Things Are Going to Break’: Texas Power Plants Are Running Nonstop





Will Wade, Mark Chediak and Naureen Malik
Fri, July 15, 2022

(Bloomberg) -- As searing Texas heat drives power demand to record highs, the state’s grid operator is ordering plants to run at a historic pace, often forcing them to put off maintenance to keep cranking out electricity. That’s helped keep the lights on, for now, but the short-term focus is putting even more stress on a system that’s already stretched near the limit.

Twice in the past week, officials have called on Texans to limit electricity use during scorching afternoons as demand inched perilously close to overwhelming supply. Now, there are growing concerns over how long power plants can maintain the grueling pace as they run nonstop, according to Michele Richmond, executive director of Texas Competitive Power Advocates, a generator industry group.

“Things are going to break,” she said. “We have an aging fleet that’s being run harder than it’s ever been run.”

To meet the surge in power demand, Ercot, the grid operator, is leaning heavily on a mechanism called reliability unit commitments to ensure there’s enough supply. Plants are being regularly ordered to go into service, or remain in operation, and skip any scheduled maintenance. The measure also overrides shutdowns for economic factors or any other issues. And Ercot is using the rule more than ever before as the state battles bout after bout of extreme weather.

The Electric Reliability Council of Texas, as the operator is formally known, called for 2,890 hours of RUCs system-wide in the first half of this year. That’s more than triple the 801 hours in the first half of 2021, according to data from Ercot’s independent market monitor provided by Richmond. For all of 2020, there were 224 RUC hours.

The problem is that deferring repairs now will likely come back to haunt power-plant owners, Richmond said.

“If you put off preventative maintenance because it’s needed for reliability, it increases the chances you’ll need a more comprehensive outage” later on as plants start to malfunction, she said.

Growing Population, Crypto

The situation underscores that the Texas grid is relying on short-term solutions for what’s poised to be a long-term problem. The state is contending with a population boom that’s driven demand higher. Crypto mining has also taken off in the past year, bringing with it the industry’s power-intensive operations. Meanwhile climate change has made extreme weather events that drive up electricity use more likely to occur and more severe — creating situations like a deadly February 2021 freeze that caused blackouts across the state.

Brad Jones, Ercot’s interim chief executive officer, is aware he’s walking a fine line. On one hand, there have been six times in the past year that using RUCs have enabled the operator to avoid declaring grid emergencies. Or as Peter Lake, chairman of the Public Utility Commission of Texas, said at a June 22 hearing: Six times when the grid otherwise would’ve been “on the brink of rolling blackouts.”

However, Jones says he knows that forcing plants to stay in service is raising the risk of breakdowns. For example, a key concern at this time of year is boiler-tube leaks, especially at older plants. These leaks don’t always mean a plant must shut down immediately, but if they’re not closely monitored they can lead to bigger, more costly repairs.

“Typically, a generator can run for a while with the water leaking,” Jones said in an interview. “The question is, how long is that.”

The grid operator is in constant contact with generators and works to give them time to make needed repairs when conditions allow, Jones said. Ultimately, the state needs more power plants, and regulators are working on ways to make that happen, he said.

Ercot and other operators are facing dual challenges, said Michael Webber, an energy-resources professor at the University of Texas at Austin. Most companies schedule maintenance during the spring and fall, when the weather is mild and power use is typically lower.

But climate change means these windows of temperate weather are getting shorter. This year, for instance, an early May heat wave forced some generators to skip tune-ups. And periods of high heat are also lasting longer, putting more stress on power plants that are running all-out for weeks at a time.

Maintenance for power plants — especially older ones — can be time consuming and complicated, said Webber, who also serves as chief technology officer of Energy Impact Partners, a clean tech venture fund

“You kind of have to dismantle the plant,” he said. “It’s not something you can do in a couple of hours.”

All of this is exacerbated by the state’s aging fleet. The average age of coal-powered plants in Texas is about 50 years, and natural-gas plants average about 30 years.

“It’s kind of like humans — we need to rest and recover,” Webber said. “If we run full speed for a long time, we can collapse.”