In the latest installment of our occasional conversations with Tarrant County newsmakers, the University of Texas at Arlington’s Wei-Jen Lee talks about the factors that have been causing the Electric Reliability Council of Texas (ERCOT) to issue warnings about conserving energy during the current heat wave.
Lee, an electrical engineering professor and director of the Energy Systems Research Center at the school, is an expert in the energy sector and has a deep knowledge of Texas’ energy grid.
This conversation has been edited for length and clarity. For the unabridged version, please listen to the audio file attached to this article.
Bob Francis: Tell us a little bit about what you research and what you do at University of Texas in Arlington.
Wei-Jen Lee: I am a professor of electrical engineering and director of the Energy Systems Research Center. My research area is the power and energy side.
Francis: How big a group is that at UTA?
Lee: We have five faculty in the power and energy area, and we are recruiting an additional member and he’s going to join us in September.
Francis: As I’m sure you know, the grid’s the reason I’m calling. And Texas seems to find itself in this position, in the cold and in the heat. I wonder if you might explain what’s going on currently with the grid?
Lee: As you know, Texas is, we call it the deregulated market.
Francis: Right.
Lee: And ERCOT by itself manages the system. They try to maintain the system reliability and then also facilitate the market operation. And so from the generation point of view, you rely on the market participant to build a power plant in Texas. So we call that one IPP or independent power producer. And so since this is basically, it’s a supply and demand issue. So when they come in to build a power plant in Texas, they expect to make some money out of it.
Francis: Right.
Lee: So this is for business. So that basically in the power system, you have to control, or you have to balance between generation and load second by second. Because you try to maintain the system frequency and the voltage within a very narrow range. So when there’s a surplus, if you go to the ERCOT side, when there’s a surplus, then the price of electricity can go negative. So in other words, you use the electricity, then they have to pay you.
Francis: Right.
Lee: Of course it doesn’t make any business sense for the people to invest in this kind of environment if it happens too often. Then, if you have a lot more supply than demand, then the price of electricity will go down. So when they consider building up the system, they always consider what will be my comfortable reserve. When they generate electricity and some equipment fails or something breaks, then you have to shut down the unit. You take out the unit from the grid. So you lost that part of the generation capacity. And you always, from the operations system operation point of view, we call that one is a minus one, it’s a single incident.
And you design a system, a single instance should not impact any customer. Right? So that’s the reason why ERCOT basically designed it. They say, “OK, if the reserve is less than 2,300 megawatt, then they’re going to issue a warning.” OK? And then the reason why they set up a ,2300 megawatt reserve is because, well, in Texas we have a nuclear power plant. It’s at 1,250 megawatts, or maybe a little bit more. So if the nuclear power plant goes offline, then they have enough buffer to cover the gap. So nobody will get impacted. However, on their design, they try to make sure if their second unit comes in, say, “OK, well, call a power plant or gas fire unit? Then it’s about 1,000 megawatt. So, that comes up with the 2,300 megawatt over there. So on that way they designed the system, to make sure that hopefully no incident will happen. And then the system will be able to ride through.
For the winter time, nowadays they try to change the schedule. You try to maintain your unit because just like your car, you have to do regular maintenance.
Francis: Right.
Lee: So they have to bring down the unit to do the maintenance. And then normally we call it in the shorter season. You basically try to bring it down when the load is not that heavy, which is in the fall season or in the spring. And this year, well, we have an early summer. So a lot of units when you open it, when you try to do the maintenance, well just like when you go to the garage, when you open the engine hood, sometimes you see something extra that you have to do. And that may cause some delay on the maintenance to bring it back online. So that when our summer is kind of earlier than before, some of the units may not be ready to get online. And that may create a shortage in the system.
Francis: Right.
Lee: And then we all like renewable energy. And Texas, if you look at it, we have almost 30 gigawatt of renewable energy. Which is almost one third of the total available capacity. But did you look at it? Tuesday, ERCOT is forecasting that renewable energy will only come up with about 2,600 megawatt. So it’s less than 10%. And yes, it’s hot and the wind doesn’t blow, so you don’t have power output.
Francis: So many are saying that ERCOT should have foreseen this happening.
Lee: And everyone comes in with, “Well, what is your solution?” If you try to say, we have a lot of renewable energy because we worry about the climate change and then when the wind doesn’t blow then, you don’t have electricity when wind blows very strong, then the price of the electricity goes down to the negative. So then you have to change the design on the infrastructure. So for example people talk about battery storage. People talk about hydrogen. But this all requires investment.
So how can we encourage investment on this development? This is what we have to do. And of course in that way, people worry about the price increase. So basically,when you try to look at the whole system point of view, we really have to design the system that can meet the future needs. For example, people are talking about 2050, you need the net zero carbon emission. Is that right?
Francis: Right.
Lee: A couple of days ago in Europe, they claimed that natural gas and nuclear energy are clean energy. But it’s basically, OK, well, theoretically you can say that. But for natural gas, it’s stage four. It has carbon in it. So when you burn it, you are going to produce CO2. The law can change it, but you cannot change nature or you cannot change the fact.
Francis: Right. You can’t change the laws of physics via legislation.
