source: ERCOT
For more information, visit lifepowered.org.
The Bullet Hit Texas This Time: February 15 – 19
Installed Capacity February 9-19
80000 Wind 28% Wind Avg 9% Forecast Demand
Solar 5% Solar Avg 1%
Gas 49% Gas Avg 61%
70000 Coal 12% Coal Avg 19%
White space = Shortages
Nuclear 4% Nuclear Avg 9%
Generation and Load (MW)
60000
Solar
50000
Wind
40000 Gas
Coal
30000
Demand High – Wind Low: Margin Disappears, Nuclear
Prices Soar, System Disruption Triggered
20000 Demand
10000 Demand Low – Wind High: Gas & Coal
Pushed off Grid due to Negative Pricing
0
2/6/2021 2/8/2021 2/10/2021 2/12/2021 2/14/2021 2/16/2021 2/18/2021 2/20/2021
Source: Energy Information Administration Hourly Grid Monitor
For more information, visit lifepowered.org.
The Night the Grid Almost Went Down for a Month
5
The ERCOT Market Exchange Value
During the ONE WEEK (of Winter
Storm Uri Was Larger than the
PRIOR 4 YEARS COMBINED
6
7
8
9
10
Lack of Wind/Sun
+
1112
MYTH BUSTING: This Event Was NOT Just About Winterization –
It Shows that Texas Has a Dispatchable Capacity Shortage
Texas would have still endured over 24 hours of outages even if all thermal remained online
90000
Actual Generation Prior to Blackout Projection for Blackout Days With No Failures
80000
Blackouts
70000
Generation and Load (MW)
Solar
60000 Wind
50000 Gas
40000 Coal
30000 Nuclear
20000 Demand
10000
0
2/12/2021 2/14/2021 2/16/2021 2/18/2021
Source: Energy Information Administration Hourly Grid Monitor
For more information, visit lifepowered.org.MYTH BUSTING: The Premature Retirement of Coal/Gas
Over the Past Five Years WAS a Major Contributing Factor
- There would have been 80% fewer hours of outages if they were still around
90000
Projection for Blackout Days With No Failures
Actual Generation Prior to Blackout
and Restoration of Retired Coal and Gas
80000
70000
Generation and Load (MW)
60000 Solar
Wind
50000
Gas
40000
Coal
30000 Nuclear
Retired Coal &
Gas = Lost Margin Demand
20000
10000
0
2/12/2021 2/14/2021 2/16/2021 2/18/2021
Source: Energy Information Administration Hourly Grid Monitor
For more information, visit lifepowered.org.THE BUFFER WE LOST – 6200 MWs in 5 years
15ADDITIONS OF
INTERMITTENT RESOURCES
(Wind)
16ADDITIONS OF
INTERMITTENT RESOURCES
(Solar)
17And Gas Additions Did Not Fill the Gap
Annual capacity change of natural
gas, wind, & solar since 2015MISO Concerns = ERCOT Harsh Reality
-Renewable Penetration > 33% Causes Problems
19WILL THINGS GET
BETTER OR
WORSE?
© Jackson Walker LLP JW.comSUMMER – Will We Keep Dodging the Bullet?
90000
July 16, 2018: Close to
80000
Level 1 emergency
70000
Wind +
August 13 and 15, 2019:
Generation and Load (MW)
60000
Solar
Level 1 emergencies, 1
50000 GW away from Level 3
Thermal
emergency
40000
30000 August 14, 2020: Close
Extreme to a Level 1 emergency,
20000 Demand
likely a Level 3 if not for
10000 reduced demand due to
COVID-19
0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Estimated generation and load for a summer day with low wind and solar output, normal
thermal outages and high peak demand.
Source: ERCOT
For more information, visit lifepowered.org.This summer will be extremely tight, if not a big problem
ERCOT Report: Low
risk of outages,
sufficient generation to
meet summer demand
based on expected
system conditions.
