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Amazon Warns Texas: Don't Pass Bill That Would Drive Up Wind Power Costs (arstechnica.com) 155

Posted by msmash from the tussle-continues dept.
Fallout from Texas' statewide power outages in February continues to spread. Today, the Texas House of Representatives is scheduled to debate a bill that would require power producers to bear the costs of services that help keep the electrical grid stable. From a report: If the bill passes, it would "unfairly shift the cost of ancillary electric services exclusively onto renewable generators rather than all the beneficiaries," according to a letter written by the Partnership for Renewable Energy Finance (PREF), an industry group, and signed by Amazon, Berkshire Hathaway Energy, Goldman Sachs, and a number of other firms. Amazon and other big tech firms have invested heavily in renewable power, seeking to spruce up their images while cutting their power bills. Costs for wind and solar have dropped precipitously in recent years, making investments in wind farms and solar plants attractive to power-hungry data center operators like Amazon, Facebook, and Google.

"It is important to note that these changes neither enhance electric reliability nor lower consumer costs," the letter states. "They appear to be premised on the assumption that renewable energy was disproportionately responsible for the state's February power outages, a thesis that has been unequivocally discredited." The bill would require the grid operator, the Electric Reliability Council of Texas (ERCOT), to "directly assign" ancillary service costs to wind and solar power, specifically. The PREF letter counters that not only do all generators utilize ancillary services, but costs for those services have remained flat over the last decade while wind and solar have grown by more than 250 percent.
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Amazon Warns Texas: Don't Pass Bill That Would Drive Up Wind Power Costs More

Amazon Warns Texas: Don't Pass Bill That Would Drive Up Wind Power Costs

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  • typical (Score:5, Insightful)

    by nomadic ( 141991 ) <<nomadicworld> <at> <gmail.com>> on Thursday April 08, 2021 @02:30PM (#61252292) Homepage

    All the right wing "free market" places are trying to stack the deck. Similar thing happening in West Virginia, where the state is trying to force power plants to use more coal.

    • Re: (Score:1, Insightful)

      by saloomy ( 2817221 )
      No, I dont think this is that. The energy companies produce power, and grid has to be maintained. It doesnt sound reasonable to me that some producers of energy bear that cost and others dont. There should be a "grid maintenance fee" for the amount of energy you sell as a generator. That way, people are incentivized to produce their own energy and consume in locally. If you have a giant datacenter, put solar on it and throw some wind turbines up as well. Consuming the power locally improves efficiency, as t

      • Re:typical (Score:5, Informative)

        by Moryath ( 553296 ) on Thursday April 08, 2021 @03:03PM (#61252400)
        You're 100% wrong. This bill is designed to shift extra costs onto the renewable producers, essentially subsidizing the fossil fuels companies. Of course, Texas "electric regulation" is all flim-flammery anyways, their "deregulation" of the early 2000s just created a bunch of middle-man companies that do nothing but drive costs upwards for consumers. [thehill.com]

        • What happened to mega-billion$ corporations needing to pay their fair share and all that noise we usually hear whenever a story about Amazon, Berkshire Hathaway, Goldman Sachs, et al attempt to avoid paying their "fair share" like this? Suddenly you support them shifting more burden to low-income taxpayers?

        • Re: (Score:3)

          by fermion ( 181285 )
          The linked articles has nothing to do with this bills. It is WSJ saying that electricity is too expensive, which honestly I donâ(TM)t believe it is, if you are on a fixed plan. In fact the article speaks exactly to what I was saying, and the bills end. Allowing a variable rate, which is why people had $10,000 bills, is why companies like Amazon can book $28 billion in extra revenue.

      • Re: (Score:2)

        by AmiMoJo ( 196126 )

        In the case of Texas though the costs are higher because some companies lobbied to prevent the grid being connected to other states.

        • Re: (Score:2)

          by fermion ( 181285 )
          The local grid is a blessing and a curse. California and New York are well connected, and both had had their share of failures, much more than Texas. There is a good plan to build a power plant and superconducting interconnect, for instance, in the Texas, New Mexico, Colorado area, but this is going to require a faith in the future that does not yet exists.

          • Re:typical (Score:4, Informative)

            by crunchygranola ( 1954152 ) on Thursday April 08, 2021 @04:31PM (#61252798)

            The local grid is a blessing and a curse. California and New York are well connected, and both had had their share of failures, much more than Texas.

            [Citation needed.]

