ERCOT Watchdog Steps Down // EPA Cedes Ground on Power Plant Rules
Welcome to Grid Brief! Here’s what we’re looking at today: an ERCOT market monitor steps down, the EPA back peddles on its harsh new emissions rules, and more.
ERCOT Watchdog Steps Down
Carrie Bivens, who helmed a watchdog team for the Electric Reliability Council of Texas’ wholesale power market, resigned last week. Her resignation followed a dispute with ERCOT officials about potential alterations to the ERCOT market monitor’s structure and autonomy.
“Bivens resigned her position as director of Potomac Economic’s eight-person Independent Market Monitor, or IMM, for ERCOT ‘to pursue other opportunities,’ the firm confirmed Friday. Potomac Economics provides market monitoring, analysis and other services to the electricity and natural gas industries.” reports Utility Dive. “Bivens was critical of changes to ERCOT’s market operations and in a September report said an increase in reserve procurements likely raised real-time market energy value by approximately $8 billion over the summer.”
Bivens resignation comes after Texas approved massive spending to bolster reliability. Last week, the Texas legislature passed a constitutional amendment that authorizes a new Texas Energy Fund to offer low-interest loans for natural gas plants, microgrids, and grid modernization. The amendment passed by two-thirds and endows the TEF with $10 billion. Proponents of the bill argue these loans will help achieve greater reliability, but questions remain about the PUCT’s competency to assess default risk. Others decry the funding for helping the fossil fuel industry.
EPA Cedes Ground on Power Plant Rules
Earlier this year, the Environmental Protection Agency unveiled new rules for power plant emissions that sent power companies and grid operators into a frenzy. The rules were so drastic that they threatened the reliability of the bulk power system by essentially forcing natural gas and coal off the grid. This week, the EPA has conceded that it may need to rework its new emissions mandates in light of potential grid reliability issues.
In devising the emissions crackdown, the EPA relied on fanciful calculations on the viability of green hydrogen production and consumption as a replacement for natural gas—among other problems. Earlier this year, we ran an analysis by Isaac Orr and Mitch Rolling that indicated how devastating the new rules would be for the Midcontinent Independent System Operator.
During the Federal Energy Regulatory Commission’s reliability conference this week, the EPA said that it would work with the North American Electric Reliability Corp. and grid operators to ensure the new rules do not fragilize the grid. The top of mind concerns at the conference, according to Utility Dive, were “compliance timelines and what happens if carbon capture and hydrogen technologies aren’t available to meet them as well as the need for more details on options states could use to develop plans for meeting the proposal’s requirements.”
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Chevron resumed its natural gas supplies from Israel’s Tamar field on Monday. “The Tamar field, a major source of gas for Israel's power generators, is expected to reach full capacity within a few days, industry sources said. Around 20% of the gas from the field typically goes to neighbouring Egypt and Jordan,” reports Reuters. “Israel's Energy Ministry had ordered a state of emergency for the sector and instructed Chevron to shut the field after the Oct. 7 attack by Hamas on Israeli territory, which sparked a conflict in the Gaza Strip and other parts of the region. The platform, which can been seen from the northern Gaza Strip on a clear day, is within range of rocket fire. It is located about 25 km (15.5 miles) from the city of Ashdod along Israel's southern Mediterranean coast.”
The EU agreed to move away from its dependence on China for minerals. “Negotiators for EU governments and lawmakers reached a deal on Monday on targets for domestic supply of critical minerals such as lithium and nickel to reduce its reliance on third countries, principally China,” reports Reuters. “The European Commission proposed the Critical Raw Materials Act in March, a centrepiece of EU strategy to allow it to compete with the United States and China in making clean tech products. The proposal said the European Union should extract 10%, recycle 15% and process 40% of its annual needs by 2030 for 16 ‘strategic raw materials’. The European Parliament and the Council, the grouping of EU governments, needed to agree on a common text. They did this on Monday, parties from both sides said, paving the way for the law to enter force in early 2024.”
North American LNG export capacity looks to double through 2027. “We expect North America’s liquefied natural gas (LNG) export capacity to expand to 24.3 billion cubic feet per day (Bcf/d) from 11.4 Bcf/d today as Mexico and Canada place their first LNG export terminals into service and the United States adds to its existing LNG capacity,” reports the Energy Information Administration. “By the end of 2027, we estimate LNG export capacity will grow by 1.1 Bcf/d in Mexico, 2.1 Bcf/d in Canada, and 9.7 Bcf/d in the United States from a total of 10 new projects across the three countries.”
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