Stuck in the Past: Old Models Stymie Clean Energy Transition

With the upcoming COP 24 session in Poland, I recently published a post that looks at the progress that has been made since COP 21. COP 21 is when we saw the drafting of the Paris Agreement. COP 24 is the opportunity to truly put together implementation strategies for countries to meet their greenhouse gas reduction goals. There are several market sectors that are impacted by the Paris Agreement. Here I want to take a quick look at the electric power sector and the slow transition to more clean energy power systems.

What’s the Hold Up?

One uncertainty ahead for renewable energy is how investors will take to the coming period in which project revenues have less government price support, and instead depend on private sector power purchase agreements or merchant power prices.

Why can’t this transition happen more quickly, particularly in regards to electric power generation and consumption. When countries submitted their INDCs in 2015, the energy world was a bit different than today. One of the most significant differences from then to today is the price of clean energy resources, particularly solar, wind and batteries.

With significantly lower costs for clean energy power generation since the Paris Agreement shouldn’t we be seeing a more rapid transition. A key  argument has been that the higher costs of renewable energy was a key barrier. It is very difficult to make the same argument today. As demonstrated by the most recent levelized cost of energy studies.

Economics are there for clean energy

According to the Lazard Levelized cost of energy report, in 2015 combined cycle gas plants and utility solar were pretty much event in cost per kWh. Solar was a bit cheaper at $64 and Gas combined cycle was $65. Wind was less expensive than both at $55. If we look at the most recent Lazard report for 2017, prices have continued to drop for all technologies, but solar and wind by considerably more. In 2017 wind was $15 less than gas at $45 and solar was $10 less than gas at $50. Solar made the largest gains in price reduction per square foot and closed the gap on wind. There is now only a $5 difference between wind and solar applications.

The other argument has been that renewable energy is intermittent and too much renewable energy on the grid would hurt grid reliability. This argument appears to be losing some of its validity. One would expect that with early deployment, there was not the diversity of resources, solar and wind, nor the geographic disbursement of these systems to ensure grid stability. However, as we see greater deployment of solar and wind, we see the complementary nature of these resources and how they are better able to support the overall grid when coupled together. Throw in batteries and you really solve the intermittency issue. Granted, solar and batteries is still a bit more expensive, than your base load combined cycle natural gas plants, but not by much.

Texas Not Showing the Way

A recent decision by the Texas Public Utility Commission (PUCT) on AEPs Wind Catcher facility is a good example of how developers may not be using the appropriate assumptions for their models and how the PUCT is slow to adjusting to the clean energy transition. What this means for both the developers and the regulators is that they have not been able to properly model the long-term benefits of clean energy resources and future risks of a fossil-fuel based power grid.

The AEP’s Wind Catcher would have been a 2 GW wind farm in the Oklahoma Panhandle. The largest wind farm in the United States. AEP argued that customers would receive significant benefit due to the expected fuel savings of the project. Because power would be provided to Texas, the PUCT had a say on whether the project was seen as beneficial to Texas customers. The PUCT denied the project on grounds that it placed too large a burden on rate payers.

What has changed in the market?

The clean energy market is tougher place to be than it was a year ago. Three key factors a lower federal tax rate, low natural gas prices and in Texas the fact that the renewable portfolio standard has long been met and provides no requirement for utilities to take on additional clean energy.

Because the renewable energy standard goals of Texas have been met, AEP had to demonstrate that the costs of the plant were competitive and provided cost savings to customers. Another strike against the project was when first conceived, the federal tax rate was higher. Higher tax rates provides a greater benefit to projects looking to participation in the federal production tax credit. When taxes go down, less tax burden and less benefit via this credit. AEP saw a $245 million decrease in tax benefit with reduction in federal taxes.

Old Way of Thinking Continues

Those are two valid concerns that have a material effect on the value of this project. There are two concerns expressed by the PUCT that are more difficult to accept. The first is that the PUCT does not feel there will be a carbon tax or any other climate regulation supporting clean energy investment in the near to mid-term. However, that is likely to be only as long as the current administration stays in power. Looking beyond 2020, we should anticipate a swing back toward carbon related regulations which would get the US back in line with the rest of the world.