            Texas had a smaller scale collapse similar to this one in 2014 [texastribune.org] in which "power plants owned by Texas’ largest electricity producer buckled under frigid temperatures. Its generators failed more than a dozen times in 12 hours, helping to bring the state’s electric grid to the brink of collapse. The incident was the second in three years for North Texas-based Luminant, whose equipment malfunctions during a more severe storm in 2011 resulted in a $750,000 fine from state energy regulators for failing to deliver promised power to the grid."

            The entire extent of problem in California in 2020 was isolated rolling blackouts on two days [latimes.com] which where "the first rolling blackouts in nearly 20 years" and "The rotating power outages didn’t last long and affected only a small fraction of the state’s 40 million people. Just under half a million homes and businesses lost power for as little as 15 minutes and as long as 2½ hours on Aug. 14, with another 321,000 utility customers going dark for anywhere from eight to 90 minutes the following evening."

            The ultimate reason for these short blackouts was the market signalling mechanism used by the deregulated private energy producers CALISO (Califonia Independent System Operators, legacy of Republican Gov. Pete Wilson from the 1990s) which caused them to fail to place orders for sufficient electricity for the next day over two days. There was plenty of power, they just didn't contract to buy it.

            And those rolling blackouts from 20 years ago were entirely due to Enron gaming Wilson's deregulated grid.

            So, no, California's grid has done very well, and has not had the severe repeated failures that Texas has seen.

        • Cost is not a function of interconnection to other power grids, Texas is not the only state with its own grid - check out Florida.

        • Yes, the current 'electrical market' in Texas was designed by (and for) Enron! [tcaptx.com]

          I mean... what could possibly go wrong?

      • Re: (Score:2)

        by XXongo ( 3986865 )

        No, I dont think this is that. The energy companies produce power, and grid has to be maintained. It doesnt sound reasonable to me that some producers of energy bear that cost and others dont. There should be a "grid maintenance fee" for the amount of energy you sell as a generator.

        That's true. But that's not this bill.

      • Re:typical (Score:4, Interesting)

        by DarkOx ( 621550 ) on Thursday April 08, 2021 @03:22PM (#61252472) Journal

        The problem is that does not stabilize the grid. Unless that data center is truly off grid and has its own batteries etc. What happens to the grid when that massive sink gets dumped on it because the weather turns bad the turbines are stopped they switch over to grid power?

        The obvious answer the grid operators should charge sources and sinks alike for uneven loading. It should not matter why the loading is uneven. Oh you only make aluminum 3 days a week - to bad rethink that or pay for the privilege of being able to massively increase your draw on Tuesday-Thursday while you idle the rest of the week. Oh your solar farm produces nothing 8 hours of the day - buy some batteries and smooth that out or pay extra for your unsteady grid use selling power.

        Oh a cold weather even shut down your non-winterized gas plant - to bad you pay the unplanned drop out fee.

        There is no need to consider the source or sink from the grid operators perspective, they should make some rules about loading, apply them to everyone and charge accordingly. If that happens to make some methods of generation non-economical to bad, that just means they were not really covering their costs.

        • Re: (Score:2)

          by Ichijo ( 607641 )

          The obvious answer the grid operators should charge sources and sinks alike for uneven loading.

          So you want to charge both the consumers and the producers? That should go over well.

      • Re: (Score:3, Insightful)

        by Frobnicator ( 565869 )

        No, I dont think this is that. The energy companies produce power, and grid has to be maintained. It doesnt sound reasonable to me that some producers of energy bear that cost and others dont. There should be a "grid maintenance fee" for the amount of energy you sell as a generator. ... IF I have misunderstood that dynamic, then I am wrong.

        You are wrong. Yes, what you described is how it probably SHOULD work, but you are wrong that that's what is ACTUALLY in the bill.

        The bill is surprisingly short, adding only a single sentence: Ancillary services costs incurred by the ERCOT independent system operator to address reliability issues arising from the operation of intermittent wind and solar resources must be directly assigned by the ERCOT independent system operator to those resources. [legiscan.com]

        Note that it ONLY modifies the costs of wind and solar

        • Re: (Score:1, Troll)

          by garyisabusyguy ( 732330 )

          >>A big part of the problem is a continued disinformation campaign that posits that wind and solar were the reason for the outages.

          reasons
          1. Fossil fuel industries are huge donors to republican PACs, look at the work of the Koch Brothers
          2. Republicans lie as easy as draw breath

          Of course their first tactic is to lie their way out of it, we need to end the gop now if we want to ever get sane government again

        • The only disinformation campaign here is yours chief. If the Biden administration had not explicitly refused to allow Texas' non-green sources to operate at normal capacity [energy.gov] they would have had more than enough power to withstand even the highest loads.

          • Re: (Score:2)

            by catprog ( 849688 )

            Your link says "authorizing specific electric generating units (resource list) located within the ERCOT area to operate at their maximum generation output levels " implying normally they would be allowed to genrate less.