Reality: Shortages are
likely with any
combination of low
wind and solar and
high demand
1Reserve margins include 1,734 MW of ancillary service reserves that are ordinarily held back until an emergency is declared.
2An additional 2,341 MW of emergency resources are theoretically available, according to ERCOT’s Summer SARA report.
Less than 1,000 MW of reserves after deployment of emergency resources indicates a need for rotating outages.
Source: ERCOTWINTER – The Bullet Looks to Hit Again
80000
70000
60000 Wind +
Generation and Load (MW)
Solar
50000
Thermal
40000
30000
Extreme
20000
Demand
10000
0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Estimated generation and load for a winter day with low wind and solar output, normal thermal outages, and high peak demand.
Source: ERCOT
For more information, visit lifepowered.org.A PREVIEW OF SHOULDER MONTHS TO COME
MILD WEATHER – STILL PROBLEMS: EMERGENCY CONDITIONS CAUSED BY LACK
OF ADEQUATE BUFFER AS SOLAR DROPS OFF, DEMAND STAYS, & WIND LAGS
Source: ERCOT
For more information, visit lifepowered.org.CURRENT POLICY
DEBATE IN TEXAS
LEGISLATURE
© Jackson Walker LLP JW.comEmergency Alerts, Homeowner Consumer
Securitization
Alerts &
Backup & Rate Plans
Rate Plans
Protection
Backup & Relief Coops REPs
HB 12 HB 16
(Raymond) HB 3460
GRID RELIABILITY
(Hernandez) HB 3544 HB 4492
HB 17
(Holland) (Paddie)
(Deshotel)
SB 3, Sect. 15
SB 3, Sect. 1
SB 2194 (so the public knows this will SB 1580
(Hancock)
SB 1757
(Hancock)
(Schwertner)
(Schwertner)
SB 1279
NEVER happen again) SB 1950
(Paxton)
(Hancock)
Weatherization Market Reliability Accountability & RRC-PUC-TCEQ
ERCOT & PUC
Reform Coordination
Out-of-Market Fix Market Refinement Governance Coordination
Weatherization: Reserves: PUC/RRC:
Firming: PUC: TERC:
HB 11 (Paddie), HB 3749 Transmission: SB Capacity ERCOT: HB 1501
HB 4466 (King, P) HB 10 & 3627 (Paddie) HB 13 (Paddie)
HB 2000 (Huberty), (Lucio, III) 1281 & 1282 Market: HB 10 (Paddie) (Dean)
SB 1278 (Hancock) SB 857 (Zaffirini) SB 3, Sect. 3
SB 3, Sect. 12 SB 2109 (Hancock); HB HB 4378 SB 2 (Hancock) SB 1225 (Huffman) (Schwertner) SB 1750
(Schwertner), (Schwertner) SB 3, Sect. 13 4502 (Vasut) (Paddie)
SB 1316 (Lucio) (Hancock)
SB 1682 (Hancock) (Schwertner)
SB 2079 (Menendez)ANIMATED EDUCATIONAL VIDEO SERIES ON ELECTRICITY
(more coming soon!)
VIDEO 1 - Energy 101: Why We Need Electricity
https://youtu.be/ZfrBnddgFAU
VIDEO 2 - Energy 101: The Electric Grid
https://youtu.be/WiMtU6O1SxM
VIDEO 3 - Energy 101: Where Electricity Comes From
https://youtu.be/AKuoIeupGHc
VIDEO 4 - Energy 101: Energy Density
https://youtu.be/6d-HGzZHPG4
VIDEO 5 - Energy 101: Mining and Rare Earths
https://youtu.be/yu3mkFpiGmo
VIDEO 6 - Energy 101: Environmental Technology
https://youtu.be/aodsngzbZqA
27QUESTIONS?
CONTACT INFO:
Mike Nasi
mnasi@jw.com
512-736-9200
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