Further, as we continue to see greater climate related extreme weather activity, it is increasingly likely that more interest will be paid in mitigating climate risk through the development of policies for more clean energy resources. This could be done through a “punctuated equilibrium” event such as an extreme long-term drought or the largest fire in California’s history, that would mobilize voters for more climate focused policies. Not only may a large event drive policy change, think Fukishima, but so would current state and local efforts. We are seeing a significant horizontal diffusion across states and communities of climate policies. As this builds, we could very well see a vertical diffusion, a snowball effect that drives action at the federal level. We see from COP 23 that a sizable portion of US cities and states are “still in.” To not take into account, the possibility of future climate regulations is short-sighted energy planning that goes against many of the indicators that would suggest otherwise.

Natural Gas Prices to Remain Flat for 30 years?

The second argument by the PUCT against the Wind Catcher project was that natural gas prices are low and will remain low for the foreseeable future.  With such low natural gas prices, wind is not believed to be competitive and would increase cost burden to customers.

The analysis by the PUCT does not take into account the ongoing decrease in wind energy prices. As mentioned earlier, according the most Lazard report, the LCOE of wind is less than natural gas combined cycle plants. A recent Rocky Mountain Institute (RMI) report finds that an “optimized clean energy portfolio” is cost competitive with natural gas at $5 MMBtu gas now and with $3 MMBtu gas in the next 15 years. The study also looks at a Texas case study.  When comparing a combined cycle plant with a clean energy portfolio which includes energy efficiency, solar, wind, demand response, etc., the clean energy portfolio has a 25% savings over the cap ex of a the combined cycle plant.

The Chairperson of the PUCT, DeAnn Walker, stated that one of the key problems with the project is that “the costs are known…the benefits are based on a lot of assumptions that are questionable.” However, looking at the decision of the PUCT, one should ask the same thing of the PUCT assumptions of low natural gas prices. Natural gas prices are historically volatile. To base the conclusions on the premise that natural gas prices are going to remain stable and flat over the next couple of decades indicates that the PUCT has not learned from history. By assuming that natural gas prices will follow a very stable, minor increase for the next thirty years does not reflect the reality of the last 30 years. This false assumption puts energy consumers at greater risk.

Here is the PUCT’s assumption – natural gas prices is the orange line.

Here is the historic reality of natural gas price volatility.

There were some other strikes against the Wind Catcher project, particularly the additional costs of transmission construction to interconnect the system. Further, AEP should have done a better job on how it presented its analysis and assumptions with the more recent changes in the natural gas market and regulatory environment.

That being said, AEP and other developers should learn from this project. One key area that has yet to be touched to the degree necessary is future climate risk and the increasing likelihood of climate regulations. Energy planning models are not properly taking into account either of these risks. By not doing so, models will not adequately value clean energy projects and limit opportunities for speeding up the energy transition. More to come on energy planning in the next post.

 

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Paris Agreement: The Slow Walk Continues

COP 24 is quickly approaching. This COP will be held in Katowice, Poland. The intent of the 24th Council of Parties is to facilitate and adopt a set of strategies that will lead to the full deployment of the goals expressed during COP 21, i.e. the Paris Agreement. There will also be greater focus at this COP to identify not only mitigation strategies, but also more carbon sequestration strategies via improved land-use practices.

 

A Quick Review of Paris Agreement

In 2015 all of the countries of the world convened at COP 21. The 21st meeting of the UN’s Council of Parties. The goal of COP 21, aka 2015 Paris United Nations Framework Convention on Climate Change  (shortened to the Paris Agreement), was to identify the strategies that would help countries, and the globe at large, to reduce greenhouse gas emissions. The expectation was that by countries cooperating and coordinating on a variety of emission reduction and carbon sequestration efforts, we would decrease the likelihood of the planet warming more than 1.5 degrees. 1.5 degrees being the threshold that was set by climate scientists to be the maximum amount the plant can warm beyond the pre-industrial revolution baseline of the late 19th century. Beyond 1.5 degrees, and it is expected the earth would see some pretty catastrophic impacts. This would largely be an increase in number and intensity of extreme weather events, both short-lived such as hurricanes and of longer duration, such as droughts.

To establish the Paris Agreement, all countries worked to provide Intended Nationally Determined Contributions (INDC) for mitigation. These are largely the sectors countries will focus on to reduce their greenhouse gas emissions. This includes the energy sector; agriculture; land-use; waste; transportation, etc. By April 2016, 97% of all participants, 190 of the 196 possible participants, in the United Nations Framework Climate Change Covenant (UNFCCC) had submitted INDCs. This covered about 94.6% of all carbon emissions.

What has happened since the Paris Agreement?

