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Unheard of – Two Factors Exacerbated Elliot Power Shortages

By August 14, 2023August 16th, 2023Energy Rant

The Energy Rant features content you will not find anywhere else, and this week we have blazing examples featuring two unpublished (go ahead and look) contributions to the grid crisis of Christmas weekend 2022 and winter storm Elliot.

A few weeks ago, Utility Dive reported that gas-fired generation represented 70% of the PJM unplanned outages during Elliot. That represented about a quarter of PJM’s capacity. The days of interest include Friday, December 23, and December 24. Here were the generation mixes for those days.

Hmmm. What didn’t fail? Coal and Nuclear. Why? Because they each come with months of fuel supply on-site. Natural gas supply is flaky, especially in the coldest weather, for the obvious reason that demand is high for heating and power generation – a blunt fact that keeps grid operators awake at night – but there is more.

Natural Gas Traders: Sorry, Closed for the Holiday

Less obvious was something I learned last week at the Mid-America Regulatory Conference (MARC). Bob Gee, Gee Associates, said, paraphrasing from my notes, “Utilities may run out of natural gas on cold weekends [like the Elliot situation] because gas traders are closed, and generators run out of fuel” – he said it, not me

I was stunned. Are you kidding me? The grid goes down because traders are sipping eggnog to numb the pain as they count the hours until the in-laws leave for the weekend?

More from my notes, “Gas system does not have reliability oversight. If we don’t set this up, we’ll have more outages like the last couple of years.”

The Electric Power Supply Association mostly corroborates what I understood from Mr. Gee, “Missed demand forecasts, issues with gas-electric coordination, issues related to grid operator emergency actions and processes, including generation dispatch and the extended holiday weekend played a large role in some fully functional and otherwise ready plants being unable to purchase gas when they needed it to run.” Walmart, Target, and Best Buy barely close for Christmas, but the fuel supply for power generation takes an extended holiday?

After further consideration, I do not believe regulatory oversight will fix the gas-shortage issue. The legal profession loves it because PJM sues generators for nonperformance. The generators can’t get fuel even though they have firm contracts (maybe not in all cases) with pipelines and gas brokers. Demand is excessive such that pipeline pressure drops below the needs of the generator. Utilities and customers need to let that fight unfold but assume it won’t fix anything. Instead, it’s time to get resilient.

Benefits of Diversified Electricity Sources Demonstrated

A perfect demonstration of the need for thermal power supply other than natural gas is provided by the almighty Energy Information Administration in the chart below. We see why grid operators insist on dispatchable thermal resources. PJM was lucky with a random boost of wind generation during the period. As we learned last week from Stacy Dore with Vistra Energy, typically, wind resources are robust at the outset of storms but fade as cold air settles in for days.

Elliot impact: 1.5 million customers lost power. Sixty-nine people perished. By comparison, the heinous fire that burned much of Maui to the ground killed 106 people (and sadly rising) [2]. Power outages are like neutron bombs. They kill people, but property is unharmed, and therefore, death tolls seem to get less attention.

Demand Response Failure?

FERC commissioner Mark Christie was part of a future-grid panel, and he said demand response and load management resources failed to perform during Elliot. Ok, I need to know more. Later in the week, I discussed load management opportunities with a national expert with a couple of decades of experience in the industry. He concurred with Mr. Christie’s assertions. There are essentially two reasons for the lack of load management during the storm, both of which stem from the fact that it landed on the holiday weekend.

  • Some load management resources were already curtailed and operating in their baseline configuration – nothing to curtail.
  • Other resources required manual dispatch, and those operators were drinking eggnog with the gas traders while hoping the in-laws would leave any moment.

Icy Roads Ahead

Load management will become increasingly difficult if heating loads shift to full electricity – even a modest percentage, like 25%. Combined with shutting down coal and nuclear plants, electrified heating loads in ERCOT and the Eastern Interconnection, at least, will constrain fuel supplies for power generation and heating. As I will describe in a future post that is in the queue, we must be much smarter with our approaches. This is my warning for grid reliability in deadly cold weather. It is not unlike The Wall Street Journal article Hawaii Officials Were Warned Years Ago That Maui’s Lahaina Faced High Wildfire Risk. Except I’m doing it before the disaster.

In the meantime, Michaels Energy is working feverishly to devise load management strategies for cold weather, which are much different than strategies for hot weather.

[1] North American Electric Reliability Corporation

[2] If you’d like to help recovery efforts in Maui, here are several way that you can pitch in:

Jeff Ihnen

Author Jeff Ihnen

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