Aramco CEO: The Crisis Began a Decade Ago // Tripping the Grid

Aramco CEO: The Crisis Began a Decade Ago

How did we get into this energy mess? Many blame the Ukraine war and Putin. Amin Nasser, the CEO of Aramco, sees it differently. "When historians reflect on this crisis, they will see that the warning signs in global energy policies were flashing red for almost a decade," Nasser said at a Schlumberger forum held this week.

What was the warning? That if oil and gas investment continued to drop, supply would lag, and we would end up where we are now.

"In fact," said Nasser, "oil and gas investments crashed by more than 50% between 2014 and last year, from $700 billion to a little over $300 billion. The increases this year are too little, too late, too short-term."

People were overly optimistic about the so-called energy transition and failed to formulate contingency plans. Now the Ukraine war has exposed the frailty of hubris (or naivete, depending on you look at it). "Instead, as this crisis has shown," Nasser said, "the plan was just a chain of sandcastles that waves of reality have washed away." And even if the Ukraine war came to a close the energy crisis would continue.

Can we change course? Nasser believes we can as long as we can agree on three "pillars":

• Recognition by policy makers and other stakeholders that supplies of ample and affordable conventional energy are still required over the long term;

• Further reductions in the carbon footprint of conventional energy, and greater efficiency of energy use, with technology enabling both;

• And new, lower carbon energy, steadily complementing proven conventional sources.

Nasser claims Aramco is already addressing these. But Aramco and OPEC+ can't save the world. Other nations will have to supply what energy they can to themselves and the global market.

But Nasser sees hope in a more sensible plan anchored in his principles.

"The new plan will not be perfect. In life, nothing ever is. But that is how we deliver a more secure and more sustainable energy future, with our industry still at its heart. That is how we can ease people’s pain."

"And that is how spring will come again," he concluded.

Tripping the Grid

Why do solar farms keep switching off for seemingly no reason? In Texas last May, 13% of the state's solar tripped off in the blink of an eye. The event spanned about 500 miles. This wasn't an isolated incident but a repeat occurrence that highlights one of the many challenges facing the transition to a renewables-heavy grid.

So-called "tripping" incidents "have been tied to the inverters that convert electricity generated by solar, wind and battery storage systems to the power used on the grid. Conventional generators — fossil fuel power plants, nuclear plants and hydropower dams — don’t require inverters, since they generate power differently," reports E&E news.

Inverters convert Direct Current (DC) to Alternating Current (AC). DC can only travel short distances, but AC can move for miles and miles. At the dawn of the electric era, Thomas Edison swore by DC but was overtaken by Westinghouse when he put AC to work and allowed for electricity to travel great distances without losing much power on the transmission line.

PV solar generates electricity in DC (unlike wind turbines, which generate AC), which is a problem because they're built far away from where power is needed due to their land-use needs. Plus, most home appliances consume AC. So, inverters are programmed to switch from DC to AC in order to make the electricity from solar useful to us. But inverters are also programmed to trip off if there's an electrical fault, which strands the electricity solar farms generate.

"Faults can be caused by downed power lines, lightning or other, more common disturbances," explains E&E. "The response by inverter-based resources was meant to prevent equipment from getting damaged, and it initially had little consequence for the grid as a whole, since renewables at the time made up such a small portion of the grid."

But now that the share of renewables on the grid is booming tripping has become a problem. The North American Electric Reliability Corp., the Federal Energy Regulatory Commission, and the Department of Energy are putting their heads together to solve the problem.

But there's a tangle of interests between solar farm owners about what to do. Barry Mather, the chief engineer at the National Renewable Energy Laboratory, explained to E&E that there are "competing interests for different parties across the industry, said Mather of NREL. Because tripping can essentially be a defense mechanism for solar, wind or battery units that could be damaged by a fault, some power plant owners might be wary of policies that require them to ride through all faults."

And despite all the collaboration, Mather isn't optimistic about resolving the tripping issue. “The truth is, we’re not really making headway in terms of a solution,” he said. “We kind of fix things for one event, and then the next event happens pretty differently.”

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Conversation Starters

1. The EU has eased its coal sanctions against Russia. EU companies may now trade, ship, and finance Russian shipments to third countries. "Brussels says this is needed to avoid sanctions impacting 'energy security,'" writes Javier Blas. Climate goals are irrelevant in a crisis.

2. Millions in Britain are already suffering because of the energy crisis. While 21% of Britains are behind on their bills, "5.9 million people, or 11%, said they had gone without heating, electricity, or water in the past three months as a result of the rising cost of living," reports Oilprice.com. We're watching degrowth happen in real-time. The results are predictable--and tragic.

3. What really saved the California grid during the heatwave at the beginning of the month? Was it battery storage? Wind and solar working diurnally together to save the grid? No. It was natural gas. A new report from the EIA reveals what really keeps the light on in the Golden State when it matters most.

Crom's Blessing

Correction 9/23/22

The original version of this digest implied that wind farms suffered from the same tripping issue as solar farms. This is incorrect because wind turbines generate AC, not DC, and so do not need inverters. The section on tripping has been specified to clarify that.