What happened between COP 21 and COP 24? Some would argue progress was made, but largely not enough progress to adequately address the extreme risk we face with a rapidly changing climate. Some progress is better than no progress. We did see advancements in commitment for financing and funding both mitigation and adaptation activities; greater focus on supporting indigenous populations; and the development of additional coordination mechanisms that facilitate dialogues across countries, as well as between the public and private sector.

There was COP 22 in Morocco. This was largely a follow-up to COP 21 to demonstrate that countries are on board . A joint statement was issued to this effect demonstrating that countries are committed to the goals they established in COP 21. The COP did ask for not only ongoing commitment but also a willingness by countries to increase their financial contributions to this effort, both internally and to countries in need of greater financial support. It also recommended that countries up their goals a bit, as there was a increasing realization that the goals set during COP 21 were not sufficient to meet the 1.5 degree threshold.

There was then COP 23, held in Bonn, Germany and led by the country of Fiji. The focus of COP 23 was to further develop implementation strategies for COP 21 goals, as well as further develop a facilitative dialogue known as the Talanoa Dialogue. The intent of this dialogue is to build trust among participating countries. With greater trust, it is believed there will be improved knowledge sharing, as well as increased likelihood of greenhouse gas reduction strategies being implemented. Some other highlights includes United States’ cities and states recommitting after the US federal government pulled out of the Paris Agreement.  With Fiji taking the lead, there was also significant focus and progress on indigenous populations, particularly those that are most at risk to sea-level rise and other climate risks.

Where do things stand?

We have all of this improved coordination and cooperation happening across countries, as well as with greater public/private partnership efforts. Further, we have greater investment in mitigation and adaptation efforts. However, we still are very much falling short. In October 2017 the UN Environment’s Emissions Gap report was issued. The report was issued prior COP 23 in Bonn. It assesses the INDCs and the progress countries are meeting. The conclusion was not great. The INDCs meet only about 1/3rd of what needs to be done to keep under the 1.5 degree threshold and those pledges that have been made are not all reducing emissions as quickly as anticipated.

As a planet, we are way behind where we need to be to decrease the likelihood of hitting the 1.5 degree threshold. In the next blog post, I discuss the electric power transition and the current barriers that are slowing it down and the ways in which to reduce these barriers.

Rolling Blackouts in Texas? One Easy Cure

Will the lights stay on in Texas this summer? With record energy demand and even higher energy demand this week, there are some doubts. What may be a solution? Greater focus should be placed on energy efficiency to reduce near and long-term risk.

Soaring Demand for Power

The Texas electricity market continues to hit record power demand highs. The most recent record high was 73,259 MW on Thursday. Demand is expected to go as high as 75,596 MW some time in the next few days as record temperatures hit the area. This will be close to 6,000 MW higher than average over the last few years, about an 8% increase from the previous year.

More importantly, this is almost 3,000 MW higher than was anticipated April 2018 when ERCOT made its last summer peak demand prediction for the summer of 2018.  With a generation capacity of 78,000+ MW ERCOT had planned for a reserve capacity of 5,428 MW during the 2018 summer peak. If the new prediction for this week of a peak demand of 75,529 MW happens, that reserve capacity goes down to 2,588 MW.

The Razor’s Edge

2,500 MW of reserve capacity is not a lot to play with when you start looking at the possible generation outage scenarios, such as natural gas plants have mechanical difficulties or the wind slows down in west Texas. ERCOT looked at a bunch of different scenarios to determine the potential risks that could eat into the reserve margin. When the reserve was north of 5,000 MW ERCOT saw that there were three scenarios where the reserve margin would be used. With the new possible reserve margin, all risk scenarios show inadequate capacity.

When there is inadequate capacity, we may begin to see brown outs and rolling black outs. Some of this threat is limited by demand response and load management programs that allows for voluntary reduction of loads by large energy users. This does not provide a lot of comfort because the demand response and emergency response service only gives us about 2,300 MW of spare capacity.

To sum up, Texas is running on a razor thin amount of reserve power this summer and there is not much that can be done in the short term to increase generation capacity. Due to such low electricity prices in Texas there is no appetite to build new merchant generation plants in Texas. Operators cannot make money in the current market due to such low prices throughout the year. Operators only get paid when they run. ERCOT is not a capacity market where generators get paid to have additional capacity onsite and standing by. After this summer, if peak prices get high enough for long enough period of times, and these higher summer prices appear as if they are here to stay, we may see some entering the market. But don’t hold your breath.

