It is easy to pick on ERCOT in this situation. However, this is only a massive failure due to the private generators failing to run and breaking. They are going to lose billions for this situation, so I think the correct market features are in place to align returns with scarcity.
However, thermal units performing at this outage level is unheard of in context. In reality, these units have never been in temps near this level and we’re obviously it prepared. It’s like 30% of the cars on the road breaking and not expecting traffic. Every single fuel source has tripped, plants built during regulation tripped, plants built after deregulation tripped.
in 2011 when this happened prior, it was almost all the “new” plants that tripped, the 8500 ccgt units. That hasn’t been the case this time as everything broke. Obviously, all units were not preparing for weather at this temperature. It’ll be fascinating to learn what could’ve been done. I’m guessing it will be a $50k part or overhaul could have saved the company billions.
I know a lot of people at ERCOT, including the executives. They are not as dumb as this event would lead one to believe. They are almost all good engineers who care deeply about reliability. They trusted generators to be prepared and they were burned. It’ll be fascinating to understand if this was infrastructure problem within the plants (instrument problems) or mostly led by pipeline capacity problems or NG generation.
I fully expect Texas to pay billions for power that won’t be needed again for 50 years.
cbsaustin.com
