FERC Approves Cold Weather Standards

The Federal Energy Regulatory Commission has approved two new cold weather preparedness standards.

The first standard deals with emergency emergency operations. “FERC said it will improve how transmission operators account for the overlap of manual load shed and automatic load shed in their emergency operating plans while addressing the need to minimize the use of manual load shed that could make emergencies worse and threaten system reliability,” reports Utility Dive.

The second standard addresses cold weather preparedness and emergency operations. The standard demands that generator operators develop improved cold weather preparedness plans, conduct annual preparedness training, establish freeze protection measures, and “implement corrective action plans to address freezing issues.”

“We believe that these measures begin to address many of the issues identified as contributing to generating unit failures during extreme cold weather conditions,” FERC said.

The North American Electricity Reliability Corp (NERC) proposed these standards in response to 2021’s Winter Storm Uri, which saw 4.5 million customers without power and hundreds dead. Despite some concerns with undefined terms, broad limitations and exceptions, FERC approved the standards and ordered NERC to address these deficits within a year.

The new standards have arrived just two months after Winter Storm Elliott rocked the Midwest and East Coast grids over the Christmas. “The Midcontinent Independent System Operator reported it had 50,000 MW in unplanned power plant outages during the late-December cold snap. About 45,950 MW, or 23% of PJM’s generating fleet, was unexpectedly offline on Dec. 24 while ISO New England had about 2,275 MW in unplanned outages that day,” reports Utility Dive.

Chinese Renewables Hit Roadblocks

Renewables in China are running into the same problems they are in America: land access and grid connection.

Large-scale solar and wind power projects are competing with agriculture for land and to install solar panels and wind turbines, according to the National Energy Administration. Although China's wind and solar power output has surged in recent years, it still needs policy support to clear these hurdles.

“Beijing has spearheaded an ambitious drive to increase the country's renewable energy capacity in recent years and renewables now account for 31.3% of the country's total power supply capacity,” reports Reuters. “Last year, China installed 152 gigawatts (GW) of renewable capacity, or 76.2% of all new energy capacity, the National Energy Administration (NEA) said on Monday.”

Despite the obstacles, China is speeding up its rollout of solar and wind capacity additions, and it is likely to hit its 2030 renewable energy target earlier than expected.

Biden Re-Ups Renewable Tax Credits

The Biden administration is restarting a tax credit program for clean energy equipment manufacturers now that the Inflation Reduction Act has given it a $10 billion infusion.

The so-called "advanced energy" tax credit program gives a 30% tax credit for a variety of clean technologies, including solar panels, wind turbines, fuel cells, and equipment that reduces industrial emissions. Clean energy projects that expand domestic manufacturing, reduce greenhouse gas emissions, or support a domestic supply chain for critical minerals can apply for the program at the end of May. Of the $4 billion in initial funding, $1.6 billion is set aside for projects near shuttered coal mines and coal plants.

The gravy train doesn’t stop there. “In addition, the Treasury Department announced it is establishing an Inflation Reduction Act program to provide up to 20% in an additional bonus tax credit for wind and solar projects located in low-income communities that could increase the total value of the incentive to as much as 50% of the project’s cost,” reports Bloomberg.

Like what you’re reading? Click the button to get Grid Brief right in your inbox!

 Conversation Starters

1. The EDF’s new UK nuclear plant just went up in price. “EDF's new nuclear plant in southwest England is likely to cost about 2% more than its last budget estimate as inflation propels the price tag to almost 33 billion pounds ($40 billion), EDF documents show. Britain plans to build new nuclear plants to boost its energy security and help meet a target for net zero emissions by 2050,” reports Reuters. “EDF warned in a results presentation on Friday the cost of the Hinkley Point C project, Britain's first new nuclear plant in more than two decades, ‘could reach 32.7 billion pounds’ based on inflation indexes as of June 30, 2022. Its previously published cost estimate in May 2022 was 31-32 billion euros when adjusted for inflation.”

2. The IEA is warning of a potential natural gas shortage next year. “Tight production capacity for liquefied natural gas could lead to shortages next winter, the head of the International Energy Agency, Fatih Birol, has warned,” reports Oilprice.com. “As gas demand from China begins to recover, competition for LNG supply will increase, creating the risk of shortages, Birol told Reuters on the sidelines of the Munich Security Conference. The head of the IEA praised European governments for making ‘many correct decisions’ last year to secure supply, including the construction of more LNG import terminals. He noted, however, that the mild winter had been a stroke of luck for Europe, combined with the demand drop in China amid last year’s lockdowns.”

3. Russia hit drilling records even while sanctioned. “Russian companies did the most drilling at their oil fields in more than a decade last year, with little sign that international sanctions or the departure of some major Western firms directly harmed so-called upstream operations,” reports Bloomberg. “This helps to explain how the country’s oil production rebounded in the second half of 2022 even as further restrictions were imposed on its exports.”

Enron After All

I’ve written a sustained treatment of Enron’s impact on American energy for American Affairs. I detail its physical, regulatory, and cultural contributions to our current energy paradigm. In researching, I uncovered fascinating developments in environmentalism, including the tight alliance between the Natural Resources Defense Council and Enron. The company altered our grid and its energy mix, and, in its aftermath, helped spark the shale revolution. We live in the house Enron helped to build—and now we might need to start looking for exits. You can read it here:

Crom’s Blessing