What to do? What to do?

There is one relatively easy solution. It doesn’t get the attention of a lot of people because it is not a shiny solar panel or a big turbine. Typically, most people never see it or know it is there. It is energy efficiency. Unfortunately, the state of Texas is a laggard at energy efficiency.

How Texas Compares to Other States in Regards to Energy Efficiency

I am not saying utilities responsible for energy efficiency programs run bad programs. They are very efficient operators of their efficiency programs. They do good work. The problem is that they don’t have to try to hard. The energy efficiency requirements for utilities is very low in Texas. We have the lowest energy efficiency goals by far across the entire United States. These goals are set by the energy efficiency resource standard (EERS). The state of Texas was the first state to adopt an EERS in 1999. We then quickly became laggards and fell of the pace. The image below, although a couple of years old, shows how far Texas lags behind other states in energy efficiency savings goals by utilities.

Everyone in the ERCOT market pays for energy efficiency. You may see it on your bill as the energy efficiency cost recovery factor (EECRF). You may not have noticed it because it is either bundled with other costs on your bill. Even if it was listed it is such an inconsequential piece of your bill you wouldn’t notice it anyway.

Saving Energy is Cheaper than Making Energy

Energy efficiency continues to be on of the cheapest ways to increase the amount of generation capacity in Texas. Solar and wind have come down in price significantly, that is for certain. However, energy efficiency should not be set aside. The United States wastes a lot of energy. If we waste less through energy efficiency programs, we put less stress on the grid and we will not have to be as concerned as to whether we have enough electricity to keep the lights on.

Energy Efficiency Simply Done

It doesn’t take a lot of time and requires minimal disruption to a business or household. It can be as simple as some behavioral change, such as not having every TV on in the house that no one is watching because they are on their IPad or Nintendo Switch.  Other simple things to do would be to buy new high efficiency LED light bulbs ( the light quality is excellent, they last forever and are really not that expensive anymore); adding insulation to your attic and walls; adding weather stripping and caulking to windows and doors; installing ceiling fans and finally, upgrading to a new high efficiency air conditioning system. A lot of options and there are ways to find out what you can do.

A very well kept secret is that utilities provide free residential energy audits. In Texas, call up your utility, not your retail electricity provider (although some are now offering these services) and see who their providers are. We had our house done a few years ago. They came in, did and audit, and on the same day, installed new light builds, added weather stripping, sealed leaks in the A/C duct work and added insulation. You are paying for it with your EECRF so why not take advantage of it. Businesses should do the same thing. There are a large number of energy efficiency programs to take advantage of, but act fast the dollars go very quickly. Which gets me back to one of my pain points, Texas as a state sucks at energy efficiency. Not because of the work of the programs, the utilities do good work, but because of the lack of funding provided to these programs.

Regulators and Legislators Lack Sense of Urgency

Our legislators and regulators have not been convinced that energy efficiency is a priority for the state. The PUCT has actually put a pretty restrictive cap on what utilities can spend on energy efficiency.  If the state, marginally increased its energy efficiency goals under the EERS, and just brought Texas up to the state that is second to last, the amount of dollars would be significantly higher. SPEER, a state-wide energy efficiency organization finds that with modest tweaks to our energy efficiency goals, we should expect about a 10% decrease in energy consumption. That is a significant reduction and impact when we are playing so close to the margins.

There is a pretty clear path to reducing the likelihood of blackouts. The 2019 legislative session is coming up. Let your representative know that you don’t want black outs, you see energy efficiency as a simple fix and you want more funds to support it.

More funds would mean more energy efficiency, which means improved reserve margins which means a much lower likelihood of the lights going out in Texas. Plus your house or business will see lower power costs and probably be a lot more comfortable.

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This is the Truth About Coal

There has been a recent push to revive US coal-fired power plants in the name of electric power resilience and reliability. Why is this a bad idea? It is a bad idea for several reasons. Following is a list of the top 4 reasons why coal is a bad idea

Electricity from Coal Plants is More Expensive

Coal requires all of us to pay more on our energy bills. It’s expensive compared to most other forms of power from renewable energy to natural gas. According to Lazard’s most recent report on the unsubsidized levelized cost of energy, the lowest cost coal plant is $60/MWh this is in comparison to wind at $30/MWh, gas combined cycle at $42/MWh and utility scale solar at $43/MWh. When there is an apples to apples comparison between coal and renewable energy. This means that we are looking at plants that produce the same amount kWh per year, coal is much higher than solar and significantly higher than solar. The facts demonstrate that coal is more expensive than most other viable options. Keep in mind that this is unsubsidized costs, none of the “unfair” investment tax credits or production tax credits are included in this price. Further, this does not include the social and environmental costs that come from coal. That is covered later.

