It may seem like an unseemly bit of crowing, but nuclear energy really did show its value during the polar vortex and subsequent winter deep freezes. We’ve talked about this in an ad hoc fashion, noting stories about the strain on the natural gas supply and even raising mild controversy about whether Beaver Valley shut down due to the cold – when in truth, it did shut down whatever the reason. Why split hairs?
But now there is a more systematic assessment of that period from the Federal Energy Regulatory Commission. FERC describes its role thusly: “[It is] an independent agency that regulates the interstate transmission of electricity, natural gas, and oil. FERC also reviews proposals to build liquefied natural gas terminals and interstate natural gas pipelines as well as licensing hydropower projects.” And there’s more! Read here for that. FERC’s authority over electricity transmission (and other of its activities) covers every manner of generator, so its work overlaps into the nuclear realm.
FERC’s assessment of the cold snap from the transmission perspective is therefore very interesting, despite it having no mention of nuclear energy at all. Here’s the takeaway:
Not many months ago staff described the market effects of the extraordinarily low natural gas prices. Staff does not expect the historic prices at the high end of the spectrum to become the norm. However, the range in prices has tested some of the market systems and procedures used by the RTOs [regional transmission organizations] and ISOs [independent system operators] and revealed difficulty in achieving efficient market results in stressed system conditions.
This could provide an opportunity to say mean things about natural gas, but why? It can take care of itself. The real key point is the argument for energy diversity, as both nuclear energy and wind (notably in Texas) were champs at keeping the heat on. Natural gas showed some definite strains.
Spot natural gas prices at major Northeast points broke all previous records during the January 22 event, propelled by more severe and widespread system constraints. At Transco Z6 Non-NY, prices spiked to $123/MMBtu, while prices at Transco Z6 NY and Transco Z5 reached $120/MMBtu. Those active in the natural gas spot market were at times exposed to these record high prices. Similarly, as discussed in detail later, customers purchasing in the RTO energy markets were exposed to dramatic price spikes driven by high natural gas prices.
FERC is fair, though. While learning that the transmission hubs were stressed past their breaking point is hair-raising, they didn’t break. If the past winter showed anything, it’s that it can still get mighty cold for extended periods and many people depend on natural gas for heating, diverting it from electricity generation use. A few warm winters forestalled this lesson, but now it can be considered learned.
During the cold weather events, the historically high peak demand combined with high levels of generation outages placed the regions near their capacity in meeting system demand. The RTOs and ISOs declared emergency conditions on several occasions and some implemented emergency procedures, including emergency demand response, voltage reduction, emergency energy purchases, and public appeals for conservation. They issued several maximum generation warnings and some maximum generation actions during the period. A maximum generation action means that all generation is to be made available and that generators may be asked to produce in the emergency range of their capacity, above normal operating limits.
That’s the hair-raising part. But this is worth stressing:
It is important to note that the RTOs and ISOs cut no firm load during this period.
Fair is fair, after all. Natural gas works require an ongoing flow of fuel while nuclear energy plants will run without issue until a refueling outage – and those don’t happen during the winter or summer months. FERC’s report is a positive nuclear story only by implication, but a very potent argument for energy diversity.
It’s more a coincidence than anything else, but Bisconti Associates just released a poll that showed Americans highly engaged with the issue of energy diversity:
The survey shows that a near-consensus 94 percent of Americans believe it is "important to maintain a diversity of energy sources to supply our nation's electricity;" 75 percent believe it is very important to do so.
"Americans approach electricity from a very practical standpoint, and energy diversity equates with energy reliability," said Ann Bisconti, president of Bisconti Research Inc. Her firm conducted the national survey of public opinion with Quest Global Research from March 6-21.
94 percent! That vortex – may it never return - did a lot of good by focusing attention on energy diversity. Let’s see what the industry does with – and how it responds to - this information.