Blizzard Blackout - How Energy Market Maven Meredith Angwin Predicted the 2021 Texas Blackouts
It started at 2am on February 15th, 2021. Tam woke up to find his power out in his apartment. A brutal winter storm had blown through Texas and now he was without power and his apartment was dropping in temperature. By 6am the temperature dropped so much, he had to put on a winter jacket to go back to sleep. When he decided to venture outside he saw his neighbors building snowmen, a rare sight in Texas. Tam, though, did not enjoy the winter wonderland. His power was still out. His wifi was out. His cell service was too slow to be usable. He couldn’t cook food on his electric stove. His neighbors quickly lost the charm too. They cut down a tree by his apartment to cook dinner. Tam was without power until Wednesday the 17th, and didn’t have stable power until Friday the 19th. Through this period, he rationed food, scavenged for wood to cook and generate heat, narrowly avoided looting at a closed grocery store, and attempted to sleep through 10F nights - and keep in mind this is Texas in 2021, not Antartica. Millions of other Texans endured this storm, which killed 246, and it remains a modern sobering reminder of what happens when power goes out for days.
Read Tam’s full article here on Medium. He is a power engineer and offers excellent insight into the blackout and first hand account of the storm.
Many of us in North America and Europe are used to short periods without power, usually a few hours during a bad storm or heat wave. We accept these interruptions as a minor nuisance that we expect the power company to quickly fix. We are not used to living for multiple days without power like Tam in Texas. In the prophetic 2020 book Shorting the Grid: The Hidden Fragility of our Electric Grid, Meredith Angwin describes how misguided incentives and bad policies have rendered much of the U.S. grid fragile and susceptible to widespread blackouts like those experienced in Texas. This book calls upon Meredith’s decades of experience working in the commercial power industry to decipher the tangle of rules, regulations, and right of ways that define the electric grid in the US and how they hurt, not help the ratepayers (you and me). These misinformed policies expose the grid to what Meredith calls the ‘Fatal Trifecta:’
1) Large amount of electricity production from intermittent renewables
2) Backing up renewables with natural gas which can’t be economically stored on site and has other other competing uses like home heating demand
3) Dependence on importing electricity from other grids to make up for local deficiencies
Meredith embraces the difficulty and complexity of describing the U.S. grid and gives the reader the clearest roadmap to understanding how and why the grid works the way it does. Her main takeaway is that in many of the policies used to govern the “deregulated” regional transmission organizations (RTOs) and independent system operators (ISOs) with guidance from the Federal Energy Regulatory Commission (FERC) create more problems than they solve. In short, FERC defines the federal laws and regulations governing how RTOs can manage, but not operate, the electricity markets for each region they control. RTOs do not produce or deliver electricity to the end users (rate payers), rather they oversee the market auctions between electricity selling power plants and the electricity buying distribution utilities delivering electricity to your home. Because neither FERC nor the RTOs have the direct authority to control how electricity is produced on the grid, legal responsibility for the reliable performance of the grid has become diffuse and problematic for the government and the rate payer.
That is why I have named this book Shorting the Grid. Our current policies are short-circuiting what should be a reliable grid, which is steadily becoming more dependent on a single fuel [natural gas], which is delivered “just in time” to be used. - Meredith Angwin, Shorting the Grid
The book's story explores issues experienced by the grid controller (the RTO ISO-NE) of her home state of Vermont during the 2017-2018 winter. The “fuel neutral” policies required by FERC and implemented by ISO-NE have caused serious reliability problems for New England. Cheap and abundant natural gas makes up a significant portion of the electricity generation and home heating in New England. Natural gas can’t be economically stored on site at the power plants and home heating gets first priority for gas delivery. When there isn’t enough gas coming through the pipelines, electricity gets turned off - blackouts. To avoid this issue in New England, power plants were paid by ISO-NE to buy fuel oil they could store on site and burn as backup when gas supply ran low. This solution was implemented through the ISO-NE’s “Winter Reliability Program” but there was a catch. When the program was instituted for the winter of 2017-2018, it was found to be in direct violation of the FERC rules regarding RTO market activities:
… the Federal Energy Regulatory Commission does not like the New England Winter Reliability Program because it does not like grid operators [RTOs] to pay directly for one type of fuel [RTOs cannot pay power plants to use a specific fuel - in this case oil]. Next year, there will be no such program. - Meredith Angwin, Shorting the Grid
Confusing entangled policies from multiple levels of governing bodies at the local, state, regional, and federal levels make planning and operating a reliable grid difficult and unpredictable. These problems are found in grids all over the U.S. utilizing the deregulated RTO model, including the grid covering most of Texas managed by the Energy Reliability Council of Texas (ERCOT).