            • Exactly. They've been deliberately crippled and only allowed to operate at 60% capacity. Had they been allowed to operate at normal capacity they could have covered 100% of the highest demand seen during the freeze with room to spare.

    • Re: (Score:3)

      by fermion ( 181285 )
      In fact Texas, as the energy capital is for the most part full on renewables. There is plenty of money and space to build more wind. If Amazon wants to rake its toys a go home because they canâ(TM)t charge consumers $10,000 when they are trying not to freeze, let them. Forget peeing in a bottle, Amazon is saying 50 deaths should have no impact on their profits.

      As I read it the bill is very anti business. Right now the average wholesale price is around $20 a megawatt hour but can go up to $9000. Thi

    • Re: (Score:2)

      by bored ( 40072 )

      Not really, the problem is that the wind has destabilized not just the engineering part of the grid but the financial aspects as well because there aren't any penalties for failing to provide power when its needed. The traditional sources are being financially squeezed by wind, but they are still the critical backbone of the system.

      What needs to happen is that the wind/solar is forced to merge with some other provider which can guarantee some amount of load following/base load. That not only forces the true

      • Re: (Score:2)

        by Rhipf ( 525263 )

        The real problem is that the traditional power generator weren't willing to spend some of their profits to winterize their systems after the big freeze in 2011. They were advised in 2011 to winterize but most of the operators didn't heed that warning.
        At the best of times renewables account for ~10% off Texas power generation. Even if you assume that every renewable energy generator stopped working during the freeze that wouldn't account for the massive power outages. Texas lost ~40% of their electrical gene

        • Re: (Score:2)

          by jabuzz ( 182671 )

          It's also worth noting that the operators of the wind turbines also didn't bother winterizing the wind turbines which is why they stopped working. Wind turbines in neighbouring states worked just fine, as well as those in the northern US and Canada where they experienced even colder conditions.

          • Re: (Score:2)

            by Rhipf ( 525263 )

            True but the wind turbines that stopped producing electricity were supplying far less to the grid than traditional electric generators that also stopped producing electricity. Even if the wind turbines had been the exact same ones used in the northern US and Canada there would still have been massive power outages due to the traditional generators failing.
            If the the traditional generator had been wintarized (like it was suggested after the 2011 freeze) the power outages would have been minimal even with the

      • Re: (Score:2)

        by shilly ( 142940 )

        Let's say you're right that: "NG plants getting away with not paying a CO2 tax, similarly the wind isn't paying for grid stability" -- I don't agree with the latter, but let's posit it for the moment. Do you really truly believe that these are equivalent costs? The costs of remediation for carbon intensity are several orders of magnitude in excess of the costs of unreliable grid power! And those costs stretch back *decades*.

    • Why shouldn't wind turbine owners be on the hook for winterizing their wind turbines?

      Are wind turbine owners willing to help lay for regulatory changes for every other power generator? Will they help pay for soot scrubbers for coal-fired plants? Help pay for required changes for natural gas plants?

      The simple, obvious thing everyone knows, in hindsight wind turbine owners should have paid for winter ideation upgrades when they installed the turbines, that was their choice, the retrofit is their responsibilit

      • You seem to have confused "wind turbines" for "turbines" throughout.

        It wasn't the wind turbines that weren't winterised and failed; it was the conventional turbines - the ones that run on fossil fuels - that couldn't produce during the cold temperatures.

        You're correct in every sense except that you're blaming the wind industry for the problems that are not in any way their fault. So your conclusion is the exact opposite of what the data supports.

        • There was failure of some wind turbines due to ice on the blades, the blades should be winterised with heating to stop the ice forming.
    • The problem is that wind and solar are much less predictable than fossil fuel and nuclear, so additional infrastructure and management is required to keep the grid stable. If that's part of the cost of wind and solar power it makes perfect sense to account for it.
  • Texas clearly needs to winterize its power system. Not sure it matters if the windmills do it, but if the gas plants need to. But power prices are highest during a winter storm so if you don't winterize you are missing out on the best prices of the year for an energy producer. If its not economically viable to winterize the windmills, then how economically viable are they in general? Its not like you can't winterize a windmill, there are plenty farther north.

    • Re: (Score:2)

      by PyRosf ( 874783 )
      And of course they won't do it, it's too profitable to NOT winterize the grid

    • Re:Bills for thee and not for me (Score:5, Interesting)

      by Firethorn ( 177587 ) on Thursday April 08, 2021 @02:45PM (#61252336) Homepage Journal

      You can definitely winterize windmills; we have them up in Alaska. Can't get all that much more "winter" than that, short of maybe Amundsen-Scott. As for economic viability - I'd tend to say that they should still be economically viable even winterized, but many projects start upon razer-thin assumptions anyways as far as viability goes.

