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ERCOT, PUC, and deregulation got us here


cactusflinthead

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And a hearty LOL at the thought of the GOP giving even a passing thought of putting any regulation on the energy market here. They were willing to let old people die of covid for the economy. You think some dead people from this event will deter them?

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27 minutes ago, gsoda3 said:

really good post.  here's a c&p from vistra's current 10-k, which is two weeks shy of being a year old but still relevant.

 

 

 

it's really as simple as this.  which is why either 1.) that market cap at $9k needs to go or 2.)  we force the suppliers to maintain a minimal maintenance status wherein they can be brought online to produce within a week's notice.

I think it is both.  The market cap should go.  

Also, they need a capacity market.  If I remember how PJM worked, you sell in your capacity a couple of years in advance.  If there are 10,000k units of demand, then they will have an auction for 10,000k units of supply.  If I remember correctly, that is based off nameplate and reliability.  So if you are more reliable than historic, you can actually sell that additional capacity into the next incremental auction.  

It isn't perfect, but it is a hell of a lot better than the system Texas is running now.

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56 minutes ago, henrygandorf said:

meanwhile, in west hollywood, we haven’t had an outage in 3+ years. 

carry on. 

What?  There's an outing in West Hollywood every ten minutes.  

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1 hour ago, Beantown Express 2.0 said:

So how do I respond to a guy I work with in Indiana.  Total Fox News guy and he said all he is hearing is that this issue is all because TX used solar and wind power and that is what the problem is.  I saw the other posts in this thread that this is not the case but this is the problem with Fox News lying to the public.  Somehow renewable energy will be seen as the bad guy in this Texas disaster by 100 million people in this country not living in TX.  Pisses me off.

 

1 hour ago, MC Fresh Breath said:

 

You can never ever, win an argument with them.  No amount of facts, logic, e.t.c.  So you can either just call him a dumbass, depending on your work situation, or  you just ignore it and realize it doesn't matter what you say to them. Ever.  

 

Guy like this won't believe anything you say that contradicts what he heard on Fox News. The Fox News narrative is basically that liberals especially Obama are to blame. They don't need to hear anything else because it confirms their core beliefs.

I also don't believe there are any serious Dems in power that are seriously calling for an immediate end for non-renewable power generation. Now they might be calling for changes that lead to that result at some point in the future but I think everyone knows that we do not have the tech for it yet.

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4 minutes ago, PenelopeWitherspoon said:

I think it is both.  The market cap should go.  

Also, they need a capacity market.  If I remember how PJM worked, you sell in your capacity a couple of years in advance.  If there are 10,000k units of demand, then they will have an auction for 10,000k units of supply.  If I remember correctly, that is based off nameplate and reliability.  So if you are more reliable than historic, you can actually sell that additional capacity into the next incremental auction.  

It isn't perfect, but it is a hell of a lot better than the system Texas is running now.

also from the vestra 10-k

 

Quote

PJM also administers a forward capacity auction, the Reliability Pricing Model (RPM), which establishes long-term markets for capacity. We have participated in RPM auctions for years up to and including PJM's planning year 2021-2022, which ends May 31, 2022. We also enter into bilateral capacity transactions. PJM's Capacity Performance (CP) rules are designed to improve system reliability and include penalties for under-performing units and reward for over-performing units during shortage events. PJM's base capacity resources are those capacity resources not capable of sustained, predictable operation throughout the entire delivery year, but can provide energy and reserves during hot weather operations. The base capacity resources are subject to non-performance charges assessed during emergency conditions from June through September. Full transition of the capacity market to CP rules will occur by planning year 2020-2021. An independent market monitor continually monitors PJM markets to ensure a robust, competitive market and to identify improper behavior by any entity.

 

both ercot and pjm have day-ahead and real-time auction markets.  it would be a really good idea to have a a market going out at least 6 months if not a couple years.  do you know what the consequences are for under performing units (for ercot)?

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1 hour ago, hornmpa96 said:

Improving transmission infrastructure shouldn’t be an issue. The owners get to build that into their rates charged by the electricity providers assuming it’s approved. Centerpoint has changed its business plan recently to increase capex to increase its operating income in the future.

This is a power generation issue and Texas simply doesn’t invest in the capacity/weather-proofing for these events.

I never worked on that side, so less involved on the transmission side.  Worked in almost every other part of the chain, trading, power production, retail/commercial energy supply, etc...

 

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1 minute ago, HornOnTheBayou said:

 

i am trying to imagine a world in which you believe in a personal, interventionist god and yet, you can also imagine that despite that deity existing and being just, tucker carlson also gets to exist.

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30 minutes ago, gsoda3 said:

also from the vestra 10-k

 

 

both ercot and pjm have day-ahead and real-time auction markets.  it would be a really good idea to have a a market going out at least 6 months if not a couple years.  do you know what the consequences are for under performing units (for ercot)?

