Bruce Bullock, Director Of The Maguire Energy Institute At SMU, Speaks With Jack Fink
JACK FINK: Bruce Bullock, director for the SMU Maguire Energy Institute, thank you so much for joining us. Obviously, ERCOT's having major problems with the power grid. Why is this happening? And what has to be done to fix this?
BRUCE BULLOCK: There are a number of issues there ERCOT's having to deal with right now. First of all, the unprecedented demand this time of year. We've got extremely cold temperatures for multiple days in a row, which is causing really unprecedented power demand and natural gas demand, which is the primary fuel for power and heat in the state.
Second of all, you've got a situation where they've got a number of large natural gas units, generation units, offline. They apparently are either having mechanical problems or they're having trouble sourcing some natural gas because natural gas is being diverted to other uses, i.e. heating and things of that nature. That's about 29,000 megawatts of generation capacity, which is a huge, huge chunk of the state's generation capacity.
And then the third-- the third issue is wind power, but this is a little more of a minor issue this time of year. The-- the wind power and the wind generators in West Texas, especially, a lot of those blades, roughly half of the them are iced up and can't generate power. We don't plan on a lot of wind power in the winter, so that's not as big of an issue. But those-- those natural gas plants, that's-- that's a huge issue.
And as a result of that, to keep the-- the grid from being further damaged, they're having to rotate these blackouts in a very controlled manner to keep it from being damaged further.
JACK FINK: And is that helping? I mean, the fact that these-- I mean, some people have been without power for two days already. Others have these rolling blackouts. Others haven't lost their power at all. Are these controlling blackouts working? And what will that do?
BRUCE BULLOCK: Well, these control blackouts, they don't have a whole lot of-- a whole lot of choice at this point. It's a bit of a Hobson's choice for 'em. But I, myself, have had, I think, two hours of power in the last 30. So I'm as frustrated as anybody.
But if they don't do this in a very controlled and systematic way. Then they risk longer-term damage to the poles and wires and substations and things of that nature, which takes weeks to repair, as opposed to-- as opposed to days. And we certainly this time of year don't want to be in that situation.
The longer term, they're going to have to look at this-- the whole system-- and determine why we got ourselves into this situation in the first place. Can we winterize this-- this grid more robustly? And how much is that going to cost? And are we willing to pay that price?
JACK FINK: And I mean, this is not necessarily a new problem. This happened in 2011, 10 years ago. It didn't happen to the extent that we're seeing, as far as these controlled blackouts, but it happened. And the same thing back in 1989, and you were telling me earlier in the '70s, as well.
BRUCE BULLOCK: No, this is-- this is not the first time this has happened. Certainly-- and North Texas is-- and Texas, in general, is subject to unpredictable weather and-- in the summer and in the winter. And certainly, they have built the grid here to withstand high temperatures and in the summer. So it's-- it's certainly not configured for this kind of weather on a regular basis. And that's going to have to-- that's going to have to be looked at.
The other issue is we've been warning for some time about capacity issues. And especially in the summertime, businesses frequently get notices to curtail their energy use towards the end of the day. And with the growth in the state that's been coming and so forth, we've been advocating a look at the system to encourage more development of generation resources.
It's unclear whether that would help here, but it probably wouldn't hurt, especially if the problem with those plants is mechanical. Certainly, if the problem is that they can't source the natural gas they need, then that's another issue. But additional backup power that's-- that's prepared for winter would certainly be an advantage in this situation.
JACK FINK: So does this mean that they haven't adequately winterized the system?
BRUCE BULLOCK: Certainly, they haven't adequately winterized it for this type of winter event. For the average winter event in Texas, which is, you know, maybe an occasional freeze and a light dusting of snow, then, on average, that's that doesn't cause the power grid a great deal of problems.
But for a prolonged ice and snow and subfreezing weather, we've seen this several times now, and it certainly needs to-- it certainly needs to be examined and addressed.
JACK FINK: And what about-- you know, we talked a little bit about when. We talked about natural gas. There's coal. There's also solar. Does-- and nuclear. What are the most reliable? And should Texas, you know, adjust accordingly?
BRUCE BULLOCK: Well, certainly, nuclear power is the most reliable. It's also the most clean. However, it's the most-- most expensive, as well. But nuclear power, it runs all the time, very, very reliable, and one-- you know, one installation generates a lot of power. If the state right now did not have Comanche Peak and the South Texas Nuclear Project, we'd be in a lot worse situation than we are.
So you know, that's certainly something that needs to be looked at. However, the state's competitive electric market just does not allow that type of capital, if you will, to be put forward for that kind of plant in this state. That would require some type of change in the market structure in order for that kind of plant to-- to be built.
You see those being built-- there are very few of them being built in the United States, but those that are are in heavily-regulated states. Coal--
JACK FINK: Does deregulation have to be-- does that-- is deregulation part of the problem or no?
BRUCE BULLOCK: Well, deregulation certainly has-- has created a situation where the investors demand a return on their investment, and they demand it fairly quickly, which makes-- which makes natural gas and-- and, to a certain extent, maybe some storage and other types of facilities that are beginning to be developed, the preferred investment.
So if we would want to put a additional nuclear plants in, we would have to-- we'd have to go back to some type of regulated structure. Given how-- how far the state has come in 20 years, despite the difficulties in a deregulated scenario, that would be an extremely difficult cat to put back in the bag, if you will.