Coal Plants are a Public Health Nuisance

Speaking of social and environmental costs, coal power plants emit mercury and a variety of other greenhouse gas emissions that should be properly accounted for. The key concern here is the amount of mercury emitted by coal plants. which can result in significant health risks. According to a recent EPA analysis, over 42% of mercury emissions in the United States come from coal fired power plants. Overall 50% of mercury emissions comes from fossil fuel plants. This does not include all of the other dioxins and heavy metals that come from primarily coal plants. Below you can see the dispersion of mercury/toxic emitting power plants.

EPA – Toxic Rule Facilities

The problem with mercury is that it significantly increases a community’s health risk. High levels of mercury emitted from power plants can harm brain, heart, kidneys, lungs and immune systems of people of all ages. Further, mercury from power plants has been found to have a significant negative impact on a baby’s development, with particular impacts to a baby’s nervous system.

Coal Plants are not that Resilient

Coal power plants are not as resilient as some would like us to believe. Coal plants and the supply chain that gets coal to the power plants are highly susceptible to cyber, physical and climate risks. A recent study by the National Academies of Science titled Coal: Research and Development to Support National Energy Policy found that ““The rail net­works that transport the nation’s coal—like air traffic control and electric trans­mission networks—have an inherent fragility and instability common to complex networks. Because con­cerns about sabotage and terrorism were largely ignored until recently, existing networks were created with potential choke points [like some rail bridges over major rivers]…that cause vulnerabili­ty…[and] the potential for small-scale issues to become large-scale disruptions.”

Climate Change May Hurt Rail System

The Department of Energy further elaborates on the fragility of coal transport by finding  “Hardly a month goes by that delivery of Powder River Basin (PRB) coal somewhere in the supply chain is not interrupted by a derailment, freezing, flooding, or other natural occurrence.” Climate change is likely to increase heat that buckles rails, floods and storms that undermine tracks, and extreme weather that spikes electric demand. Meanwhile, utilities, having cut coal inventories threefold during 1980–2000 to save cost, keep trying to squeeze out more cost, exacerbating risk.” A recent example of coal not being that fuel secure was the Texas WA Parish plant. During Hurricane Harvey, the plant had to switch from coal to natural gas due to saturated coal piles. Those proponents for coal should also recall the Polar Vortex that resulted in frozen coal piles. You can’t burn frozen coal.

One other thing, coal or any other water-cooled power generation system can’t operate or at least not very efficiently when the water is too warm or there is not enough water to cool the plant. I covered this in a recent blog post on the power sector having a significant water problem.

Climate Change Induced Lack of Water Reduces Power Resilience

Coal Plants are Significant Greenhouse Gas Emitters

Can’t forget this one. Coal power plants emit significant greenhouse gas emissions. In the US, coal accounts for 67% of greenhouse gas emissions in the power sector. Of the total greenhouse gas emissions, 28% comes from electric power generation. Granted, overall GHG emissions have come down due to fuel switching since 1990, but not by much. This largely due to much of the switching is to natural gas, another greenhouse gas contributor, although not as large of one. Also, there have some increases in demand across parts of the country which has limited overall reduction.

Coal Power Plant’s Climate Change Problem

The current administration has not made the connection between greenhouse gas emissions and climate change. By not making this connection, that cannot see that sustaining or increasing emissions will result in a significant increase in storm intensity that will negatively impact the overall power system, i.e. hurt system resilience. Storm intensity, demonstrated by Superstorm Sandy, Hurricane Harvey, Irma and Maria, the Polar Vortex, to name a few, is anticipated to significantly increase under current greenhouse gas projection scenarios. If the concern of the administration is resilience of our power system due to extreme storms, there probably should be some effort to reduce the likelihood of this intensity by reducing the cause.

To Conclude

There are four really good reasons why coal fired power plants may not be the best option for a resilient and reliable grid. This was just a high-level overview. Each of these topics could be their own posts. For the long-term resilience of our electric power system, it is key that we not look to short-term fixes to the detriment of long-term health, economic and environmental well-being.

 

 

How does Texas Measure Climate Risk to Power Grid?

How does Texas Measure Climate Risk to Power Grid? The short answer is that it doesn’t.

