The Electric Reliability Council of Texas (ERCOT) has achieved a notable milestone in managing the state's power grid during the summer of 2024. Despite setting new record power demands on several days in August, ERCOT successfully navigated the season without issuing conservation warnings or resorting to extraordinary measures to maintain grid integrity.
This accomplishment stands in stark contrast to recent years and highlights the progress made in Texas's energy management. The success can be attributed to a series of reforms implemented following the devastating Winter Storm Uri in February 2021, which resulted in widespread blackouts and tragically claimed over 300 lives.
To address longstanding concerns about dispatchable thermal reserve capacity, especially during harsh winter conditions, the Public Utility Commission of Texas (PUCT) has taken significant steps. Last week, the commission awarded $5.4 billion in low-interest loan guarantees to 17 applicants for the construction of nearly 10 GW of new natural gas generating capacity across the state. This initiative is part of the Texas Energy Fund in-ERCOT loan program, signed into law by Governor Greg Abbott at the conclusion of the 2023 legislative session.
The high demand for additional natural gas capacity on the ERCOT grid was evident when the PUCT received an overwhelming 72 applications for 38.4 GW in response to its initial solicitation under the TEF program in May 2024.
While Texas appears to be improving its grid reliability, other regional grid managers faced challenges during the late-summer heat waves. Energy analysts Isaac Orr and Mitch Rolling provided a detailed analysis of issues experienced by three interconnected regions in the Eastern US during the final week of August 2024. The Midcontinent Independent Systems Operator (MISO), PJM, and Southwest Power Pool (SPP) all issued various alerts and warnings due to soaring temperatures.
"During Max Gen Warnings and Alerts, grid operators warn power plant operators that electricity supplies on the grid are getting tight and instruct generation owners to take steps to ready their fleets to meet the moment. During an EEA1, all non-firm exports are curtailed, and all available resources are committed to meet demand."
The analysis points to two major factors contributing to these grid issues: an over-reliance on renewables and imports from other grids. While both elements have roles in interconnected grid management, excessive dependence on either can lead to system integrity weaknesses.
The Texas experience during Winter Storm Uri serves as a cautionary tale. Critics of ERCOT's limited interconnection with neighboring grids overlooked the fact that those states were equally affected by the severe weather. Similarly, wind and solar were among the first generation sources to fail during the storm, highlighting the limitations of renewables in extreme conditions.
As Texas moves to restore stability to its grid, other US grid managers may face similar challenges unless they take comparable action. This situation also serves as a warning for the UK, whose grid is increasingly reliant on renewables and imports from neighboring grids. While the British Isles may not face the same summer heat and air-conditioning demands as the US, proactive measures are necessary to ensure long-term grid reliability.
The Texas case demonstrates that a balanced approach to energy sources, coupled with strategic investments in dispatchable capacity, can significantly enhance grid resilience. As the global energy landscape continues to evolve, policymakers and grid managers worldwide would do well to heed these lessons in pursuit of a more reliable and sustainable energy future.