Thread by @douglewinenergy

Tmrw, @PUCTX will hold an extraordinary work session w/ implications for all Texans w/in ERCOT and relevant broadly to folks who care about energy everywhere. They’re considering about 7-8 different market redesign proposals. Some context in this 🧵. #txlege #energytwitter 1/

First, a few absolutely critical big picture points: (1) no amount of market redesign will prevent winter outages if gas supply is not weatherized which, as far as anyone knows, it is not. #txenergy 2/
yahoo.com/now/texas-isn-…

Point (2): In Feb, our problem was not capacity. We entered Feb with 40+% extra capacity in ERCOT but 50-60% of it didn’t operate. If the PUC focuses on adding capacity, it’s solving the wrong problem. Need to focus on capacity that can operate in extremes
publicpower.org/policy/explana…

Building on the last point, (3) We need to define the terms dispatchable and intermittent better. All energy sources are intermittent but they’re all intermittent differently. Wind and solar vary on a daily basis. Thermal (gas/coal/nuke) vary seasonally. *All* vary in extremes 4/

In shoulder months, which are getting demonstrably hotter, we typically have 30-40% of the gas fleet offline, including today (28GW thermal offline today!)

Intermittent's definition is “not continuous.” There is no continuous energy source. Not yet anyway. #energytwitter 5/

(4) We need to treat summer and winter differently. These are completely different problems to solve. Climate change will drive summer peaks higher. Summer will have big ramping periods as solar grows; these can be solved mostly with #demandresponse and batteries. 6/

Winter is harder. There will be periods when thermals are our for maintenance or when things break & wind is low & the sun’s not up yet. We need, I think, *both* some kind of long duration backup (w/ a tech neutral standard) & a focus on lowering demand during those periods. 7/

(5) This process is... not ideal. The PUCT put out 23 questions & asked stakeholders to answer in 6 (!) days with a 15 pg limit. This is no way to redesign a $10b+ market.

And there have been exactly zero townhalls or other kinds of meetings to listen to the general public. 8/

Also on process: The PUC expects to adopt a framework for the market redesign next month but has *no estimates* of what the proposals they’re considering would cost Texans and Texas businesses. This seems… suboptimal. 9/
#txlege #txenergy

OK, a quick summary on two prominent proposals. First, a proposal by “ERCOT stakeholders” incl. 20+ signatories urges the PUC to address quick solutions to address this winter. These include eight “Phase 1” reliability actions the PUC could take 10/

ERCOT stakeholders note that PUC has already passed a robust weatherization rule and have many additional levers to pull in the short term. Massive market redesign needs study to avoid costs that don't increase reliability. #energytwitter
See slide 6: interchange.puc.texas.gov/Documents/5237…

The proposal getting the most attention is the Load Serving Entity Reliability Obligation (LSERO). This would require an administrative calculation of what each LSE needs to serve customers and a calc of what capacity factors each resource brings, then a certification... 12/

of whether each LSE can meet its obligation. To me, this looks a lot like a capacity market without calling it such (even requires 3yr forward). Several retailers (REPS) said it would make it harder for them to compete. The independent market monitor (IMM) shares those concerns.

In addition to LSERO and ERCOT stakeholders, the major proposals

*Vistra’s Strategic dispatchable standby reserve service
*NextEra’s Contingent Reserve Service
*LCRA’s Dispatchable Reliability Service
*TIEC’s Backup Reliability Service
*Potomac (IMM)’s Forward Hedge
14/

You can seee all the comments and proposals in the docket here interchange.puc.texas.gov/Documents/52373

I won't summarize all the others now but will add to this thread w/ more descriptions later on, esp if they get traction. Work session tmrw 9:30 here: texasadmin.com/tx/puct/

15/ End for now