Those day-ahead and real-time markets are the energy markets.  PJMs capacity markets are much more long term (As are NYISO and NEPOOL or they were when I was last in the industry in 2016).  

If you do not deliver the energy into the market, you have to pay to replace the energy.  So, say you bid 100MW into the 8-9 AM hour for tomorrow.  You will get paid 50/MW.  Let's say your unit goes down in the AM and you cannot produce, you would have to go buy that 100MW in the real time market at the market price which is now 150/MW.  Basically, the cost to you is 100/MW.

On the capacity markets in PJM that are more long term, if you were to take a unit offline and you had sold into the capacity market, you would have to replace that capacity at whatever the market cost is.  So in the next incremental market, you would have to replace the amount you took offline or cannot produce due to reliability.

 

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On the green energy front, it isn't green energy that is causing this issue.  It is contributing as Wind is underperforming due to weather, but this is always the issue with wind.  I am not sure why ERCOT would have anticipated as much wind generation as they did KNOWING what the weather forecast was.  

For those that do not know, gas fired plants do not store nat gas on site.  It is delivered daily.  If there are issues with the gas lines (which there are), then this issue is outside of their control.  

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Wind energy is inherently unreliable.  Natural gas, for all it's many advantageous, can face market disruptions like we are seeing now.  Coal does not, and is the most reliable energy source in a crisis.  This never would have happened to our grid 15 years ago. 

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4 minutes ago, cactusflinthead said:

 

http://www.ercot.com/about/governance/directors

This is the Chair and Vice Chair:

Sally Talberg is a former state utility regulator and has 25 years of experience in energy and environmental regulatory policy. She served as a gubernatorial appointee on the Michigan Public Service Commission (MPSC) from 2013 through 2020, including over four years as chair under two administrations. Ms. Talberg also served as President of the Organization of MISO States in 2016. As a commissioner, Ms. Talberg served on various state, regional, and national boards and committees, representing the MPSC on electricity, natural gas, oil, infrastructure, and telecommunications issues.

Prior to the MPSC, Ms. Talberg was a senior consultant at Public Sector Consultants. There, she co-led the development of Michigan Saves, a nonprofit green bank that has financed over $200 million in energy efficiency projects, while also helping staff the state's wind zone board and offshore wind council. She has also served in an advisory capacity to commissioners at the Public Utility Commission of Texas and the Michigan Public Service Commission, addressing retail and wholesale market issues, facility siting, ratemaking, and other regulatory issues. Ms. Talberg also has experience with environmental and safety compliance and enforcement for drinking water and wastewater facilities.

Ms. Talberg holds a Bachelor of Science degree in Environmental and Natural Resources Policy Studies from Michigan State University and a master's degree in Public Affairs from the Lyndon B. Johnson School of Public Affairs at the University of Texas-Austin. Ms. Talberg lives in Michigan with her husband and two daughters.

 

Peter Cramton is Professor of Economics at the University of Cologne and the University of Maryland (Emeritus since 2018). Since 1983, he has conducted research on auctions and market design, with a focus on the design of complex markets to best achieve goals. Applications include electricity markets, financial markets, and auctions for radio spectrum. He has introduced innovative market designs in many industries. 

Professor Cramton has advised numerous governments on market design and dozens of bidders in major auctions. He is chief economist and advisor for startups in finance, insurance, and communications. He received his B.S. in Engineering from Cornell University and his Ph.D. in Business from Stanford University. He joined the ERCOT Board of Directors in October 2015.

 

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3 minutes ago, immamac said:

Even more of a reason to prosecute them for criminal negligence. 

Eh, you want the best folks on the board.  Both the Chair and Vice Chair seem very, very qualified.  And the Board isn't going to have input on the day to day.  Now, they should look into changing the overall market structure.  

A lot of people are getting angry, for good reason.  But the truth is, ERCOT picked it's market structure, and it has been known to be stressed by extreme cold.  They have been talking about changing that structure for years, but have yet to do so.  Any change to the market will necessarily cause energy prices to go up.  When folks are paying really high summer electric bills, how many of those people will be cursing ERCOT for that change?  They are almost damned in any situation.

 

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24 minutes ago, JohnLocke said:

Wind energy is inherently unreliable.  Natural gas, for all it's many advantageous, can face market disruptions like we are seeing now.  Coal does not, and is the most reliable energy source in a crisis.  This never would have happened to our grid 15 years ago. 

I would agree that 15 years ago the infrastructure would be in much better shape. I don’t know how coal will help if the  plants aren’t working due to frozen instruments and other shit breaking. Maybe you meant dropping coal at everyone’s doorstep to burn in their fireplaces/back yards?

 

This shit show has little  to do with what energy source is (not) turning turbines. 

