While summer is around the corner, lawmakers, regulators, power generators, and the public are still analyzing winter reliability challenges faced by America’s power system. Over the past several days, Senate and Congressional members voiced concern and posed questions to the Federal Energy Regulatory Commission about grid reliability following this winter’s extreme weather events. Other interested parties have used the event to criticize electric competition or the reliability of natural gas power generation as compared to other resources. But what actually happened, how did generators and competitive power markets perform, and what steps can be taken to avoid future extreme weather strain? Let’s look back.
Winter Storm Elliott barreled across the United States and parts of Canada just as Americans initiated their Christmas holiday. The historic storm’s rapid temperature drop well below freezing, wind gusts as high as 155 mph and snowfall left travelers stranded at airports or barricading inside with massive strains on power grids across the country, most predominantly in the Eastern U.S. Despite these challenges, the lights stayed on in the Eastern competitive power markets.
Missed demand forecasts, issues with gas-electric coordination, issues related to grid operator emergency actions and processes, including generation dispatch and the extended holiday weekend played a large role in some fully functional and otherwise ready plants being unable to purchase gas when they needed it to run. Infrastructure freeze offs at the supply point impacted the amount of available production, but many issues, which need to be addressed before the next storm, helped that problem at the well-head snowball into a larger issue.
During the height of the storm, more than 40 gigawatts (GW) of largely natural gas-fired generation were unable to come online when requested in after-hours dispatch by the regional transmission organization, PJM Interconnection. Following the storm, PJM fined grid operators for the loss of generation, with fines totaling an unprecedented $1.8 billion. While some critics and PJM itself have been quick to blame gas generation, especially “peaker” plants that are designed to provide energy only when demand is highest, there is a complex constellation of factors at play that demonstrate the responsibility is shared. EPSA and our member companies are committed to securing reliable access to power for Americans and finding solutions that enhance reliability in all circumstances and regions of the country.
Competitive power markets kept the lights on.
But first it’s important to remember that in this case, the competitive power markets run by PJM delivered, while non-market regions with vertically integrated systems faltered. PJM did not suffer rolling blackouts or any other significant loss of supply. Reserve margins were enough to compensate for the lost power and the grid continued to send vital power supplies to neighboring regions that faced shortages and did suffer serious outages. Even with some plants down, dispatchable resources like gas, nuclear and coal played a vital role in supplying power even at the storm’s worst.
Nonetheless, the issues that many plants in PJM faced with insufficient gas supplies should be a warning for the future.
Caption: PJM chart depicts causes of forced outages during Winter Storm Elliot, including emissions, start failures, fuel supply, and plant equipment. Source: PJM Interconnection presentation on Winter Storm Elliott Generator Performance, February 2023.
Planning for storms is essential
So called “once-in-a-lifetime storms” aren’t uncommon anymore, and with mounting peak electricity consumption driven by electrification, proper planning is more important than ever before. PJM admitted to underestimating demand by at least 10,000 MW, enough to power 10 million homes. That impacted fuel procurement decisions during Elliott, by companies that were told they weren’t needed and did not procure gas in advance through day-ahead contracts when it turns out they were in fact needed.
Coordination between the gas and power industries is more important than ever as local opposition groups and state policies are making it increasingly difficult to build gas pipelines in many regions including the East Coast, despite evidence of those pipelines being desperately needed. That puts significant additional pressure on existing pipelines and gives power generators little flexibility when it comes to finding fuel supplies.
Balancing the power grid is a complex undertaking, as grid operators work to predict demand and match supply needs in real time. As planning for future storms becomes increasingly critical, regional operators and suppliers will need to be increasingly conservative in operations by strengthening their portfolio of always-available resources and their reserve margins as storms continue to intensify.
Less than a month after Elliott, Winter Storm Mara proved that this can and should be done. PJM was more conservative in its forecasts and ensured that it had sufficient personnel on hand to effectively coordinate operations—preventing any issues.
Caption: Snow covers downtown Buffalo, New York during Winter Storm Elliott on Monday, Dec. 26, 2022. Credit: Twitter page of New York Gov. Kathy Hochul via AP
Investing in a reliable future
PJM recently testified that fossil fuel power plant retirements are outpacing planned replacements, triggering future energy reliability issues. The North American Electric Reliability Corporation (NERC) has also testified on the same issue and offered increasingly dire warnings about power supplies and reliability. With winter storms and heatwaves becoming commonplace, we must ensure that we invest in the dispatchable resources we can rely on. Natural gas has proven to be a key tool in that toolbox—abundant, secure, affordable, and reliable.
Turning away from dispatchable fuels, like natural gas and nuclear, will only lead to disastrous outcomes. NERC President and CEO Jim Robb underscored the critical role fossil fuels play for the power grid last month, stating, “there is an existing gap that energy storage cannot fill right now and will not be able to for some time…[natural] gas is paramount to filling this gap for the time being.”
Investments in critical fuel infrastructure will also be essential. Natural gas infrastructure must be recognized as an essential element of the electricity production supply chain. Ensuring adequate supply and coordination of delivery, especially in extreme weather situations, will be critical to maintaining electric grid reliability.
Pointing fingers at competitive power markets or specific fuel types as the root cause is a distraction that wastes the opportunity to find real solutions for all regions of the country moving forward. EPSA and our member companies are committed to reliability. Here are three actions that can make a real difference.
Actions to fortify our energy infrastructure
- Permitting: Streamline permitting and create predictable timelines to provide confidence for investors and increase the amount of new infrastructure being built.
- Weatherization: Invest and prioritize in weatherization of all critical energy infrastructure.
- Improvements in energy system coordination: Explore ways to reform the current gas transportation system to prioritize consistent fuel supplies for key generators and emphasize better coordination.