Matt Hooper said:
Your posts have been interesting but for a layman such as I - hard to follow. Here is what I think you have said:
1. Wind energy production has been substantially reduced because of the cold temps.
2. This puts greater demand on remaining forms of generation. Gas, Coal, and STP (don't know what STP is).
3. ERCOT tripped all their Coal and STP production - Tripped as in used or off line? Either way - no longer on line.
4. This puts big pressure on the remaining gas generation production.
5. There are some price caps in place - as in people have signed contracts for the cost of their electricity that is now mismatched with current cost of production as current natural gas prices??? Not sure I got this right.
6. The EROC should have started shedding (dropping) load late last night (maybe 10 meg watts) and that would have prevented the much larger shedding that occurred later. Was this mis-management OR a play to save massive cash losses related to number 5 above?
7. If the EROC had shed load earlier, they would have been able to keep more people on line and recover customers quicker. But with the being upside down on the cost of power generation vs what power is being sold at this creates massive losses for multiple large parties.
8. This loss is exacerbated by parities that have short positions (edited) on the cost of natural gas and parities that have LOC's (letters if credit) with large electricity generators.
AS SUCH - shedding more customers for longer periods of time is a way of mitigating the economic losses.
Please correct me if my summary is off in multiple areas. No pride here - just trying to understand.
Somehow the Kinder pipeline fits in as well. If that fall short - then larger scale blackout?
I'll take a stab at some of these for you.
1) Yes
2) Yes -- South Texas Project, a large nuclear plant in Matagorda
3) My thoughts, and read my post above on the bottom of pg 14... Circuit breakers to protect plant equipment. I asked above if we know why they cant get them back online.
4) Yes
5) Yes, free market electricity is capped at $9000/MW. These are spot market prices, 15 minute intervals. Base load is bought and sold in futures and under longer contracts at lower prices. This is price you pay when you need a few extra MW. Fuel is also typically bought on long term contracts. They can get more on the spot market but it's tougher to come by. Also NG is legally bound to go to residential before it goes to industrial users. Residential is using more obviously right now. Then you get frozen equipment which reduces capacity. Ever had a propane camping stove stop working on a cold morning because the bottle of propane froze up? Similar stuff happens in natural gas handling infrastructure. This can go all the way back to the wellhead, well freezes up and the gas quits flowing out of the ground.
6) Gonna leave this for GoneMaroon
7) They would bring the customers back. Without users there is no reason to generate power at any price. We don't have grid storage. The high spot prices are because the power is needed. With capacaity and no need prices drop. Again most of their fuel is contractually purchased well in advance. There will still be some NG price issues with the peaking plants that may not have long term gas contracts in place.... But I can't see any of that affecting coal, nuclear, etc. I'm on the teetering edge of my knowledge here.
8) Not gonna attempt to touch that oen.
Anyone else care to chime in?