I would summarize their statements in this way: when the policies get too complicated, the results of such policies become hard to predict, even by the people who wrote the policies. - Meredith Angwin, Shorting the Grid
Similar problems were found with ERCOTs handling of the winter blackouts in 2021. In Shorting the Grid, Meredith makes a statement with hints of prophecy.
As I write this, ERCOT is facing very low reserve margins this summer [2019]. (Reserve margins are the number of MW [power] available above the number of MW expected to be required, in other words, MW “in reserve”). Low reserves will lead to higher prices for electricity and may lead to not having enough capacity to meet demand. - Meredith Angwin, Shorting the Grid
But why are the reserves low? Meredith went on the Power Hungry podcast, hosted by energy analyst and Austin Texas resident Robert Bryce, to discuss the Texas winter blackout on Feb 17th, 2021.
… And the idea is that at peak demand, some portion of power plants won’t be available because no power plant is available all the time. But with a 15% reserve margin, you’re probably going to be okay. Texas has always had the lowest reserve margin in the continental United States as far as it’s been like 8%. - Meredith Angwin at 1:45
Knowing the audience wants to know why margins were so low, she follows up with the following:
One question is why are margins low? And the answer is you got to look at economic incentives. If you don’t have a promise that you’ll be paid for building a new plant, maybe you won’t build it. Because after all, how many hours will it be on the grid? - Meredith Angwin at 2:50
Meredith goes on to explain her idea of the “Fatal Trifecta” of grid mismanagement and how it contributed to the Texas blackouts. With renewables out of commission in the bad weather coupled with peak natural gas demand and ERCOT’s separation from surrounding grids (making importing electricity difficult), a blackout was inevitable as the Fatal Trifecta predicted.
Shorting the Grid makes it clear what will happen more and more in the U.S. if policies around electric grid governance stay the same. Blackouts like those seen in Texas will spread to other parts of the country where RTOs manage the grid implementing the same principles and regulations laid out by FERC. California experienced similar issues in the summer of 2022 where there was insufficient electricity reserve during a prolonged heat wave. As winter approaches in 2022, her unaddressed concerns become all too relevant as natural gas prices increase, leaving New England at the mercy of natural gas supplies yet again. From her latest article, the FERC commissioner’s plan for ensuring adequate natural gas supplies is:
“We’re going into this winter basically crossing our fingers and hoping,” FERC Commission James Danly said. - Meredith Angwin, A Blizzard of LNG (9/2022)
Hopefully New England has a mild winter and keeps the power on. In the long term, it’s important that we advocate for and support policies that prevent the Fatal Trifecta from being implemented on grids around the country - or else you too could find yourself freezing during the winter without power or heat like Tam in Texas.
In the podcast, Meredith sums up her views on grid policy succinctly:
The story is, in my opinion, basically, grid mismanagement. And I hate to say that because it isn’t that the managers of the grid are just screwing up right and left, it’s just the rules [defined by FERC and implemented through RTOs] that set up the grid do not care about reliability, …they don’t have anything set up so that you could be reliable. - Meredith Angwin 0:56