May 8, 2021

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Natural gas suppliers come under fire for Texas electricity crisis

3 min read


Texas, the fossil fuel hub of the United States, was abandoned by its natural gas delivery system last week energy crisis, according to the head of the country’s leading independent power producer.

Critical comments from Curt Morgan, chief executive of Vistra, one of the U.S. electric power industry’s largest consumers of natural gas and coal, were addressed to a panel investigating the emergency on Thursday.

Generators powered by gas, wind, coal and nuclear power all faltered during the record-breaking freeze that left more than 30 dead. The generational collapse has led some politicians to blame renewable energy sources to the exclusion of others.

But Morgan said the bigger problem was with gas supply to the gas-powered generators, given their dominant share in supplying the Texas grid.

“The big story here,” Morgan said at a Texas House of Representatives committee hearing, “was the failure of the gas system to work.”

Irving-based Vistra has 19 generators in Texas with a capacity of over 18 gigawatts, most of which burn fossil fuels.

Comments from its CEO deflected concerns that Texas power producers had not adequately armed their own equipment against inclement weather. Vistra was winter-ready and spent an additional $ 10 million to prepare her factories for the storm approaching, Morgan said.

Gas-fired power plants represent more than half of generation capacity in the state’s largely siled electricity market. Morgan said gas delivery problems ranged from frozen wellheads to processing plants losing power to pipelines unable to supply enough fuel.

About 90% of Vistra’s gas fleet in Texas was available, but it was only operating at 75% of capacity. “We just couldn’t get the gas at the pressures we needed,” Morgan said.

Mauricio Gutierrez, managing director of NRG Energy – another prominent generator operating in Texas – said gas pressure “problems” had twice triggered its 330-megawatt Greens Bayou power plant.

“If the natural gas system is compromised, the electrical system is going to be compromised,” he said.

Thad Hill, chief executive of Houston-based Calpine, said two of the company’s dozen gas-fired power plants in Texas had shut down due to freezing conditions. Another set of factories were closed during the grid frequency cascading drop in early February 15. The stopping of gas flows, however, accounted for the largest share of the failures.

On February 16, “40 percent of our deliveries were cut by suppliers,” Hill said. “There were times during this event where 60% or more of our offline total was related to gas supply.”

More than 52 gigawatts of the state’s 108 GW of installed capacity were offline at the worst time last week, Bill Magness, chief executive of the Texas Electrical Reliability Council (Ercot) said Wednesday in a presentation. A rapid drop in power supplies led to the dangerous drop in frequency that threatened to permanently damage the grid, he said.

He said his nonprofit carried out spot checks of climate aging practices at about 80 power plants per year out of the 680 total spread across Texas.

Gutierrez said all plants at NRG are prepared for winter every September. But he said climate change should prompt power companies to modify their models for extreme weather conditions.

“We’re going to be looking at our wintering programs with a new baseline, with a new baseline that has been set by this unprecedented winter storm,” he said.

Wholesale electricity prices in the Ercot market hit their allowable maximum of $ 9,000 per megawatt hour last week, compared to an average of about $ 25. The high price aims to encourage consumers to ration and encourage investment in sufficient production capacity.

Texas market is unique to the United States in that producers make money on the energy they sell, but not to keep their capacity in reserve.

“I was a big supporter of this deal, and my faith was shaken,” Morgan said.

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