Texas-style energy outages, huge payments will not occur in Nevada – Las Vegas Assessment-Journal

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In August, a western US heat wave resulted in blackouts in California and raised electricity concerns in Nevada. But nothing as drastic as California's Silver State dilemma.

At the other end of the calendar, after the mid-February winter storm that caused the power grid to collapse in Texas, energy watchers voiced a similar concern: Could a record cold shock disrupt electricity supplies across Nevada and kind of cut prices and deprive millions of the impotent Texans?

The short answer is “no” for reasons ranging from differences in the prevailing climate and types of equipment used to conflicting market and regulatory conditions in the two countries. Also at odds: Nevada's connections to the western’s larger regional power grid compared to Texas’s longstanding decision to work with a separate power grid to avoid federal regulation.

“The circumstances that in many ways led to the disaster in Texas are very unique in Texas and do not apply to Nevada,” said David Bobzien, director of governor Steve Sisolak's energy bureau.

“That said,” he added, “I think people who watch energy and electricity across the country need to look at the lessons of Texas and other places and understand that we are going to face these unique weather events and weather conditions.” with greater frequency in the future when we face climate change and we need to plan for it. “

The greater threat to Nevada comes from excessive heat and the associated fire hazard.

Nevada's Achilles' heel for electricity includes transmission line capacity as well as storage capacity to increase reliance on renewable energy sources. The projects now planned or ongoing deal with both questions in accordance with a mandate issued by the state and ratified twice by the electorate, according to which renewable energies should make up 50 percent of generation by 2030. Currently around 28 percent of the electricity comes from renewable sources.

As for Texas comparisons, here's a look at some of the reasons Nevada is different, starting with the weather.

Nevada knows cold

The extreme cold shock that Texas suffered was not unprecedented, but it was rare. Despite similar cold-related disruptions in 1989 and 2011, Texas’s unique energy landscape did little to encourage or oblige energy producers to take steps to hedge against future shocks. Equipment froze, especially the natural gas infrastructure, which provides 45 percent of Texan's energy. Renewable energies, mainly wind turbines, were initially blamed for failures, but this criticism was later withdrawn. The Texas Energy Regulatory Agency later said 13 percent of failures were due to wind turbine failures.

In Nevada, “we're used to more extreme weather,” said Doug Cannon. President and CEO of NV Energy. For both the cold in northern Nevada and the heat in southern Nevada: “We have prepared our generation fleet to be able to work in these hot and cold extremes, just because we see this in Nevada and have this operating experience.”

Cannon, who appeared before a state legislative committee Tuesday, opened his remarks, explaining how conditions in Nevada differed from those in Texas. Regarding the weather, the utility “operates its facilities in this broad climatic range,” he said in a follow-up interview with the review journal.

In Texas, “they generally operate in a pretty narrow base temperature range,” he added. “And I think these more extreme temperatures surprised many of these operators. They just weren't prepared and the plants weren't prepared for these extreme climates. “

Connected or Isolated?

Also unique to Texas, Cannon, and others, is its reliance on an independent and isolated power grid that is separate from regional eastern and western regional grids.

Texas has “made an island of its own, like Hawaii, without being in the middle of the ocean,” said Vijay Satyal, senior energy policy analyst at Western Resource Advocates, which promotes renewable and clean energy.

Although it has the largest wind energy production of any state, Satyal says the Texan model is not an incentive for energy producers to “keep up with their equipment”, for example by wintering. Texas experienced the “perfect storm of the perfect storms” with high winter demand and dependence on energy sources that were not protected from extreme cold. And unlike Nevada, Texas has not been able to develop a larger interstate power grid.

“It couldn't just share resources,” said Satyal. The larger western US network has “a good sharing of resources,” he said, including a contingency allocation program and outage coordination procedures distributed among utilities in the west.

“In the west, and NV Energy is part of that, it is called the energy imbalance market,” Satyal said. “In energy trading, it helps prevent an imbalance between companies that may have excess energy. It does it in real time within an hour. “

Regulation vs. Deregulation

The Texas energy market is deregulated and relies on market forces to set prices and drive investment. Bobzien believes that the system “simply did not provide the incentive to have this long-term perspective to make investment decisions that protect against the extreme weather events that we will see more and more frequently with the changing climate.”

The model has been cited as causing short-term price spikes of more than 10,000 percent in the state while power outages were worst.

Nevada voters rejected a competitive energy market for the state by more than 2 to 1 in 2018. NV Energy spent more than $ 60 million lobbying against the move.

Cannon said Nevada's regulatory structure, overseen by the Public Utilities Commission, would prevent the Texas-style energy collapse and the resulting price spikes. The PUC also sets the supply requirements for long-term resource planning, decides on infrastructure investments, and reviews “all of our costs,” he said.

“Indeed, Texas was held up as a role model for what we should implement in Nevada,” said Cannon. “In a regulated marketplace, there are many consumer protections in place to ensure that # 1 reliability and # 2 cost are properly controlled and maintained at an appropriate level.”

The role of renewable energies

Renewable energy sources now account for around 28 percent of electricity generation in Nevada. In Texas, it's 26 percent, according to the Federal Energy Information Administration. While Texas is the largest energy producing and consuming state in the country, Nevada is a fraction of the size and ranks 37th in total energy consumption. 85 percent of its energy will be produced outside the state in 2019.

In 2019, Nevada ranked second after California for geothermal power generation and fourth for utility-scale power generation from solar energy. Almost two-thirds of Nevada's state power generation comes from natural gas. In Texas it's 45 percent, and another 19 percent in coal-fired power plants.

Renewable energies thus make up a minority share of energy generation in both countries and play a lesser role in energy shortages. Even the most vigorous renewable energy proponents recognize the need to continue to rely on energy sources such as natural gas in the transition to cleaner fuels.

The long-term challenge for Nevada arises from excessive heat rather than extreme cold. As the state pursues its renewable energy goals, it is increasingly about transmission and storage, especially solar energy, which is collected in daylight but is most needed later in the day.

“Our bigger risk in Nevada is certainly the summer heat. And the bigger risk we face is our relationship with the wider western energy grid, ”Cannon said, referring to the August heat wave. “When record temperatures hit the entire west, the electricity markets, from which we traditionally obtain energy, become increasingly narrow. And really, what could happen there is that you are suffering from energy shortages across the west. “

NV Energy has 2,600 megawatts of new power generation under construction, including nearly 1,000 megawatts of battery storage. The proposed $ 2.5 billion Greenlink project to expand the Greenlink transmission line, pending regulatory approval, would expand state connections to renewable energy sources for utility customers, but would also benefit the larger interstate power grid.

“We are seeing rapid development in storage technology and this is where the real value of renewable resources is really going to increase,” said Bobzien. “Ultimately, this is an economic opportunity for the state as we help other states achieve their clean energy goals while meeting our goals.”

Contact Capital Bureau reporter Bill Dentzer at bdentzer@reviewjournal.com. Follow @DentzerNews on Twitter. ;;


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