Lee: You cannot do that. So yes, we have to look at it and we have to sit down, think about it. What are we going to do for the next 30 years or 28 years? When we say, “OK we are going to get the net zero carbon emission.” Where should we go?
Francis: After the winter storm of 2021, the Legislature made some changes to try to keep the grid from failing again.
Lee: Every design has a limit. We try to improve the resilience of the system. However, we also have to admit that everything has a limit. Say you are stronger than I am. You can carry 50 kilogram. But if people ask you, if 50 kilogram is your upper limit, then people ask you to carry 60. Then you won’t be able to do that. So this is basically the situation. If you have so much generation capacity and the temperature goes up, everybody is going to turn on the air conditioner.
Then the grid does not have the resources to support everybody. And so in order to maintain the system reliability, they don’t have any other choice. They can do the demand response. So ask a large customer because they will have a financial incentive to work with ERCOT and then cut down their consumption. Because from the demand resource program, they will get paid. And for the general public, since you and I like a residential load, our electrical bill or the kilowatt hour charge is basically fixed. So it doesn’t give us the incentive, right? So that’s the reason why ERCOT has to get everybody’s help. Because they don’t have any enforcement power to do this.
Francis: At the same time, Texas is one of the fastest-growing states in terms of population. So we’re adding more people to the grid every day.
Lee: Texas, as you know, Texas is also like an independent system. We have a very limited connection with outside Texas. So it’s self-sufficient.
Francis: What do you think is the answer here? Do we need to change the way our system is set up? Or are there technological issues?
Lee: Yes, we have to change the infrastructure. And then probably we have to think about how to utilize renewable energy in a more efficient way. And then the third one… The second one is basically, OK, well, are we ready for it? This is always my question. Because last year, February. And then there’s a famous case, the company that basically changed customers’ real-time price.
So when the system is under stress, then the price of electricity goes up, then customers will pay more. So with that, then if the information is transparent, customers get the information, then they will respond. If the typical price of the electricity is 5 cents per kilowatt hour. And in February 2021, the price went up to $9 per kilowatt hour. So if the customer knows this, then they will turn off their unnecessary load and then help the system.
However, maybe the information was not up to date. So the customer did not know that or whatever the reason then at that time, the customer suffered a large bill during that month. And then that creates a lot of complaints. From the research point of view, that is the right approach, because you expose the fluctuation of the price. And then you decide whether you want to use it or not. Just like, if the price is high, when you buy, good. If the price is high, you don’t have to buy it. Or you have an alternative way to do it. So, yes, from the free market point of view, that should be the approach. But the general public is not ready for that.
Francis: There are some technologies that could help alleviate that. Like I mentioned, storage technologies.
Lee: The storage technology, or like Senate Bill 1125, that tries to enable the aggregator. Because in the ERCOT system, when they implement the demand response program, they focus on the large customer. Because for the large customer, they can squeeze out megawatts. For the small household, just like you and me, they only can squeeze out probably one kilowatt. So that is a straight order away. And they would rather deal with the large customer than the small customer like us. But they try to make it even. The Senator bill 1125, that enabled the demand response program for the residential.
As a simple example, if I am an aggregator, I can find 10,000 customers that sign on to my program and I can divide the customer group into 2,500 each. And if I say, “I can control your air conditioner, turn it off for 50 minutes and then return.” So the second group is off for 50 minutes and then they return. So, cycle it through. In 50 minutes, you don’t feel a big difference in your temperature. But with that, you will be able to squeeze out some of the capacity and then that helps the system. But for that one, yes, it’s easier to say than to do it. Because you need control equipment. You need monitoring control equipment. And that, yes, that cost money.
Francis: Anything else users should know about how the heat impacts the grid?
Lee: We have more than 50% of electricity that comes from natural gas. And for the gas turbine, when temperature increases, they cannot produce full load because the unit becomes so hot. So they have to reduce their output to keep the temperature down.
Francis: So, if they ran them, say, 24/7, it’s possible they could break down?
Lee: They can. Well, for example, if they have a 1,000 megawatt capacity and with the high temperature they are not able to produce 1,000 megawatt, they have to reduce that. Because the unit has a temperature limit.
And then remember several years ago that some of the units had to reduce their output because we didn’t have enough water in the lake to cool it down? So there’s a lot of factors that impact the output of power generation.
Francis: We made it through Monday, July 11, when ERCOT asked Texans to conserve energy. What does that mean for the next several days or the rest of the summer?
Lee: If we can withstand the first strike, for the next one, I think the chances will be reduced. The chance for the blackout or rotated blackout will be reduced because, when you look at the situation, now we have more time to prepare.
The other one is from the market opportunity point of view, if the market participant or the generation companies see the price is higher, then they are going to make more profit, then they are probably O.K., more willing to put their unit online earlier, then you are going to have more resources.
Francis: And they could even make more investments in that.
Lee: In the short term, electricity, it will be difficult. But the one is, for example, that some company may have some emergency generators online, and then they normally serve it for the emergency, is that right?
I think that we should be OK. Get your fingers crossed because, yes, anything has a risk. If anything happens on some of the generators, some of the generator units, if they overheat or something, or some mechanical failure, then yes.
Bob Francis is business editor for the Fort Worth Report. Contact him at bob.francis@fortworthreport.org. At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here.
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