I attended the Gulf Coast Power Association (GCPA) Houston monthly luncheon last week. It is always a great opportunity to learn something new about the power sector and talk with a bunch of energy experts. Today, Colin Meehan, Director Regulatory and Public Affairs with First Solar, gave a talk on “Solar Power in Texas.” It was a good presentation and Colin did a nice job explaining how solar is entering and will continue to enter the Texas market at an increasing rate.

There was one specific slide in the presentation that caught my attention. This slide looks at different ERCOT power generation capacity addition scenarios out to around the year 2031. One of the items that jump right off the page is the amount of solar that ERCOT anticipates coming online in each of the scenarios. Currently, solar makes up the second largest percentage of new generation capacity being considered for the Texas market; second behind wind. According to the ERCOT Generator Interconnection Status report, as of March 2018, 23 GW of solar is now in some stage of the interconnection process.

Meehan Solar First Solar

Things are looking good renewables in Texas. But that was not what really got my attention. What grabbed my attention was the Extreme Weather bar in the graph. First, it was good to see that there is some consideration as to how future weather conditions could impact power generation in the state. I was curious to learn more about what the extreme scenario entailed so I checked out the ERCOT Long-term System Assessment. I find that the ERCOT LTSA extreme weather scenario assumes there is a long-term condition that impacts water-intensive generating resources. In a previous post, I discuss how the Texas grid, as well as most of the US grid, is too water dependent.

In this particular LTSA scenario, ERCOT assumes a six-year drought occurs during 2022 and 2027 leading to significant stress to the power system. This includes derating the water-cooled generation systems, as well as the complete outage of these systems. ERCOT uses a drought prediction tool to build this scenario. This tool uses historical water usage data, current reservoir data, and current generator information.

What is missing here is a consideration of future weather patterns due to climate change. I have written on a couple occasions, most recently the article on How Smart Companies are Using Block Chain to Improve Resilience in Wake of Climate Change and The Key Reason the Texas Power Grid is at Risk to Climate Change. Many of our state’s key decision makers are still having difficulty coming to terms with climate change. This is unfortunate and climate risks should not be ignored particularly when long-term decisions are being made for power generation in Texas.

The capability to assess climate risks is available, particularly when considering future water risks due to climate change. The National Climate Assessment does a nice job laying out the risks for Texas and the southeast.  Hopefully, we will see the latest version sooner rather than later, but it appears to be held up.

In any case, new report or not, the data is available for Texas energy planners to start taking account future water conditions for the state. Water is not the only concern, another issue will also include the placement of power generation systems in areas with increasing likelihood of more intense tropical storms and hurricanes.

Increasing storm intensity, including flooding, as well as sustained droughts are two conditions that are discussed a good bit in Texas, depending on the most recent crisis. However, what is less discussed are changes in wind patterns and cloud coverage.

If Texas expects to have wind and solar providing a significant portion of the generation capacity, should we not take into account how future climate change may impact the ability of these resources to perform? The data and models are available to consider changing cloud coverage and wind patterns. I have come across a large number of studies for Europe but only a handful for the US.

With so much at stake, an effort must be made to consider climate risks. As the second largest economy in the US and the 10th largest globally, Texas plays a significant role in driving the global market. How does the state maintain this position or advance, if we can’t keep the lights on?

Critical Action Needed to Make Electric Power Grid more Resilient to Climate Change

With three major hurricanes wreaking havoc on the United States’ power sector in 2017

2560px-Katia,_Irma,_Jose_2017-09-08_1745Z–1935Z
Katia, Irma and Jose…After Harvey and before Irma…                 Hurricane Season 2017

there has been a growing discussion on how to make the grid more resilient. Due to climate change, it is anticipated that storms are likely to become more intense and possibly more frequent, placing growing pressure on the ability of the power system to keep the lights on. We are already finding that climate-induced extreme weather events are already resulting in more frequent and longer duration outage events in the United States.

Defining Resilience 

With this growing threat, a resilient power system sounds like a good thing. Unfortunately, it appears that there is some difficulty in defining what we mean by a resilient power system. From many of my recent conversations, I find there is confusion by what we mean by resilience. For example, I see in some cases, reliability and resilience are used interchangeably. To be clear, reliability is not resilience. According to a recent National Academies of Science Report “Enhancing the Resilience of the Nation’s Electricity Grid,” reliability deals with ensuring there is an adequate amount of power supplied to meet demand, even in times of expected and “reasonably” unexpected outages. Resilience differs in that the expectation is that a resilient system can adapt and lessen the likelihood that an outage will occur and if one does occur to manage the event, lessen impacts, recover as quickly as possible and learn how to deal with future outages.

