Skip to content

Texas Power Grid Pushed To The Limit Again

May 14, 2022

By Paul Homewood


h/t Joe Public


It’s hot in Texas!




HOUSTON, Texas (KTRK) — ERCOT, the embattled power grid operator for most of Texas, is urging customers to conserve energy for a five-hour peak period on Saturday and Sunday as it confronts both unseasonably hot weather and six power generation facilities tripping offline.
The nonprofit agency’s CEO, Brad Jones, revealed the facilities going offline Friday afternoon resulted in the loss of 2,900 megawatts of power.

Jones added that with soaring temperatures expected for the second straight weekend, power demand will be pushed to the limit.
"We’re asking Texans to conserve power when they can by setting their thermostats to 78 degrees or above and avoiding the usage of large appliances (such as dishwashers, washers and dryers) during peak hours between 3 p.m. and 8 p.m. through the weekend," Jones said in a statement.

As of late Friday afternoon, all reserve generation resources available are operating, Jones said.

Why anybody should be the slightest surprised that Texas gets hot at this time of the year beats me! And it does not bode well for the real summer heat to come.

The real problem, of course, has been the failure to keep enough dispatchable capacity on stream in Texas.

Since 2010, 4 GW of coal power capacity has shut, with effectively no net replacement from gas or other dispatchable sources. Worse still, demand has risen by 15%:




Meanwhile wind power is only running at 17% of capacity:



And  they call it progress!

23 Comments leave one →
  1. Philip Mulholland permalink
    May 14, 2022 11:09 am

    It appears to have been hotter last Saturday than this weekend’s forecast.
    Meridional weather patterns in Texas bringing heat north from the Gulf, what a surprise.

  2. Gamecock permalink
    May 14, 2022 11:41 am

    ‘ERCOT, the embattled power grid operator for most of Texas’

    What does ’embattled’ add to the story? Journalists are really bad people.

    • Ray Sanders permalink
      May 14, 2022 12:08 pm

      I guess it’s a sort of reverse “soft language” as per George Carlin

      • Gamecock permalink
        May 14, 2022 2:39 pm

        Thx for link!

      • Harry Passfield permalink
        May 14, 2022 8:27 pm

        GC did some wonderful climate change spoofs. Great comic, RIP.

      • Gamecock permalink
        May 14, 2022 10:45 pm

        Gamecock is also GC. Just sayin’.

        Carlin had an amazing ability to comprehend the human situation, and to exploit it for comedy. It is humanity’s loss that he didn’t live longer.

    • Gerry, England permalink
      May 14, 2022 12:08 pm

      ’embattled’ means that on one side they have a bunch of morons who think windmills and sunshine temples can run a 21st century electricity grid and on the other their consumers who just want the power to stay on.

  3. David Wojick permalink
    May 14, 2022 3:23 pm

    Note that there is reliably no solar for most of the 3 to 8 pm peak period. Wind is typically low during heat waves. That 4 Gig of missing coal would sure be nice. Or a few trillion dollars worth of batteries.

  4. David Wojick permalink
    May 14, 2022 4:28 pm

    This may be of interest, but I have not explored it:

  5. David Wojick permalink
    May 14, 2022 5:39 pm

    The green view is blame climate change and poor planning. I agree that all that wind and solar is poor planning.

  6. Frosty Oz permalink
    May 14, 2022 6:03 pm

    In ERCOT, which operates as an energy-only market, the ability to offer and receive high prices for your generation is intended to stimulate plant to be available to operate for just a few hours per year (“peaking plant”).

    What is often ignored is that the high offer prices are not the sole source of revenue for such peaking plants. In fact, they are not even the majority source of revenue for such plants.

    What most peaking plants do is sell hedge insurance to power retailers, protecting the power retailer against high spot price outcomes. The retailer pays a premium for this hedge insurance against high prices, and this annual or seasonal premium is the primary revenue source for the peaking plants.

    If high spot prices eventuate, the peaking plant starts up and generates, earning the high spot prices necessary to pay out the retailer on the insurance.

    People seem to overlook that this is a very large incentive for the peaking plant operator to keep its plants fit and ready to generate into high price scenarios. Otherwise the operator will have unfunded liabilities on its hedge contracts.

    The hedge insurance contracts are basically quasi capacity contracts, written outside the dispatch system. So, although it is an energy-only market according to its rules, it has its own form of capacity contracts as a secondary market. You won’t know about them if you only read the ERCOT rules.

