Will Texas Grid Upgrade Costs Fall on Consumers?

March 26, 2021

Above, Texas Blackout synopsis from PBS Nova. Confirms the events reported here, as well as the 130 billion dollar cost figure that I have seen elsewhere – which, if true, makes this the costliest weather disaster in US history.

Big question has been, how to prevent this from happening again, and who should pay.

One early proposal would have ratepayers spring for a fleet of new gas turbines with onsite fuel storage – to be used only in emergencies. Not surprising that this might have some attraction for oil/gas proponents in the state – however, with the announcement that Tesla has a 100 MWhr Li-on battery installation nearly completed, I will be watching with interest to see if the gas proposal gets traction.

A system of “emergency only” gas plants would be fantastically expensive per MWhr, as they would be “peakers” that would only see service in times of huge demand.
Li-on battery installations can make big money by providing grid services right from the start, and pay back their own capital costs in very short order, which would seem to make them a natural solution to the problem in a supposed “free market” based grid structure.

I’d bet the batteries are going to be built anyway, but interesting to see if the legislature saddles rate-payers with costs of a new gas system.

Texas Tribune:

As the Texas Legislature debated how to respond to last month’s winter storm-driven power crisis, executives at billionaire Warren Buffett’s Berkshire Hathaway Energy were pitching lawmakers an idea: The group would spend over $8 billion to build 10 new natural gas power plants in the state. Lawmakers would agree to create a revenue stream to provide Berkshire a return on its investment through an additional charge on Texans’ power bills.

Representatives for Berkshire Hathaway Energy have been in Austin meeting with lawmakers and state leaders for the past week and a half, according to a person working closely on the issue.

The proposed company, which would likely be known as the Texas Emergency Power Reserve, would build and maintain plants that sit idle during normal times, according to a slide deck obtained by The Texas Tribune. Whenever demand for power in the state threatened to surpass supply, these new plants would kick in to make up the difference, if ordered to do so by the state’s grid operator.

“When you flip that switch and say, look, demand has exceeded supply, it has to come on in 10 minutes,” Chris Brown, CEO of Berkshire Hathaway Energy, said in an interview Thursday with the Tribune. “That’s the Texas Emergency Power Reserve promise — that’s the promise that we’re making to the citizens of Texas.”

7 Responses to “Will Texas Grid Upgrade Costs Fall on Consumers?”

  1. Brent Jensen-Schmidt Says:

    Will the cost fall on consumers?
    Yes.
    Just a wild guess.

  2. John Oneill Says:

    ‘Li-on battery installations can make big money by providing grid services right from the start, and pay back their own capital costs in very short order’
    The grid services provided are a function of keeping the sine wave of the AC at 60 Hz. That’s what the Musk supplied battery in South Australia has been doing, not saving surplus wind power for lulls. That wouldn’t be necessary if nearly all the power came from massive, fast-spinning turbine-generators – their inertia, and the constant flow of steam, hot gas, or hydro water, keep them steady. One battery plant is enough to synchronise a whole fleet of wind turbines onto the grid, but it would take dozens for a significant reserve for low wind periods.
    South Australia has 2.3 GW of wind capacity, but today it was mostly only generating at about a tenth of that, or less; the battery made a couple of very brief contributions another order of magnitude again smaller.
    https://www.electricitymap.org/zone/AUS-SA?wind=false&solar=falsetributio

    • rhymeswithgoalie Says:

      Li+ tech batteries pretty much waste their greatest advantage sitting on slabs. The power barter markets starting up are a better way to make money off of storage technologies. Investors are calling the shots.

    • Brent Jensen-Schmidt Says:

      What the Elon battery is also doing well is replacing required backup/emergency spinning generators. This includes many conventional power plants. All related and making SHED loads of money and reducing GHG emissions. Storage of excess, as per John the Oneill, is a tiny factor.
      Aside: This once state owned cash cow has been sold to private enterprise.

    • J4Zonian Says:

      Yes, John,

      And the first 5 Model As didn’t replace all the horses in Dearborn. Thanks again for your ARF brilliance.

      Why not do something useful?

    • J4Zonian Says:

      This is exactly the same lie I’ve called you on elsewhere, John. Why are you pulling it again?

      It’s weaponized projection, in which the lunatic right wing spends tens of billions stopping clean safe renewable energy infrastructure from being built, and then criticizes it because not enough has been built to do the job it and only it can do—as if the amount that’s been built has anything to do with its physical capabilities.

      Why not do something useful?

  3. rhymeswithgoalie Says:

    As the Texas Legislature debated how to respond to last month’s winter storm-driven power crisis, executives at billionaire Warren Buffett’s Berkshire Hathaway Energy were pitching lawmakers an idea: The group would spend over $8 billion to build 10 new natural gas power plants in the state.

    The proposed company, which would likely be known as the Texas Emergency Power Reserve, would build and maintain plants that sit idle during normal times, according to a slide deck obtained by The Texas Tribune. Whenever demand for power in the state threatened to surpass supply, these new plants would kick in to make up the difference, if ordered to do so by the state’s grid operator.

    What an opportunistic way to get taxpayer-guaranteed investment in very expensive peaker plants. We know that the problem was not a matter of “demand exceeding supply” but “supply dropping out”, and this does not address the multivariate transmission failures. If the money instead were spent on making the grid more resilient, better sectorizing the distribution (to make rolling blackouts more effective, and permanently winterizing critical components) the supplies we have now would be less likely to go offline.

    Instead, we have these smooth-talking BHE people stroking the politicians with fossil fuel solutions.


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