Blacked Out Again?

Good morning! Here's what we're looking at today: US chip shortages, US eases Europe's energy crunch, coal cancels out renewables in Europe, Brussels weathers backlash for labeling nuclear and gas green, and Texas sees outages in colder weather.

Headlines

• Chip shortage leaves US companies dangerously low on semiconductors. (WSJ)

• Erdogan seals pact with Ukraine over trade and drones. (FT)

• Australia backs rare earths mine to reduce China's supply dominance. (FT)

• Islamic State leader killed by US special forces in Syria. (Guardian)

• Panasonic to start production of Tesla-championed 4680 batteries. (JT)

Fossil

• Major blow for UK as Norway's gas lifeline delayed: 'Were counting on it.' (Express)

• OPEC and allies agree further gradual increase in oil production. (FT)

• IMF cut critical coal language from Japan statement. (JT)

• Natural gas shipments, mostly from US, ease Europe's energy crunch. (NYT)

• U.S. senators urge the Biden administration to “take swift action to limit U.S. natural gas exports." (@JavierBlas)

Renewables

• Georgia Power plans to double renewables, ditch all coal. (E&E)

• Overwhelmed by solar projects, the nation's largest grid operator seeks a two-year pause on approvals. (ICN)

• EU wind and solar not enough to limit global warming as coal use remains stubborn. (FT)

• Appeals court decision opens door to due public power utilities for rooftop solar fees under antitrust law. (UD)

• India targets domestic production with 40% duty, boost to manufacturing-linked incentive. (PVM)

Nuclear

• Brussels weathers backlash over calling gas and nuclear sustainable. (IBT)

• Bruce Power, NII sign onto fusion power offer. (TST)

• Second reactor vessel arrives at Akkuyu. (WNN)

• Fight over Africa's sole nuclear plant entangles Mantashe. (BBG)

• Exelon split complete; Constellation launched. (ANS)

Grid

• New era for NextEra: a utility spotlight. (POWER)

• SPP, MISO identify 7 cross-seam transmission projects that could unlock up to 53 GW of new generation. (UD)

• Hydropower has critical role stabilizing Western Interconnection during extreme conditions. (UD)

• Winter storm leaves thousands without power in Texas, parts of South. (WSJ)

• California ISO releases first ever 20-year transmission outlook. (CAISO)

Blacked Out Again?

I got the news that Texas was having heavy weather and texted my dad, who lives in Alpine. I wanted to know if his lights were still on. "Governor Abbott said there won't be blackouts, and now we're hearing there might be blackouts." Last year about this time, I texted him asking the same question and got back a photo of him trying to heat soup on top of a coffee can he'd filled with tealights. Like the Texas grid, it didn't work. That was during the Uri storm in which 11 million Texans were left without power and as many as seven hundred died. As of this writing, only 53,000 Texans have found themselves without power. Not too bad. Did the Lone Star state's grid operator, the Electric Reliability Council of Texas (ERCOT), save the grid?

Not quite. Last year, temperatures dropped below zero, whereas this year's cold snap has only sunk into the twenties so far. That, more than anything, is getting the grid by. But it's true that ERCOT spent a couple of million on winterization. About a third of that money went to the Brauntig plant. On Wednesday, the media got a look at what "winterization" meant. Here's how that went:

Plus, ERCOT has run into staffing problems and is still sorting through the legal wreckage in the wake of Uri. So this time around, they plain got lucky.

And, unfortunately for Texans, their grid is still fragile. Russell Gold recently published a long read in Texas Monthly on ERCOT's deeper problems. Tellingly, it's called, "The Texas Electric Grid Failure Was A Warm-Up." One of the core problems with Texas's grid is what Meredith Angwin calls "the fatal trifecta": too many renewables with an overreliance on both natural gas and imports. When the weather's the worst, as it was during Uri, renewables don't show up, demand rockets upwards, gas supplies get tight, and neighbors aren't inclined to share since bad weather doesn't respect state lines. The problem isn't entirely accidental. A recent report on what happened during Uri put it this way: ERCOT "rewards volatility over reliability." While all those Texans were freezing, the gas industry racked up around $11 billion in profits. 

But Texas isn't alone. The electricity wholesale markets that emerged out of the regional power pools at the end of the 20th century are all experiencing this problem, with California as the poster child of dysfunction (lucky again, ERCOT!). Some might not be inclined to demand reliability as that might "interfere" with the "market." Well, I say someone had better interfere and interfere quick because if Uri was just a warm-up I'd hate to see what game time looks like. 

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