    What ERCOT has recently done is reduce the maximum price cap on offers and spot price outcomes by nearly half, from $9,000 to $5,000/MWh. This has the twin perverse outcomes of protecting retailers and consumers who failed to take out hedge insurance contracts, reducing the incentive to take out hedge contracts, and reduces the value of the hedge insurance contracts, making business as a peaking generator less attractive.

    And then they wonder why they are not getting enough dispatchable peaking generators entering the market and ensuring their units are available for dispatch.

    By contrast, the Australian National Electricity Market is also energy-only, with a similar secondary market in price cap hedges, and its maximum price cap is A$15,000 (USD10,000). In Australia, we are seeing new entrant gas and diesel peaking turbines prepared to enter the market whilst planning to operate only for 2% or so of the time. They can make enough money from their capacity hedges to support the capital cost of sitting idle for 98% of the time. Although running on fossil fuel, the fact they only run 2% of the time means their contribution to total emissions is minor. Yet they go a long way to saving the grid. And you won’t find anything about these hedges in the Australian NEM Rules either.

    • Harry Passfield permalink
      May 14, 2022 8:32 pm

      Sheesh!! Thanks for that enlightening!

    • Phoenix44 permalink
      May 15, 2022 8:18 am

      Very interesting. And of course the state intervened in a market working well from a position of ignorance in a simplistic attempt to reduce prices.

    • Gamecock permalink
      May 15, 2022 11:19 am

      Thx, Frosty.

      I’m shocked that a power company can make money running only 2% of the time.

      I’d also be shocked if anyone new gets into the business. Too much risk of government hammer crushing the business. You can get away with $9,000/MWh in private contracts, but public sale to the grid will result in the regulators knocking on their door.

      OT but related: We have a baby formula shortage in America. At its root is the FDA shutting down the largest producer in the country. The government is protecting babies by starving them. The fascist pigs in Washington may have finally overplayed their hand; this may start the unraveling of the regulatory state – in my dreams.

      • Frosty Oz permalink
        May 16, 2022 6:07 pm

        The point is, you don’t make your money from running. You make money from being paid to be available to run. It’s effectively an off-market capacity contract.

        The power retailer could also build its own plant and leave it idle for 98% of the year until required, but to do so it needs to take the view that it will need the spare capacity for 25 years,

        With the capacity contract, a specialist generator takes the investment risk, and can sell multiple contracts to multiple retailers for shorter terms (not in aggregate exceeding the size of the plant) and spread the investment risk across the whole market, not just one retailer. Spreading the risk across the market lowers the cost of capital and produces higher efficiencies than each retailer trying to right-size its own standby plant.

      • Philip Mulholland permalink
        May 16, 2022 6:50 pm

        Spreading the risk across the market lowers the cost of capital and produces higher efficiencies than each retailer trying to right-size its own standby plant.

        And this is how Capitalism works and why it is so much better than a Command Economy.

  7. Micky R permalink
    May 14, 2022 7:27 pm

    ” The heat is also colliding with some power plants going offline over the weekend for maintenance during the peak window of high temperatures. ”


    • M E permalink
      May 15, 2022 3:06 am

      Coinciding with -? Why don’t they write English or is this ” Engliish as she is spoke” ? Maybe they meant some power plants were offline for maintenance at the weekend when factories and office buildings were unlikely to need much power. Almost as bad as ” English as she is spoke” in New Zealand.

  8. Izzy permalink
    May 14, 2022 10:30 pm

    I have just spent five months having an exhausting and irritating ‘discussion’ with SSE re my electricity bill. Finally they got the figures correct and we could agree. At the end of that last hour long telephone call the SSE representative said he was duty bound to give me some advice on how to use less electricity and so keep my bills down.

    He said I should always switch off my electricity during the day and only switch it back on at night.

    • May 15, 2022 3:25 am

      This not the America I remember.

    • Micky R permalink
      May 15, 2022 1:26 pm

      Did you ask SSE if you could buy some cheap, reliable electricity generated from coal?

  9. Phoenix44 permalink
    May 15, 2022 8:19 am

    What’s “unseasonably” got to do with it?

    It gets thst hot in Texas. If you don’t have thd capacity to deal with it, it doesn’t matter when it gets that hot.

  10. Gamecock permalink
    May 15, 2022 3:08 pm

    ‘resulted in the loss of 2,900 megawatts of power’

    Or in 2030, when the wind dies down. When half your power is from wind, you lose half of it when the wind dies.

    It’s not complicated.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: