By Kay A. Modi, JHCGA's Energy Analyst in Residence
The US electric grids transport a variety of power sources and each section of the US has a different mix of renewable, nuclear, hydroelectric, and fossil fuel-fired plants. The future growth of the US economy requires increased supply of electricity with adaption to climate change objectives and transitional power planning. The basis for management of these sources is optimal economics to deliver the least expensive power to the consumer within the constraints of the entire bulk electric system (BES, previously referred to as the grid). Maximum peak demand of electricity sets the amount of power sources built with utility contracts. Peak demand is based on hottest period in the summer and coldest period in the winter. Businesses are locating near renewable sources to meet corporate goals and consumers are selectively contracting with them for payment of electricity. Consumers’ choice of renewable power supports development of these energy sources. Unfortunately, it is misunderstood that payment is not the same as delivery of electricity to a customer. Last year’s failures in Texas have drawn criticism of the loss of life and colossal damage to infrastructure when the BES was not properly managed. These issues provide a complex challenge for the supply and demand aspects of electricity management, now and in the future.
Power production mix is changing slowly as older power plants are retired and replaced. The 1960-70s era of building coal-fired plants or nuclear power plants means that the end of their assets’ operational life is currently impacting capacity for electric generation. Predominantly, replacements have been natural gas-fired power as pipeline infrastructure has expanded. The diagrams below from the Energy Information Administration (EIA) show annual tracking of power produced (i) and grid sector illustration from the Federal Energy Regulatory Commission (FERC) (ii). 2020 marks a pivotal year in which the power supplied by nuclear was slightly more than coal. The uptick in coal-fired production for 2021 can be attributed to the maximized usage of coal assets soon to be retired and higher prices of natural gas.
The continental US and lower Canada electrical transmission infrastructure is divided into two large sections of east and west plus a small section with the majority of Texas (not all). With few exceptions, these sections do not have transmission flow between them. The sections must stand alone in their ability to reliably transmit power supply. The average US consumer experiences about two hours per year of electricity loss which validates the reliability of the BES (99.97% service).
A factor near 1.5 times the power used during peak electricity demand is essential in the capacity of electric power plants for functional reliability within each BES section. Spinning reserve is the ability of a power generation source to immediately respond to an increase in demand. This is often performed by natural gas-fired units. Critics of spinning reserve power’s capital costs need to recognize that every energy source requires backup, just as the natural gas processing plants and transport pipeline systems have backup assets to maintain reliability. Spinning reserve power is needed for intermittent supplies by wind and solar and for excess capacity to adjust for hydroelectric with water irrigation priorities and seasonal variations.
Teton County, Wyoming
An example of BES management can be seen in the electricity supplied to Teton County, Wyoming. The electricity used is 100% from hydroelectric power during the months of May through September. However, the winter flips to 10% hydroelectric and predominant electric supply from coal-fired power. The chart from EIA illustrates the County’s power mix on February 3, 2022 when temperatures dropped to -20 Fahrenheit for several days. Conversations with Lower Valley Energy reveal the immense complexity in BES management that delivers reliable electricity.
A winter storm in February 2021 was devastating for most residents within the Electric Reliability Council of Texas (ERCOT). It triggered large sections of the BES operated by ERCOT to be off-loaded from the electric supply. This resulted in more than $80 billion in asset damages plus 210 lives lost. The investigation by FERC revealed the vast inadequacies of the natural gas systems. The failures included the inability of power plants to function at the low temperatures required by State guidelines, cutting power by ERCOT to critical gas processing systems, and inability of raw natural gas supply systems to function at low temperatures. ERCOT’s advance preparations for the forecasted low temperatures and rain did not include substantial operations by solar and wind power systems. ERCOT did not practice audits of guideline implementation. Refer to the FERC report for more information on the failures (ii). FERC had submitted notices to ERCOT of similar deficiencies since 2011, but adjustments were not implemented.
The future for the BES has many challenges with varying power systems and associated energy storage capabilities. However, the continuing difficulties of installing new transmission lines or pipelines and oppositions to various energy sources will need to be addressed by both federal and state policies. The policies create a lengthy process to plan and install a transmission line across new pathways or for a new pipeline that may carry natural gas, hydrogen, or captured carbon dioxide. The public’s continual “not in my backyard” slows progress, especially for nuclear power as a reliable supply of electricity that many utility companies want to consider (iii) (iv).
Transitioning the power production systems for climate change strategies and meeting the increasing demand for electricity production will result in varying geographical capabilities. Most climate change strategists forecast that intermittent sources of wind and solar will attempt to meet 44% of electricity generation as long as energy storage infrastructure complements these supplies (v). The remaining electricity generation needs to be from dispatchable electricity suppliers. Future power production may still rely partially on natural gas-fired plants for quick response to demand. The success of carbon capture in select geographies or conversion of natural gas to carbon-free fuel may be needed for complete conversion to a carbon-free electric utility.
A robust, dependable, and carbon-conscious energy system is critically needed and the energy transition required to deliver this represents the defining energy challenge of our time.
(ii) https://www.ferc.gov/electric-reliability (ERCOT Failure Report)