Valuing Resilience 

IceStormPowerLinesBeyond defining resilience another issue we face is that much of the decision making and cost/benefit calculations are based on economic efficiency calculations that value the benefits of a reliable grid, not a resilient grid.  The focus is on short-term cost-benefit optimization that is detrimental to resilience improvements. In other words, the calculation looks at what keeps the lights on now in our current environment, not what investment would limit the large-area, long-duration outages that may occur due to severe weather activity or other cyber or physical attacks. To overcome this issue requires that there is a better understanding of how to value resilience. To do this requires that we have a better idea as to the probability and intensity of future events that may impact the grid. These known unknowns and unknown unknowns are not easy to value which is problematic when putting together a rate case to fund this investment. Fortunately, steps are being taken to quantify metrics tied to what would be considered a resilient power system. With the development of better metrics to measure performance, it will be more likely we can make more resilient appropriate investments.

Resilient Components – Weighing the Costs

As we get better at improving our ability to define, measure and value a more resilient power system, what would be some strategies that we could pursue? There are a variety of ways to make the transmission and distribution system more robust. All of them may add significant upfront costs to the system but are likely to also provide long-term benefits as the power system is more able to withstand more severe weather events. Following is a very high-level overview of some options that could be considered.

Put the wires underground, sometimes…Undergrounding power lines is an option that I hear a lot. The problem with “undergrounding” is that it is significantly more expensive than hanging the wires on poles. So, we must weigh the cost and benefit of such an approach. In an area that is susceptible to high winds, ice storms and tornadoes, placing the wires underground may be worth the cost. The question we must ask is whether we anticipate there will be an increasing number of these events that would justify burying these cables? At this time, we know that things are going to get a bit hairier, but we are uncertain as to how hairy and when. That makes it difficult to pull the trigger.

Also, we must remember that an approach that would make a power system more resilient in one location may not be as successful in other. For example, if an area is susceptible to flooding, burying wires may be a bit more problematic. Although protections can be put in place to protect against flooding of underground lines, that adds additional cost and it may still not prevent a disruption. Further, any disruption, due to damage to an underground cable, will likely take longer to fix and be more costly than repairing above-ground wires. We must ask are we preparing for floods, high winds or both?

Elevate substations…Not only are the wires susceptible to water, substations can be, as Underwater_substation,_Cedar_Rapids,_June_12_2008well. This was demonstrated by Hurricane Harvey flooding which ruined multiple substations. This damage can be limited by elevating the platform for where these components sit. Levees and dikes can also be built to protect these systems. This is easier done for new infrastructure development, however moving or elevating legacy systems can be cost prohibitive if the proper valuation of this benefit is not properly accounted for.

Strengthen wires and poles...Additionally, for the transmission system, there are methods that can make it more robust, particularly to ice storms and strong wind events. This would include reinforcing poles and towers or constructing wind-resistant concrete and/or steel poles. There could also be more frequent deadends placed along the system. At present, the practice is to place a dead end every ten miles. Placing these deadends more closely together will reduce the likelihood of a domino effect if one of the standard designed poles are compromised.

A smarter gridFor distribution systems, improving resilience requires moving from a radial design to a more networked design. A networked design has more than one supply feed that limits outages if one of the lines go down. The network designs should be coupled with more advanced communication infrastructure that allows systems damage to be isolated and to reroute power when a component is damaged. These smarter grid systems have been deployed in a patchwork across the United States. CenterPoint, in the Houston-Galveston region, does have some smart grid components deployed which allowed for more rapid recovery during Hurricane Harvey.

Final Thoughts

The bottom line is that solutions exist. I presented a short list of options that may be considered. I didn’t even touch on the fast-approaching opportunities that come with decreasing cost of battery storage. The problem with pursuing many of these strategies is the added expense. Our decision-making frameworks for utility investment are not set-up for resilience investment, they are set up to ensure a reliable grid. Fortunately, with better climate modeling and resilience metrics, we are getting closer to properly valuing the short and long-term benefits of the resilient investment and are moving in the right direction. In the meantime, we will just keep trimming the trees.

