Why a predictable chilly snap paralyzed the Texas energy grid by Reuters

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© Reuters. FILE PHOTO: Winter weather caused power outages in Houston

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By Tim McLaughlin and Stephanie Kelly

(Reuters) – When Texans cranked up their heaters early Monday to counter declining temperatures, a record spike in electricity demand sparked a catastrophic chain reaction across the state’s power grid.

Wind turbines in the state’s northern panhandle have been blocked. Plants shut down when frozen pipes and components shut off fuel flow. A nuclear reactor in South Texas went dark after a five-foot section of uninsulated pipe was seized. Power outages spread rapidly across the country, causing millions to tremble in their homes for days, with fatal consequences.

It could have been much worse: Before dawn on Monday, the state network operator was “seconds and minutes” away from an uncontrolled power failure for its 26 million customers, said the CEO. One such breakdown occurs when operators lose the ability to handle the crisis through rolling power outages. In such cases, it can take weeks or months for customers to get full power again.

Monday was one of the coldest days in the state in more than a century – but the unprecedented electricity crisis was hardly unpredictable after Texas experienced a similar, albeit less severe, disruption during a cold snap in 2011. Nevertheless, the power generators in Texas could not winterize their systems sufficiently. And the state’s grid operator underestimated its pre-crisis need for reserve power capacity and then moved too slowly to instruct utilities to initiate rolling blackouts to protect themselves from a grid collapse, said energy analysts, traders and economists.

Early signs of problems came long before the forced outages. Two days earlier, for example, the grid suddenly lost 539 megawatts (MW) of electricity, or enough electricity for almost 108,000 households. This is evident from operational reports released by the state’s primary network operator, the Electric Reliability Council of Texas (ERCOT).

The crisis resulted from a unique confluence of weaknesses in the state’s energy system.

Texas is the only state in the continental United States with an independent and isolated network. This enables the state to avoid federal regulation – but also severely restricts its ability to obtain emergency power from other networks. ERCOT also operates the only large US network without a capacity market – a system that enables operators to make payments for power supply during severe weather.

After more than 3 million ERCOT customers lost electricity in a freeze in February 2011, the federal regulatory authorities recommended ERCOT to prepare for winter with the same urgency as in the height of summer. They also said that while ERCOT’s reserve power capacity looked good on paper, it didn’t take into account the fact that freezing weather could cause many generating units to go offline.

“In 1983, 1989, 2003, 2006, 2008 and 2010, there were severe weather events in the Southwest in cold weather,” summarized the staff of the Federal Energy Regulatory Commission and the North American Electric Reliability Corp. after the 2011 power outages in the state had examined. “Extensive generator failures overwhelmed ERCOT’s reserves, which ultimately fell below the level of safe operation.”

ERCOT spokeswoman Leslie Sopko did not comment in detail on the causes of the electricity crisis, but said that the management of the network plans to reassess the assumptions that are used in its forecasts.

The freezing was easy to see, said Jay Apt, co-director of the Carnegie Mellon Electricity Industry Center.

“When I read that this was a Black Swan event, I just have to wonder if the people who say this have been in this business long enough that they forgot or just got into it,” Apt said . “People need to realize that this type of weather is quite common.”

This week’s cold snap left 4.5 million ERCOT customers without electricity. More than 14.5 million Texans experienced an associated water supply crisis when pipes froze and burst. According to the PowerOutage.US website, around 65,000 customers were left without power on Saturday afternoon, even though temperatures began to rise.

State health officials have linked more than two dozen deaths to the electricity crisis. Some died of hypothermia or possible carbon monoxide poisoning caused by portable generators running in basements and garages without adequate ventilation. Officials say they suspect the death toll will rise as more bodies are discovered.

THIN POWER RESERVE

In the central Texan city of Austin, the state capital, the minimum temperature in February is usually between 5 and 9 degrees Celsius. In the past week, temperatures dropped to -14 degrees Celsius.

In November, ERCOT assured that the network was prepared for such a bad scenario.

“We have examined a number of potential risks under both normal and extreme conditions and believe that there is enough energy to adequately serve our customers,” said Pete Warnken, manager of resource adequacy at ERCOT, in a report published in this publication Month.

Warnken could not be reached for comment on Saturday.

Under normal winter conditions, ERCOT forecast a power reserve of around 16,200 MW. Under extreme conditions, however, a reserve cushion of only around 1,350 MW was forecast. This assumed a power failure of only 23,500 MW. During the height of the crisis this week, more than 30,000 MW were taken off the grid.

Other US network operators maintain a capacity market to deliver additional electricity under extreme conditions – and pay the operators continuously, regardless of whether they produce electricity or not. Capacity market auctions determine the price three years in advance that electricity producers will receive in return for an emergency.

Instead, ERCOT relies on an electricity wholesale market where the prices on the free market offer generators incentives to supply electricity on a daily basis and to make investments to ensure reliability at peak times, according to the economists. The system was based on the theory that power plants should make high profits when energy demand and prices rise – and give them enough money to invest in wintering, for example. The Texas legislature restructured the state’s electricity market in 1999.

LOOMING CRISIS

Since 2010, ERCOT’s reserve margin – the buffer between generation capacity and forecast demand – has fallen from around 20% to around 10%. This has put pressure on the generators during peak demand and made the grid less flexible, according to the North American Electric Reliability Corporation (NERC), a nonprofit regulator.

This low error rate triggered the alarm among energy traders and analysts early Monday morning when they observed a sudden drop in the electrical frequency of the Texas power grid. One analyst compared it to seeing a hospital patient’s pulse drop to life-threatening levels.

Too much waste is catastrophic as it would trigger automatic relay switches to disconnect power sources and cause uncontrolled power outages across the country. Dan Jones, an energy analyst at Monterey LLC, watched from his home office in Delaware as the utility frequency quickly dropped to the point that would trigger the auto shutdowns.

“If you’re not in control and let the equipment do that, it’s just a mess,” said Jones.

On Sunday afternoon around 3:15 p.m. (CST), the ERCOT control room signaled that it had run out of options to increase power generation to meet rising demand. Operators issued a warning that there was “no market solution” to the projected shortage, according to control room reports posted by ERCOT on its website.

Adam Sinn, president of Houston-based energy trading company Aspire Commodities, said ERCOT had waited far too long to tell utility companies to turn off power to customers to protect themselves from a grid breakdown. The problems are apparent a few days before Monday.

“ERCOT let the system get weaker and weaker”, said Sinn in an interview. “I thought: Holy shit, what is this network operator doing? He has to cut off the burden. “

Sinn said he started texting his friends on Sunday night, warning them to expect widespread outages.

“Seconds and minutes”

Early Monday morning, one of the state’s largest power sources – the Unit 1 reactor at the South Texas Nuclear Power Plant – stopped producing power after the small section of pipe froze at temperatures averaging 9 degrees Celsius. The grid lost access to 1,350 MW nuclear power – enough to power about 270,000 homes – after automatic sensors detected the frozen pipe and shut down the reactor protectively, said Victor Dricks, a spokesman for the U.S. Nuclear Regulatory Commission.

At around 2:30 a.m. (CST), the South Plains Electric Cooperative in Lubbock announced it had received a call from ERCOT to cut power to its customers. Inside the ERCOT control room, employees have made an effort to call utilities and cooperatives across the country to tell them to do the same as indicated in the operational messages published by the network operator.

Three days later, ERCOT boss Bill Magness admitted that the network operator had barely avoided the disaster of uncontrolled power failures.

“If we hadn’t acted,” he said Thursday, “it would be seconds and minutes (gone) given the amount of generation that was coming out of the system while demand was still rising.”

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