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Following “aggressive grid management planning,” the Texas electrical grid is prepared to meet the winter 2022-2023 forecast peak demand of nearly 67.4 GW, the Energy Reliability Council of Texas (ERCOT) said.
ERCOT late last month released its Seasonal Assessment of Resource Adequacy (SARA) report, in which it detailed the 87.3 GW of resources that are expected to be on-hand from December through February.
“The Texas grid is more reliable and resilient than ever before due to landmark reliability reforms” by ERCOT and the Public Utilities Commission of Texas “implemented in the past year and a half, including required winterization of the generation fleet, and added firm fuel supply service (FFSS) by a number of generators,” an ERCOT spokesperson told NGI.
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Following an August ruling from the Railroad Commission of Texas, ERCOT is required to have enough backup fuel, aka FFSS, that would support operations for 48 hours in the event natural gas supply is interrupted as it was during Winter Storm Uri in February 2021.
As of Nov. 15, ERCOT had procured more than 2.9 GW in FFSS, including 18 fuel oil generation resources and one natural gas resource.
The Texas grid operator said it has an installed capacity of about 1,220 MW of nonsynchronous ties and capacity contributions from external regions, based on net imports during the 2021 winter cold snap.
The peak winter resource mix could also involve nearly 950 MW of available battery storage that ERCOT said it assumes would be available based on reserves the operator had this summer amid a July heat wave that tightened margins.
Meanwhile, ERCOT expects only two generation resources to be unavailable this winter. One coal-fired and one gas-fired unit representing a combined 685 MW are out of service this winter.
Regardless, the Texas grid operator has incorporated risk scenarios based on post-Uri recommendations: a base and moderate risk scenario and an extreme risk scenario.
In the most extreme low-probability, high-impact case, ERCOT assumed it would use 21.8-32.8 GW in reserve capacity to cover “extreme unplanned outages” based on both “historic observations, combined with additional outages…comparable to Winter Storm Uri and extreme low wind power production.”
Following weatherization measures performed by generation owners and natural gas supply and pipeline operators over the last year and a half, as well as the FFSS reserves, ERCOT predicted a “reduction to weather-related and fuel limitation outages” if a Uri-like event were to occur this winter.
That said, the grid operator announced it has instituted a program aimed at improving grid reliability via voluntary energy use reductions.
“Our goal with this program is to work with large customers in supporting the reliability of the Texas power grid,” said ERCOT’s Woody Rickerson, vice president of System Planning.
According to an ERCOT memo sent to customers with large flexible loads (LFL), the program is the result of “anticipated interconnection of an increasing number of LFLs in the ERCOT Region.”
An ERCOT spokesperson told NGI that the LFL energy use reduction program “is primarily intended for LFL customers, but any large customer directly connected to a Transmission Service Provider’s facility can participate, subject to approval by ERCOT.”
One such group of customers includes cryptocurrency miners.
Texas has seen, and is projected to continue to see, an influx of miners in light of the state’s deregulatory approach. According to the Texas Blockchain Council (TBC), the state’s position as the No. 1 producer of wind generation in the United States and the No. 2 producer of solar generation adds to its appeal.
According to a September TBC presentation to ERCOT, in 2021 there were 15-20 Bitcoin mining companies operating in the state and consuming 700-1,000 MW, with the median facility operating on 50 MW.
For 2022, the TBC estimated the number has grown to 30-40 operational companies running on 1,500-2,000 MW, with the median facility expanding to 100 MW.
The TBC projected that, as of April 2022, Texas represents 8-12.5% of the entire global Bitcoin network, which currently consumes 16-25 GW of electricity annually. What’s more, Texas is attracting about 2 GW/year in Bitcoin mining capacity, the agency reported.
ERCOT regularly updates the interconnection queue for LFL customers, a spokesperson said, noting that as of Oct. 20, the grid operator has about 37 GW of LFLs lined up.
LFL customers, including cryptocurrency miners and others, “are large power users but have the flexibility and willingness to reduce their energy use quickly, if needed. By working with these large loads during peak demand periods, we will better serve all Texans while keeping the grid reliable and resilient,” Rickerson said.
The program, expected to go live in January, “is temporary and completely voluntary until ERCOT establishes a long-term set of rules,” an ERCOT spokesperson said.
The growth prompted a coalition of Democratic lawmakers in October to open an investigation into ERCOT.
“Over the next 12-15 months, 5-6 GW of new demand is expected, enough electricity to power about 1.2 million homes,” said Sen. Elizabeth Warren (D-MA) in an October letter to ERCOT CEO Pablo Vegas. Warren noted that ERCOT’s August LFL projections showed “miners have applied to use up to 33 GW of electricity, enough to power New York or Florida.”
When a July heat wave swept over Texas, miners enrolled in a voluntary demand response program were collecting ERCOT “subsidies in the form of demand response payments when they shut off their mining operations…” Warren said.
Such subsidies were the subject of the investigation, as “a miner can generate up to 10% of its annual revenue through engaging in these shutdown services during peak demand.
“Cryptomining is adding significant demand to an already unreliable grid…and contributing to the global climate crisis. Yet at the same time, cryptominers benefit from huge ERCOT subsidies in the form of demand response agreements that come at the expense of ratepayer,” Warren said.
Sens. Sheldon Whitehouse (D-RI), Ed Markey (D-MA), and Reps. Al Green (D-TX), Katie Porter (D-CA), Jared Huffman (D-CA) and Rashida Tlaib (D-MI) cosigned the letter with Warren seeking information on payments to cryptocurrency miners.
In response, Vegas wrote in a November response to lawmakers that the interim interconnection policy exists “for all large loads,” or loads “larger than 75 MW and those larger than 20 MW if co-located with an existing generator.”
While crypto mining facilities are awarded payments for providing support in the event of a grid disturbance, “…total revenues for this service has been relatively small,” Vegas noted. “Cryptominers’ highest monthly share of the total amounts paid each month was 7.43% in April. The greatest monthly revenues known cryptominers have received for providing this service was $3.1 million in May 2022, representing 6.32% of that month’s total.”
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Related topics: crypto Ercot Outages Railroad commission Reduction Winter Storm Uri
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