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1 hour ago, Hmbre97 said:

And a hearty LOL at the thought of the GOP giving even a passing thought of putting any regulation on the energy market here. They were willing to let old people die of covid for the economy. You think some dead people from this event will deter them?

Yeah but policy to actually kill old people though. Cuomo isn't the only one.

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12 minutes ago, Sawbonz said:

I would agree that 15 years ago the infrastructure would be in much better shape. I don’t know how coal will help if the  plants aren’t working due to frozen instruments and other shit breaking. Maybe you meant dropping coal at everyone’s doorstep to burn in their fireplaces/back yards?

 

This shit show has little  to do with what energy source is (not) turning turbines. 

Nonsense.  Coal plants are working fine right now. So is nuclear.  The more you increase the production of your energy to unreliable sources, the more prone you become to outages. It's not complicated.  And here we are.

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6 minutes ago, JohnLocke said:

Nonsense.  Coal plants are working fine right now. So is nuclear.  The more you increase the production of your energy to unreliable sources, the more prone you become to outages. It's not complicated.  And here we are.

I'm sure others will be along to add more detail, but this is just completely wrong as far as the current situation is concerned.

https://www.bloomberg.com/news/articles/2021-02-16/frozen-wind-farms-were-just-a-small-piece-of-texas-s-power-woes

Quote

While ice has forced some turbines to shut down just as a brutal cold wave drives record electricity demand, that’s been the least significant factor in the blackouts, according to Dan Woodfin, a senior director for the Electric Reliability Council of Texas, which operates the state’s power grid.

The main factors: Frozen instruments at natural gas, coal and even nuclear facilities, as well as limited supplies of natural gas, he said. “Natural gas pressure” in particular is one reason power is coming back slower than expected Tuesday, added Woodfin.

We’ve had some issues with pretty much every kind of generating capacity in the course of this multi-day event,” he said.

 

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1 hour ago, PenelopeWitherspoon said:

Well, both coal and nuclear plants have had instrumentation freeze.  That could be because the plants were not properly weatherized.  I know that has happened in the past where the cold snap hits just in time.  

If only these power plants had some nearby heat source that they could use to make sure the instruments don't freeze.  Oh, well I guess the problem is unfixable.

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Believe what you want to believe, I really don't care.  Do you really expect an Ercot official to say "Well, shit, the problem is in our power mix. I think we overdid it on cutting back on coal and nuclear."   You notice that while the article noted that wind production was down 60% from last week, we got no such quantification on the "problems" with coal and nuclear"  Wind has gone to shit this week, and we can't get enough natural gas. Once again, it's not complicated.

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30 minutes ago, JohnLocke said:

Nonsense.  Coal plants are working fine right now. So is nuclear.  The more you increase the production of your energy to unreliable sources, the more prone you become to outages. It's not complicated.  And here we are.

either you are a fucking moron or a liar, either way you earned a rare cr neg rep for this one. do better

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1 minute ago, JohnLocke said:

Believe what you want to believe, I really don't care.  Do you really expect an Ercot official to say "Well, shit, the problem is in our power mix. I think we overdid it on cutting back on coal and nuclear."   You notice that while the article noted that wind production was down 60% from last week, we got no such quantification on the "problems" with coal and nuclear"  Wind has gone to shit this week, and we can't get enough natural gas. Once again, it's not complicated.

It takes effort to be this dumb. 

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7 minutes ago, JohnLocke said:

Believe what you want to believe, I really don't care.  Do you really expect an Ercot official to say "Well, shit, the problem is in our power mix. I think we overdid it on cutting back on coal and nuclear."   You notice that while the article noted that wind production was down 60% from last week, we got no such quantification on the "problems" with coal and nuclear"  Wind has gone to shit this week, and we can't get enough natural gas. Once again, it's not complicated.

what are your sources for your claims?

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40 minutes ago, JohnLocke said:

Nonsense.  Coal plants are working fine right now. So is nuclear.  The more you increase the production of your energy to unreliable sources, the more prone you become to outages. It's not complicated.  And here we are.

Wrong.  Plants of all types are having instrumentation freezes.  Are you really this stupid?

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I just went to ERCOT's generation data and pulled down the daily generation by type in 15 minute intervals for all of January 2021 in the fuel mix reports from here:

http://www.ercot.com/gridinfo/generation

it is a straightforward spreadsheet that breaks it all down cleanly.  quick pivot table on it and here are the totals and daily averages by fuel mix for january:

image.png.e88ffa72a5464341d236774b254a5565.png

We will see what those numbers look like for 2/16, 2/15, 2/14, and 2/13 soon enough.

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48 minutes ago, JohnLocke said:

Nonsense.  Coal plants are working fine right now. So is nuclear.  The more you increase the production of your energy to unreliable sources, the more prone you become to outages. It's not complicated.  And here we are.

Link showing coal fired plants are at 100% capacity?

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