What went wrong? Energy expert weighs in on Texas energy crisis

Texas

AUSTIN (KXAN) — It’s now become clear that Texas’ power grid was never designed to sustain a significant freeze much colder and longer than you’d see in a typical year?

But why not?

Atypical weather events are happening more frequently — and with more ferocity — than in the past, a fact Texans know all too well.

University of Houston Energy Fellow Ed Hirs studies how ERCOT works and said the writing was on the wall as far back as 10 years ago.

[After the 2011 blackout] there were studies, there were hearings, nothing was done to repair the systemic problem with the ERCOT market. The Public Utility Commission, the legislature, and the governor really decided there was nothing to do.

Ed Hirs, University of houston energy expert

KXAN’s Tom Miller: What went wrong here?

Ed Hirs: We had a spike in demand, and there weren’t enough generators available to come online to meet that demand. Some generators were taken offline because of weather — natural gas generators, coal generators, wind generators. To lose 40% of the generation capacity on ERCOT means there’s plenty of blame to go around.

Tom: Should the state have seen this coming? Who’s to blame here?

Hirs: Yes the state should have seen this coming. This has been out in the open. The 2011 winter debacle, which led to blackouts, including a major one across the Dallas Medical Center, certainly showed the shortcomings of the ERCOT model and the market design.

There were studies, there were hearings, nothing was done to repair the systemic problem with the ERCOT market. The Public Utility Commission, the legislature, and the governor really decided there was nothing to do.

They issued guidelines, but there’s no enforcement, there’s no follow-through on any of those recommendations to the extent that they would lead to substantial improvement. Incumbent politicians know that if the price goes up at the meter, or the price goes up at the pump, they don’t get reelected. There was always this kind of attitude of whistling past the graveyard, “Oh that’s a California problem,” well, that problem has now come home to roost in Texas.

Tom: What is it going to take to get the power grid up and running again?

Hirs: I would expect that in the normal course of events we’re going to need warmer weather, we’re going to need less demand on the grid, and we’re going to need the generators to rejoin the grid and provide power. This is going to take a process, very much like a recovery from a hurricane.

Tom: What changes need to be made so that this doesn’t happen again?

Hirs: When there’s a bureau that’s buying in the market and going for low price, and you have more generators than you need at a given point, they start competing against each other by cutting prices and cutting prices and cutting prices. With the price that they receive being less than their total cost, they wind up not only being unable to repay their shareholders, but reinvest to keep the plant available to operate.

That deferred maintenance adds up over time and before long you wind up in a situation like the old Soviet bureau, like the old Soviet economy. Nobody has reinvested the capital necessary to keep the grid reliable and active. We need to give generators an incentive to be ready to respond, to be online when needed. We need to find a way to pay them so that they can make a rate of return.

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