ERCOT lost almost half of generation capacity in storm, causing 20-GW load shed

New York — Almost half of Electric Reliability Council of Texas generation capacity – 52.3 GW in all -- was forced out at the highest point during the winter storm starting Feb. 14, which prompted rotating outages to cut load by as much as 20 GW, ERCOT CEO and President Bill Magness said Feb. 24.

With demand climbing and many power plants unable to provide power, ERCOT ordered load shedding at 1:20 am CT on Feb. 15 to prevent the risk of a systemwide blackout. Power plants across its operating territory, however, continued to struggle through the hour, prompting additional load shedding and pushing grid frequency below 59.4 Hz for four minutes and 23 seconds.

Had the grid's frequency remained below 59.4 Hz for nine minutes or more, more generation units would have tripped, risking a systemwide shutdown that could have cut power to millions more, significantly slowed restoration and damaged units across the grid, Magness said during a board meeting.

"That is what we cannot allow to happen," Magness said.

With 52,277 MW forced offline at one point, the outage event significantly exceeded past ones, including February 2011, when 14,702 MW of generation was in forced outage. ERCOT canceled the most recent load-shedding order at 12:42 am Feb. 18 and ended the Energy Emergency Alert around 10:30 am Feb. 19.

Details of generation outages

The presentation Magness provided at the board meeting is the most detailed accounting so far of the grid's failure to provide power through this February's polar vortex event, putting the state's electric grid, its regulators and policymakers under tremendous pressure and leading to the resignation of ERCOT's four independent board members, effective after the meeting.

In the presentation, Magness noted that the types of generation that went out of service was widely distributed, as to type. At peak of outages on Feb. 15-16, the capacity out were as follows:

• Natural gas: about 27 GW, or about 52% of capacity
• Wind: about 18 GW, or about 57% of capacity
• Coal: about 6 GW, or about 44% of capacity
• Solar: about 750 MW, or about 12% of capacity
• Nuclear: about 700 MW, or about 13% of capacity

The contrast with February 2011's rolling outage event was stark, as the earlier event only had outages for 7.5 hours and were loads to be shed small enough that distribution utilities could actually cycle customers online and off, whereas the 2021 event had outages for 70.5 hours and required such a large total load to be shed, that some customers had to remain offline for days, so that power could be continued for essential services, Magness said.

Financial implications

In addition to learning about the causes and events of the Feb. 14 energy emergency, board members sought information about the financial ramifications, as Carrie Bivens, who directs Potomac Economics' independent market monitor office for ERCOT, noted that real-time prices hovered at or near the systemwide offer cap of $9,000/MWh most of Feb. 15 and virtually all of Feb. 16 through mid-morning Feb. 19.

Sam Harper, who represents the industrial consumer segment on the board, said many fellow industrial energy consumers have been receiving extremely large invoices for power they did not consume, as almost all were curtailing energy use to help cope with the energy emergency. Such invoices have been submitted based on energy use estimates that proved incorrect in the face of the winter storm.

Vanessa Anesetti-Parra, who represents the independent retail electricity provider segment, suggested that ERCOT consider suspending the market for the period of Feb. 14-21 in order to give participants and ERCOT staff time to work out the likely massive scale of financial transactions involved.

However, Kenan Ogelman, ERCOT vice president for commercial operations, said, "There's a train of dominos that flow not only through ERCOT but also to other entities like [the Intercontinental Exchange] and bilateral markets as well."

A delay in ERCOT's market function could create a "financial crisis further downstream," where federal regulators, for example, may not grant flexibility, Ogelman said.

"The very high invoices will actually start hitting Thursday and Friday," Ogelman said. "The collateral numbers that we hold are high; however the number are not necessarily evenly distributed across parties, so these next two days end up being extremely important."

Sean Taylor, ERCOT's vice president and CFO, said the grid operator has "several billion dollars in cash collateral on board," and the Public Utility Commission of Texas has authorized it to draw on credit facilities totaling $1 billion.

"The next couple of days will really determine where we stand," Taylor said.