I’m not sure what to think about crypo’s role in all of this honestly. My initial thoughts: The miners go to Texas because they can often get free power and shut off when prices rise. In theory this could help stabilize prices but not if there are huge amounts of subsidized wind and solar coming online. When they switch off during high price periods they’re not sending revenue to the dispatchable generators that need it. So I I’m not sure crypto hurts or helps with grid stability but I’m happy to learn more.
And here’s another problem with ERCOT, they count private use network generators in their natural gas resources. Meaning, they count power plants they really don’t control. For example, they might count a gas power plant at a chemical plant. If the weather is bad and they need the power, ERCOT assumes the chemical plant will divert its electricity to the grid.
ERCOT also relies on a handful of power plants that sit both in the edge of in ERCOT and a neighboring grid. Those plants can decide which grid to sell power to depending on contracts and prices. If it’s a cold winter storm, the weather doesn’t magically stop at the grid boundary. Those plants may or may not send electricity to ERCOT, even though ERCOT counts those plants as part of its installed capacity.
Well, the Austin ice storm and East Texas/NW LA June hurricane level event show a whole home backup generator is the only solution. If trees and tree branches undermine the grid then all one can do is wait for the linemen to get it working again. Obviously we could bury power lines but natural gas lines are already buried so families with vulnerable members need to do what is necessary.
That's ERCOT for you. Thankfully, here in the panhandle, we don't depend on ERCOT.
But, those living down south will need to get either another nuclear plant, more gas power plants, or a coal plant. But the DC crowd wants us to go green, and they don't want to listen to those who live in the area.
It's a very complex issue and federal funds are not helping with the disproportionate subsidies for wind, solar, and batteries. Texas voters did pass funding for gas only power plant additions to ERCOT (https://thehill.com/policy/energy-environment/4299638-texas-gas-power-plants-electric-grid-reliability-approve/), but response from generators has been less than enthusiastic. Conventional generation is finding funding hard to come by with banks viewing them as high risk. Where renewables have an easier time with funding because the feds are paying part of the bill.
The real enemy of renewables in the winter is ice. Yes cloudy calm weather can shutter them, but an ice storm takes them out until it warms up or deicing equipment can be brought on site.
As I am sure you're aware, materials get pretty brittle at those temps. I spent a few years in Billings MT. There is no doing anything fast at those temps including starting your car. Combined cycle gas turbines loose some turn down capacity in the cold. At low loads the CC units pitch the inlet guide vains to keep exhaust gas temp high enough for the boiler. In the cold pitching the vains can cause icing where the pressure drops entering the turbine.
Ice makes a mess for sure, but these cold snap (and conversely heat wave) conditions typically coincide with stable high pressure systems that can linger for days and that generally leads to still conditions.
The unprecedented weather events in Texas/Louisiana also contributed to the high inflation as production declined as the economy was opening up in 2/2021 and then Hurricane Ida was the final straw. Florida gets hit by a hurricane and it only impacts Floridians…Louisiana gets hit by a hurricane and everyone is impacted via higher energy prices.
New subscriber and fellow Texan. Great article guys.
Do these numbers take into account the 3-5 gigawatts of Bitcoin mining that can be switched off during peak load periods?
Check out the recent Parker Lewis interview on the investors podcast with Preston Pysh (episode BTC156). Very interesting how much of their conversation can be tied into your analysis and create a possible path to a solution.
Obviously in a perfect world we would kill all solar and wind and promote nuclear, but it seems like the powers at be won’t let that happen - juicy subsidies and tax incentives. The climate czars use game theory to manipulate markets to their liking and for their benefit. I think Bitcoin, also built on game theory, offers solutions to some of these grid problems - in mining, and also as a growing monetary system that could non-violently force positive change.
I’m not sure what to think about crypo’s role in all of this honestly. My initial thoughts: The miners go to Texas because they can often get free power and shut off when prices rise. In theory this could help stabilize prices but not if there are huge amounts of subsidized wind and solar coming online. When they switch off during high price periods they’re not sending revenue to the dispatchable generators that need it. So I I’m not sure crypto hurts or helps with grid stability but I’m happy to learn more.
