You’d think ERCOT would have learned its lesson.
I warned last year that summer blackouts were coming to Texas; it is likely we would have had outages in August 2020 if not for lower electricity demand caused by the COVID-19 economic shutdowns. The winter outages that killed 111 Texans — and the close call on a mild April day just weeks later — should have been a wakeup call.
Yet ERCOT’s latest seasonal assessment says there’s less than a 1% chance of more blackouts this summer, citing a deceptively rosy 15.7% reserve margin projection for this summer and 28.8% for 2022.
Compare this to 2019, when our reserve margins were originally forecast to be a comfortable 19.6% but turned out to be just 8.6% entering the summer — at one point during the summer falling as low as 2% and triggering a Level 1 emergency. After years of overestimating and underdelivering, ERCOT continues using the same faulty reserve calculations, and it’s putting our grid, and lives, in jeopardy.
I am a relentless optimist, but ERCOT’s overconfidence is a slap in the face to the Texans it is supposed to serve.
The problem is straightforward, if not simple — reserve margin calculations overestimate performance of wind and solar, which make up a significant and growing chunk of our electric generation. Unlike natural gas, clean coal, and nuclear — which produce a near-constant flow of electricity with reliability percentages rarely falling below the mid-90s — wind and solar production fluctuates wildly. For example, in just one summer week in 2019, wind generated between 2 and 63% of its installed capacity.
Despite this variability, ERCOT continues to use the average output of wind and solar during high demand hours when calculating its reserve margins, instead of the low-end output. Therefore, when ERCOT says the reserve margin is 15.7%, that reserve margin is far from firm.
On the third page of the report, where ERCOT outlines some risk scenarios, all we’d need is for wind generation to fall below 2,000 MW — which happens about 5% of the time during periods of high demand — to trigger a Level 1 emergency. For every 20 peak-demand hours, we can expect one hour of wind bottoming out, and if demand is high enough during that time, the Texas grid will be in trouble
With this summer projected to be a sizzler, the risk of emergency conditions is far from as low as ERCOT contends. ERCOT’s planning processes need to be based on hard reality, not on virtue-signaling and blind faith that our current market structures are adequate to handle the additional variability in our electricity supply from wind and solar generation.
And the more unreliable energy we add to our grid, the greater this problem will become. As it stands today, wind and solar make up a third of our grid, and more reliable fossil fuels and nuclear are there to fill in the gaps. However, over the last decade, nearly 8,000 MW of these reliable power plants have been closed even while our population and economy have grown significantly. This means we are depending more and more on renewables that don’t always work.
ERCOT’s continued overconfidence in wind and solar — and bad policies that discourage building reliable generation — mean we should get used to blackouts unless something changes fast.
As Senate Bill 3 works its way through the Texas House this week and next, it is crucial that the bill retain its reliability requirement for electric generators, with improved language on the size and cost allocation of that requirement. It should also include direction to the PUC to develop a statewide electric reliability standard.
As federal subsidies and policies from the Biden administration continue to drive more wind and solar generation into the Texas grid, it is imperative that my former colleagues make sure we prioritize the reliable electricity we need.