 

 

 

“All the Above” Climate Adaptation

For long-term resilience to climate change, flooding is not the only issue we must deal with at this time. In light of the current situation, it is easy to place all of our efforts on reducing flooding risk. We have a tendency to focus on the most recent event and ignore extreme heatother threats to our well-being. It is human nature to do so. However, taking a narrow view on one particular issue could be detrimental to the Gulf Coast’s long-term well-being.

Granted with Hurricane Harvey, the Ike Dike and Coastal Spine have garnered a significant amount of attention. This is interesting due to the fact that Hurricane Harvey’s flooding would in no way be mitigated by this infrastructure. In any case, it is good to see flooding not being the only issue discussed.

As important as it is to work on our flooding and storm surge issues, three floods in three years and storm surge with Hurricane Ike, we must also keep in mind that Texas is one long-drought punctuated by torrential rainfall. It was only five years ago that the entire state experienced a significant drought that resulted in considerable damage to our road infrastructure, water distribution systems, power generation, livestock and agriculture and our St. Augustine (The last is a joke. We really should get rid of this stuff, it is a huge waste of water.) In any case, droughts are a real issue that we cannot ignore.

Drought

I have mentioned the drought experience and future risk for our power grid in previous posts. The first one looking at our current predicament and the second considering what our future grid faces.  I have not covered the variety of other drought-related issues that we have recently faced and may face in the near term. During the 2011-2012 drought our drought texashorizontal infrastructure, pipes and street, faced considerable issues, particularly our water system in Houston. At one point, during the drought over 700 pipes per day were breaking. It is estimated that 15%, 22.4 billion gallons of water, was leaked and never made it to the end-user.

The drought also caused an estimated $7.6 billion loss to the farm-sector.  The hardest hit being the livestock industry and hay production. Closer to the Gulf Coast, we see that the drought greatly damaged the rice industry and placed its future in question. As we move along the Gulf Coast, we see that the drought also had a significant impact on the Gulf ecosystem with elevated salinity levels. This damages oyster beds and fisheries that are dependent on freshwater inflows from the Colorado and Brazos River.

Extreme Heat

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Also, as many are aware, it gets hot in Houston, and it is expected to get considerably hotter. Between 1981 and 2010, the Houston region averaged 31 days over 95 degrees. If climate models are correct, it is anticipated that the number of days will triple to close to 90 days per year at or above 95 degrees. These temperatures are already having an impact on the region. For example, the City of Houston has put in place an extreme heat emergency plan and had to put it in action the Summer of 2016. This heat not only melts and warp infrastructure, it is a significant public health issue for those who work outside, as well as those vulnerable populations that do not have access to appropriate air conditioning.

The heat is anticipated to have a significant economic impact on the Gulf Coast. A recent Science article looked at the economic consequences of climate change in the United States. The study finds that there is likely to be a significant transfer shift of wealth from southern states up to northern and western states. It looks like there will be a point when it will get too hot in the kitchen and people will get out…

Public Health – Vector-Borne Diseases 

The factors mentioned above will have public health implications, whether it is contaminated flood water or extreme heat and humidity. Other public health issues we anticipate with a warming climate, is the increasing number of vector-borne diseases (VBD). This is largely the spread of disease to humans through ticks, mosquitoes, and flies. West nileWe have been dealing with West Nile virus for a few years and recently have started to see Zika get a foothold in the region, the most recent south of Houston in Hidalgo County. Ticks have been a nuisance for years, particularly the ones carrying, Lyme disease. 

It is anticipated that we should expect a greater number of disease transmission with increasing rainfall and humidity, rising temperatures and human migration. Rainfall, humidity, and temperatures provide ideal breeding grounds (except it can get too hot for mosquitoes) and migration allows for the introduction of creatures that otherwise may have a more difficult time making it to the Gulf Coast. Limiting these impacts will require that we set up robust sentinel and surveillance programs to identify the arrival and movement of these diseases around the Gulf Coast. This should be coupled with prevention methods that reduce standing water, as well as public health education programs.

All the Above Resilience 

As we move forward with improving our economic resilience, we must keep in mind two things. First, community resilience and adaptation is a regional issue. Taking action as an individual community or county and not coordinating with others in our region may likely be a waste of money and time. Second, we need to approach resilience holistically and not solely focus on one issue. It is easy to focus on just flooding at this time, but we should not forget that just a few years ago the entire region was dealing with a historic drought, is now regularly facing extreme heat days and seeing an increasing number of VBDs entering the region. So, as we move forward, we need to work together and take an all the above approach.