And here’s another problem with ERCOT, they count private use network generators in their natural gas resources. Meaning, they count power plants they really don’t control. For example, they might count a gas power plant at a chemical plant. If the weather is bad and they need the power, ERCOT assumes the chemical plant will divert its electricity to the grid.
ERCOT also relies on a handful of power plants that sit both in the edge of in ERCOT and a neighboring grid. Those plants can decide which grid to sell power to depending on contracts and prices. If it’s a cold winter storm, the weather doesn’t magically stop at the grid boundary. Those plants may or may not send electricity to ERCOT, even though ERCOT counts those plants as part of its installed capacity.
As a Texas resident this is both terrifying and expected. Things are going to get worse before they get better.
Well, the Austin ice storm and East Texas/NW LA June hurricane level event show a whole home backup generator is the only solution. If trees and tree branches undermine the grid then all one can do is wait for the linemen to get it working again. Obviously we could bury power lines but natural gas lines are already buried so families with vulnerable members need to do what is necessary.
That's ERCOT for you. Thankfully, here in the panhandle, we don't depend on ERCOT.
But, those living down south will need to get either another nuclear plant, more gas power plants, or a coal plant. But the DC crowd wants us to go green, and they don't want to listen to those who live in the area.
“But, those living down south will need to get either another nuclear plant, more gas power plants, or a coal plant”
If those can’t get past Austin we recommend getting a coat.
It's a very complex issue and federal funds are not helping with the disproportionate subsidies for wind, solar, and batteries. Texas voters did pass funding for gas only power plant additions to ERCOT (https://thehill.com/policy/energy-environment/4299638-texas-gas-power-plants-electric-grid-reliability-approve/), but response from generators has been less than enthusiastic. Conventional generation is finding funding hard to come by with banks viewing them as high risk. Where renewables have an easier time with funding because the feds are paying part of the bill.
The real enemy of renewables in the winter is ice. Yes cloudy calm weather can shutter them, but an ice storm takes them out until it warms up or deicing equipment can be brought on site.
Up where I live in MN, even the cold weather turbines shut down at -22F to prevent them from being damaged.
As I am sure you're aware, materials get pretty brittle at those temps. I spent a few years in Billings MT. There is no doing anything fast at those temps including starting your car. Combined cycle gas turbines loose some turn down capacity in the cold. At low loads the CC units pitch the inlet guide vains to keep exhaust gas temp high enough for the boiler. In the cold pitching the vains can cause icing where the pressure drops entering the turbine.
Ice makes a mess for sure, but these cold snap (and conversely heat wave) conditions typically coincide with stable high pressure systems that can linger for days and that generally leads to still conditions.
The unprecedented weather events in Texas/Louisiana also contributed to the high inflation as production declined as the economy was opening up in 2/2021 and then Hurricane Ida was the final straw. Florida gets hit by a hurricane and it only impacts Floridians…Louisiana gets hit by a hurricane and everyone is impacted via higher energy prices.
Curious about your thoughts on ERCOT and the states’ courtship of crypto miners which have placed a tremendous strain on the grid. Cheers!
New subscriber and fellow Texan. Great article guys.
Do these numbers take into account the 3-5 gigawatts of Bitcoin mining that can be switched off during peak load periods?
Check out the recent Parker Lewis interview on the investors podcast with Preston Pysh (episode BTC156). Very interesting how much of their conversation can be tied into your analysis and create a possible path to a solution.
Obviously in a perfect world we would kill all solar and wind and promote nuclear, but it seems like the powers at be won’t let that happen - juicy subsidies and tax incentives. The climate czars use game theory to manipulate markets to their liking and for their benefit. I think Bitcoin, also built on game theory, offers solutions to some of these grid problems - in mining, and also as a growing monetary system that could non-violently force positive change.
I was living in Texas at the time, too, and experienced firsthand how destructive these stupid policies can be.