Thursday, April 3, 2014

Wind records and other Texas troubles

Why Shale Gas Is Toast: Texas Wind Power Sets New US Record is a provocative headline from a site I consider disreputable - Clean Technica.
Texas set a new US record for wind power generation last week, and the surge in output demonstrates how quickly the US domestic energy landscape is shifting. Just a few years ago, word was that shale formations in North America held enough natural gas reserves to last for decades. Today, shale drillers face a perfect storm of economic challenges, environmental headaches, and stiff competition from the wind sector and other forms of renewable energy.
In the context of surging renewable energy development, natural gas will become an expensive, marginalized fuel in the US domestic market, and Texas is a perfect example of how and why that will come about sooner rather than later.
Well, no.

Real reporting notes the record on March 26
From ERCOT wind integration report

In the Lone Star state, the wind industry hit a new record for generation. On the night of March 26, wind power surpassed 10,000 megawatts of generation, a new high, according to data from the Electric Reliability Council of Texas (ERCOT). That was enough to account for 29% of Texas’ 35,768 megawatts being generated that night.
29% being achievable because not only was generation from wind turbines high, but demand was low.

Good for Texas wind, but a record amount of wind capacity on an expanded transmission system (at not insignificant cost) is going to set records.  A more pertinent question is when will the records be set, and that it occurs during the low demands of a shoulder season is not good - particularly if the wind did not produce during peak demand periods.

And it really didn't.

ERCOT demand and wind at summer peak
ERCOT (the Electric Reliability Council of Texas) had issued a Conservation Alert as recently as March 3rd. Similar alerts were issued in January and in February.

Checking ERCOT's Wind Integration Reports for the period of each outage shows high demand accompanied by erratic, and occasionally very low, wind output.

ERCOT's summer demand peak is higher than its winter peak, and the wind output pattern often less erratic in the summer, which is not to imply it's stable.  Peak summer demand occurred on August 3rd, 2011 during a week that displayed typical Texas wind performance extraordinarily well - dropping as demand rises each day.

If gas is toast there will be people freezing in the winter and melting in the summer.

Gas is not toast, but gas generators - along with other generators with higher fuel and operating costs - are not performing well.

Energy Future Plan Said to Almost Wipe Out Owners KKR to TPG | Bloomberg Business week
KKR & Co., TPG Capital and Goldman Sachs Capital Partners, the firms that acquired Energy Future Holdings Corp. in the biggest-ever leveraged buyout, would be all but wiped out in a reorganization plan being discussed, said three people with direct knowledge of the negotiations.
The firms may accept as little as 1 percent of the equity in the company after it completes a Chapter 11 restructuring...
The power producer’s acquisition at the peak of the buyout boom in 2007 was essentially a bet, using $40.1 billion of debt and an $8.3 billion equity check, that natural gas prices would rise. Instead, prices have fallen 68 percent since July 2008. Gas prices set the cost of electricity in the Texas market.
Twice bitten: once by the falling price of natural gas (from a 2008 peak), and once by the addition of variable renewable energy systems (vRES) that are also crippling German utilities despite much higher gas prices in Europe.

Texas is left appealing for conservation - and struggling to find a method to make entering the market attractive to firm generators (with capacity available at peak demand periods).

How's that affecting the oil and gas industry?
It's not.

Eagle Ford drilling pushes number of oil rigs to record level | San Antonio Business Journal
The number of U.S. oil rigs spiked to a record high last week due to booming activity in South Texas’ Eagle Ford Shale and other domestic shale plays.

1 comment:

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