(John Kemp is a Reuters market analyst. The views expressed are his own)
By John Kemp
LONDON, Jan 7 (Reuters) - Texas struggled to keep the heating working on Monday as unusually cold weather combined with unexpected power plant outages to reduce reserve margins to critically low levels.
The Electric Reliability Council of Texas (ERCOT) declared a Level 2 Energy Emergency and appealed to customers to conserve power by turning down thermostats, as the amount of spare generating capacity available to meet demand shrank to less than 2,000 megawatts (MW) (2 percent).
Level 2 is the second-highest emergency rating on the network. If reserve margins had continued to fall, the grid operator would have been forced to declare a Level 3 Emergency and instruct local utilities to commence shedding load, cutting power to neighbourhoods for 10 to 45 minutes at a time. (http://link.reuters.com/saz75v)
Demand peaked at just under 55,500 megawatts between 0700 and 0800 Central Standard Time, with less than 57,000 MW of generation capacity available.
ERCOT responded by bringing on all available generation and deploying all available demand response programmes, according to the operator, as well as urging customers not to use washing machines and electric ovens and importing the maximum amount of power from neighbouring regions.
But the failure of just one more generating unit would have pushed ERCOT into Level 3 and triggered the disconnection process, according to officials.
The grid is already struggling and needs to build in more flexibility to cope with an expected rise in renewable power generation, which would otherwise lead to more blackouts in future.
COLD WEATHER, AGAIN
Consumption was not exceptionally high. In August 2013, demand in the parts of the state for which ERCOT is responsible peaked at over 67,500 MW in the summer air-conditioning season.
But more than 10,000 MW of generating capacity was offline on Monday for seasonal maintenance. Cold weather caused several more generating units, including two large ones, to fail at the weekend, cutting available capacity by a further 1,800 MW. In total, 3,700 MW of capacity was unavailable as a result of short-term factors.
Unusually cold weather, high heating demand, seasonal maintenance and unexpected power plant outages all combined to push the grid close to failure.
ERCOT has experienced similar problems before, as my colleagues Scott DiSavino and Eileen O'Grady have explained .
In February 2011, plunging temperatures and strong winds pushed up demand for heating while also knocking out a string of generators, forcing the transmission operator to order rolling blackouts for several hours.
Repeated problems on the Texas grid illustrate some of the big challenges facing the electricity industry as it struggles to update aging transmission systems and integrate a bigger share of renewables such as wind and solar power while keeping the lights on and bills down.
ERCOT UNDER PRESSURE
This being Texas, ERCOT is relatively isolated from other U.S. transmission networks, with very limited links to the Eastern Interconnection, which serves the rest of the eastern United States.
Isolation means ERCOT is protected from cascading power failures starting in other areas of the country. But it also means Texas customers are more vulnerable to problems originating in their own grid and are less able to rely on power from other states in an emergency, such as happened on Monday.
Reliability experts have questioned whether ERCOT is maintaining sufficient reserve capacity. In January 2013, the North American Electric Reliability Corporation (NERC), which helps regulate the electric industry, wrote an unusually blunt letter to Texas grid officials.
In it, NERC President Gerry Cauley warned: "ERCOT will need more resources as early as summer 2013 in order to maintain a sufficient reserve margin.
"Capacity resources in ERCOT have drifted to a level below the planning reserve margin and are projected to further diminish through the 10-year period covered in (this) assessment," Cauley wrote.
"It is clear to me that these levels imply higher reliability risks," he added, noting "these concerns are not new as NERC has raised this issue in prior assessments".
NERC cannot order the construction of new generation or transmission facilities, but it was acutely concerned about the current and future situation in Texas:
"While some enhancements have already been made ... solutions have not yet sufficiently materialized to address NERC's reserve margin concern. Further, it is still unclear to us how ERCOT intends to mitigate issues that may arise on the current trajectory and when new resources may be available to meet growing demand."
FORECASTS GO WRONG
Many of the problems spotlighted by NERC concern the ability of the network to meet long-term summer demand, when hot weather leads to peaks in consumption.
But ERCOT and state regulator the Texas Reliability Entity are struggling with short-term winter capacity planning too.
In NERC's 2013/14 Winter Reliability Assessment, published as recently as Dec. 9, ERCOT predicted demand would peak this winter at 47,632 MW, which proved to be almost 8,000 MW short of demand on Monday.
ERCOT actually cut its forecast compared with previous years owing to "more mild forecasted weather, resulting from a change in the representative weather year selected for input into ERCOT's load forecasting model", according to the reliability report.
ERCOT anticipated it would have 73,600 MW of capacity available, implying a reserve margin of over 60 percent, well above its target reserve margin of 13.75 percent.
"In ERCOT's winter reliability assessment, a combined extreme weather and forced outage scenario was developed in which loads increase by 13,776 MW above the forecasted 2013-2014 winter peak, while forced outages increase by 4,326 MW. Under this scenario, the anticipated reserve margin drops to 16.1 percent (9,592 MW), still above the target reserve margin."
The casual reader would assume there was almost no scenario in which power supplies could be endangered. The reality proved otherwise - for the second time in less than five years.
COMMON MODE FAILURES
Near-blackouts in Texas on Monday were not caused by any one major problem but by a host of much smaller issues interacting with each other. None was critical in itself, but combined they pushed the grid close to failure.
Interactions between several small problems to produce a much bigger one are a common and almost inherent feature in complex systems such as power networks.
When something goes wrong, everything goes wrong, as Charles Perrow explained in his landmark book "Normal accidents: living with high-risk technologies" (1984). Amory and L Hunter Lovins made similar observations in their book on "Brittle power: energy strategy for national security" (1982).
In the Texas case, cold weather increased the stress on the network in two ways simultaneously - boosting demand and causing power stations to fail.
The unusually frigid temperatures also were so much worse than forecast that far too much generating capacity was caught offline for seasonal maintenance, and ERCOT found its reserve margin was much smaller than anticipated.
One moderate problem (unusually cold weather) caused multiple failures, which caused the reliability of the system to deteriorate not just by a small amount but by a lot.
RELIABLE, GREEN, AFFORDABLE
Consumers, regulators and politicians increasingly want the power supply to be reliable, clean but also comparatively cheap.
Pressure to keep down costs has led to long-term underinvestment in the transmission network, and in some parts of the United States in generation.
At the same time, politicians are pushing for a much larger share of power generation to come from clean renewable sources such as wind and solar, which do not contribute to greenhouse emissions but behave much less predictably and have very different characteristics in terms of maintaining system generation, frequency and voltage.
On Monday, Texas came close to blackouts, but the lights ultimately stayed on. Transmission operators skilfully exploited every source of flexibility in the system to keep customers connected.
Flexibility is crucial because it helps the grid deal with unexpected contingencies. Wind and solar are much less flexible than coal and gas. Incorporating more renewables will, therefore, make the grid less flexible and more vulnerable unless specific measures are taken to design in more flexibility in other ways.
The need to build in more flexibility to deal with emergency situations explains why policymakers are so keen on smart metering and demand-response programmes. NERC has studied how transmission operators in California are dealing with the impact of integrating more renewables on system reliability.
It is far from clear Texas would have kept the lights on if it had been more dependent on renewables.
Proponents of renewable energy often imply that it is simply a matter of closing dirty coal-fired plants and building clean wind and solar farms. But integrating more renewables onto the network nationwide while maintaining and improving system reliability will be expensive and require substantial enhancements in both technology and operating practices. (editing by Jane Baird)