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Sparks

The Mega Freeze of 2022 Is Still Haunting Power Plants

We’re still coming to terms with Winter Storm Elliot.

Winter Storm Elliott.
Heatmap Illustration/Getty Images

It’s been almost 10 months since deadly Winter Storm Elliot left a deep freeze over much of the country, resulting in widespread blackouts right before Christmas.

And ever since, electricity companies have been squabbling over the fallout with PJM Interconnection, the sprawling electricity market that stretches from the mid-Atlantic coast to the Midwest. About a quarter of the market’s capacity fell offline during the storm, with most of the blame falling on natural gas plants that were unable to deliver power. Penalties that PJM extracted from these plants drove some to bankruptcy while others went to federal energy regulators to say the penalties were too high.

Finally, on Friday, the parties told the Federal Energy Regulatory Commission that they were ready to settle. The settlement, if approved, would reduce the penalties from $1.8 billion to around $1.2 billion, which also means shaving payments to generators who were able to stay online during the storm by about a third.

But it probably won’t be the end of the story. Both the widespread failure during Elliott and the resulting tussle over how to pay for it underline just how hard it is to guarantee reliability, especially as the country becomes more electrified.

Generally, reliability on the electric grid is guaranteed by natural gas plants, which are supposed to be able to easily switch on and off to generate power when they’re needed most. In fact, about 40% of our electricity comes from natural gas. But you see the problem: When the gas system goes down, households lose access to heating, provided by natural gas directly via furnaces or by electricity via heat pumps. In the winter this means people will die.

And natural gas really did fall to pieces during the storm. According to a PJM report, “outages on gas units were primarily attributed to physical plant issues,” both because the cold made power plants inoperable and because the distribution network itself seized up, leaving gas plants unable to access the fuel they needed to produce power. This is similar to what happened during 2021’s Winter Storm Uri, a deep freeze that led to days of power outages in Texas that claimed over 200 lives.

Both situations suggest a few things: First, we need better forecasting. FERC said in its own review of the power outages that forecasts by grip operators underestimated how much electricity would be needed at peak times during the storm, in some cases by more than 10 percent.

Second, natural gas plants might not be as reliable as they’re supposed to be — and it’s unclear where the money will come from to make them more resilient.

And third, that merely incentivizing energy markets and individual generators to get this right only goes so far — huge portions of the generation fleet were unable to cope with the high demand for power, even at the risk of massive (if slightly reduced) penalties.

Electricity markets might need a little more oversight.

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Sparks

The Country’s Largest Power Markets Are Getting More Gas

Three companies are joining forces to add at least a gigawatt of new generation by 2029. The question is whether they can actually do it.

Natural gas pipelines.
Heatmap Illustration/Getty Images

Two of the biggest electricity markets in the country — the 13-state PJM Interconnection, which spans the Mid-Atlantic and the Midwest, and ERCOT, which covers nearly all of Texas — want more natural gas. Both are projecting immense increases in electricity demand thanks to data centers and electrification. And both have had bouts of market weirdness and dysfunction, with ERCOT experiencing spiky prices and even blackouts during extreme weather and PJM making enormous payouts largely to gas and coal operators to lock in their “capacity,” i.e. their ability to provide power when most needed.

Now a trio of companies, including the independent power producer NRG, the turbine manufacturer GE Vernova, and a subsidiary of the construction firm Kiewit Corporation, are teaming up with a plan to bring gas-powered plants to PJM and ERCOT, the companies announced today.

The three companies said that the new joint venture “will work to advance four projects totaling over 5 gigawatts” of natural gas combined cycle plants to the two power markets, with over a gigawatt coming by 2029. The companies said that they could eventually build 10 to 15 gigawatts “and expand to other areas across the U.S.”

So far, PJM and Texas’ call for new gas has been more widely heard than answered. The power producer Calpine said last year that it would look into developing more gas in PJM, but actual investment announcements have been scarce, although at least one gas plant scheduled to close has said it would stay open.

So far, across the country, planned new additions to the grid are still overwhelmingly solar and battery storage, according to the Energy Information Administration, whose data shows some 63 gigawatts of planned capacity scheduled to be added this year, with more than half being solar and over 80% being storage.

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Sparks

An Emergency Trump-Coded Appeal to Save the Hydrogen Tax Credit

Featuring China, fossil fuels, and data centers.

The Capitol.
Heatmap Illustration/Getty Images

As Republicans in Congress go hunting for ways to slash spending to carry out President Trump’s agenda, more than 100 energy businesses, trade groups, and advocacy organizations sent a letter to key House and Senate leaders on Tuesday requesting that one particular line item be spared: the hydrogen tax credit.

The tax credit “will serve as a catalyst to propel the United States to global energy dominance,” the letter argues, “while advancing American competitiveness in energy technologies that our adversaries are actively pursuing.” The Fuel Cell and Hydrogen Energy Association organized the letter, which features signatures from the American Petroleum Institute, the U.S. Chamber of Commerce, the Clean Energy Buyers Association, and numerous hydrogen, industrial gas, and chemical companies, among many others. Three out of the seven regional clean hydrogen hubs — the Mid-Atlantic, Heartland, and Pacific Northwest hubs — are also listed.

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Sparks

Why Your Car Insurance Bill Is Making Renewables More Expensive

Core inflation is up, meaning that interest rates are unlikely to go down anytime soon.

Wind turbines being built.
Heatmap Illustration/Getty Images

The Fed on Wednesday issued a report showing substantial increases in the price of eggs, used cars, and auto insurance — data that could spell bad news for the renewables economy.

Though some of those factors had already been widely reported on, the overall rise in prices exceeded analysts’ expectations. With overall inflation still elevated — reaching an annual rate of 3%, while “core” inflation, stripping out food and energy, rose to 3.3%, after an unexpectedly sharp 0.4% jump in January alone — any prospect of substantial interest rate cuts from the Federal Reserve has dwindled even further.

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