As the global community continues to grapple with the coronavirus (COVID-19), the Atlantic Council is open for business. Our business, meetings, and events, however, are occurring virtually. For more information, please read an update from our President and CEO.
Event recap
On February 24, 2021, the Atlantic Council Global Energy Center hosted an event focused grid resilience and reliability in the face of increasingly severe extreme weather events, with a spotlight on the February 2021 winter freeze crisis in Texas.
The event kicked off with opening remarks by Margaret Jackson, deputy director of climate and advanced energy at the Atlantic Council Global Energy Center, as she emphasized the importance of addressing vulnerabilities in the power grid. Following her remarks, the event transitioned to a virtual panel discussion featuring Rob Gramlich, founder and president of Grid Strategies, Ben Hertz-Shargel, head of data science and demand management at Rhythm and nonresident senior fellow at the Atlantic Council Global Energy Center, Heather Rock, director of climate resilience at Pacific Gas and Electric Company, Bentina Chisholm Terry, senior vice president of Metro Atlanta and corporate relations at Georgia Power, and Michael E. Webber, chief science and technology officer of ENGIE and Josey Centennial professor in energy resources in mechanical engineering at the University of Texas at Austin. Jackson moderated the panel discussion.
Panelists kicked off the discussion as the addressed the impact of extreme weather events on power demand and grid stability, with the Texas winter crisis a frequent point of reference. Hertz-Shargel described the Texas electricity crisis as a culmination of mechanical failures, technological shortcomings, and fuel supply shortages across the entire state. As every county in the Lone Star State struggled through a rare cold snap, energy supplies ran short while demand skyrocketed, Hertz-Shargel noted. He mentioned that the Electric Reliability Council of Texas (ERCOT), which oversees the Texas electricity grid, did not adequately plan for unprecedented energy demand that resulted, and underscored the regionalization of energy markets may be critical in the future.
A significant amount of natural gas went offline in the midst of the crisis, which Webber asserted was due to high energy demand, a failure to winterize natural gas equipment, the freezing off of natural gas supply, a lack of storage capacity for fuel and power, and the interdependence of natural gas with the electricity system, which resulted in cascading generation failures. Webber expressed that climate science-based planning might justify the need for Texas to winterize its natural gas equipment in the face of increasingly severe extreme cold events.
With regard to the role renewable energy played in the electricity crisis, Gramlich affirmed that wind and solar developers in Texas also did not account for the possibility of extreme weather events, which ultimately reinforces the need for state or federal regulation to ensure reliability. Gramlich suggested that interregional grid connections, something ERCOT, as an energy island, does not enjoy, are key resilience measures that should be seriously considered as the state recovers from the disaster.
Speaking to Southern Company’s approach to grid reliability and resiliency in the face of low-probability, high-impact events, Chisholm Terry explained that Georgia Power conducted reserve margin studies to analyze preparedness in peak demand situations and ultimately decided to increase winter reserve capacity to account for demand uncertainties. After the polar vortex event in January 2014, Southern Company decided to winterize their generating facilities and harden key infrastructure against winter temperatures. Winterization encompasses installation, maintenance, and personnel oversight of freeze-prevention enclosures, among other measures.
Like many other parts of the country, California continues to experience increasingly frequent and severe weather events, notably wildfires. Rock identified three lessons learned from working on California’s electricity system that could be applied to broader grid resilience strategies: plan ahead for future extreme weather events, acknowledge the human cost of grid failure, and ensure that affordability, resiliency, and reliability are all prioritized.
In addressing a question on the importance of demand response, Hertz-Shargel outlined two key issues that affect grid planning: the need for models that can accurately predict weather events and the interdependence of fuel supply. Additionally, Hertz-Shargel asserted that grid resiliency can be achieved through regulated weather stress tests, an emergency response plan, weatherization requirements to enter the electricity market, natural gas storage, black-start capacity, and resource commitments from operators in advance of anticipated winter storms. Gramlich added that weather stress tests conducted by the Department of Energy and Federal Electricity Regulatory Commission would offer a wide range of benefits; they would be able to identify resource inadequacy and highlight opportunities for interregional grid connections.
Transitioning to the topic of regulation, Webber emphasized that Texas’ electricity regulatory structure is very weak, as ERCOT only pushes operators to integrate non-binding, usually low reserve capacities as recommendations, with no stand-by generation mandated by law. With regard to scarcity pricing, Webber affirmed that it may be more sensible for generators to pay for electricity as they go, rather than “pay for a $50 billion surprise every once in a while,” referring to the total price tag ascribed to the state power crisis. He also affirmed Rock’s earlier point, agreeing that climate modeling should be a key aspect of grid planning, and emphasized the decarbonization, economic, and reliability benefits of grid interconnections with other states. Other regulatory options, according to Michael Webber, could include weatherization mandates and the allocation of funding from Texas’ “rainy-day” fund to infrastructure investments.
Maria Castillo is a Spring 2021 Intern at the Atlantic Council Global Energy Center.
Agenda
A conversation with
Rob Gramlich
Founder and President
Grid Strategies
Ben Hertz-Shargel
Head of Data Science and Demand Management
Rhythm;
Nonresident Senior Fellow
Atlantic Council Global Energy Center
Heather Rock
Director, Climate Resilience
Pacific Gas and Electric Company
Bentina Chisolm Terry
Senior Vice President, Metro Atlanta and Corporate Relations
Georgia Power
Michael E. Webber
Chief Science & Technology Officer
ENGIE;
Josey Centennial Professor in Energy Resources, Mechanical Engineering
University of Texas at Austin
Moderated by
Margaret Jackson
Deputy Director, Climate and Advanced Energy
Atlantic Council Global Energy Center
Read about this topic
The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.