      That said, I think this bill is looking to be an over-reaction to the storm, along with politicians not paying attention to the fact that like 10X as much non-renewable electricity generation froze as compared to renewable - in the aftermath I remember reading that wind actually had a BETTER uptime rate than the natural gas plants, many of which had critical components freeze.

      Making ANY power production plant pay for the anticipated ancillary needs - IE if your gas plant isn't winterized, expect to be charged more for ancillary to make up for your plant freezing occasional, would be the proper course of action. Just assigning it all, as the letters state, assuming their take on the law is accurate, to renewables is a bad idea.

      Another option I can think of would be to set up something like a 0.01 cent per kWh charge for "reliability services", which would subsidize things like grid storage to help cover in emergencies.

      • Re: (Score:2)

        by sfcat ( 872532 )

        Another option I can think of would be to set up something like a 0.01 cent per kWh charge for "reliability services", which would subsidize things like grid storage to help cover in emergencies.

        The wind folks would go crazy over that as they would be the ones paying (which would be fair, its for them but they won't see it that way). Also, its not nearly enough for something like grid storage. We don't even have the materials on Earth to make grid scale storage and even if we did, it would be very very expensive and 1cent per kWh wouldn't come close to paying for it. Perhaps it would be enough for some small frequency stabilization batteries though.

        • Prices per KW for wind energy is super low. The markets have effectively already priced in a discount for the lack of "reliability" of wind energy. Yet we still build more wind supply, because it is so helpful when the wind does blow. This makes the rest of the grid more complicated but it is still worth doing, because wind energy is so cheap. This attempt to shift costs further reads like shameless politics to me. (For all I know other games are at play too though, like renewable credits - though wind expa

        • Re: (Score:2)

          by sjames ( 1099 )

          It's NOT fair because wind was far from lone in failing. The coal plants and gas plants failed too (just like last time), so why don't they have to pay for shoring up the grid when they fail?

        • The wind folks would go crazy over that as they would be the ones paying (which would be fair, its for them but they won't see it that way).

          Actually, I was talking about charging the fee on ALL kWh sold, in order to build up enough money to subsidize for ALL outages. Which is why my idea before that was to charge on the basis of how likely your power generator is to go offline unexpectedly.

          If you want to avoid that charge, then build in reliability - such as, for your wind farm, having some grid storage, so you get paid for having grid storage, rather than charged for only having turbines that need to be worked around.

      • After literally freezing my buns off for a week, nothing is drastic. People DIED. People suffered enormously. Here is what I noticed as I checked ERCOT's web site sparingly as I had no way to charge my phone battery during the 105 hours I had no power. Wind was running at around 2GW output. If I look today, http://www.ercot.com/content/c... [ercot.com] wind has run 4-6GW and is supposed to peak around midnite at 17GW, And I looked at graphs and other data that shows 22GW is not uncommon. The problem is that gets genera

        • Here is what I noticed as I checked ERCOT's web site sparingly as I had no way to charge my phone battery during the 105 hours I had no power.

          Have you also checked out prices for solar chargers in the meantime?

          • I have grid tied panels that are useless when the power is out. I am kind of over solar. I will *never* get my money back. I was an early adopter and have been screwed by the algorithm change the power company uses for grid tied panels. I did however invest in two small inverter generators. I am not going to freeze to death next time. Austin skims about 10% off the power company's revenue, yes 10% when even greedy private firms usually skim 8, and hence has let tree trimming lapse. Fully 1/2 the time I was

            • I have grid tied panels that are useless when the power is out.

              Well, THAT is a facepalm right there.

        • After literally freezing my buns off for a week, nothing is drastic.

          Sure it is, if it doesn't solve or improve the problem, then it is too drastic. If there are reasonably less disruptive or expensive ways to do so, then it is too drastic.

          Keep in mind that I lived in Alaska for a while, in North Dakota before that. People freezing to death is a sad annual occurrence for me.

          As you point out, wind was around 1/10th of it's peak power output during the storm, but at its peak it's still only 22GW - when other generation sources are in the hundreds of GW. It wasn't really the

          • Peak demand record for texas is 75GW http://www.ercot.com/content/w... [ercot.com] So 22GW is a substantial fraction IF it is running at peak (23GW from the link) It was part of the problem when wind *could* have been providing 10X what it was and if it had been at peak production it would have added 20GW to the roughly 35GW texas was short those first two days. The nuke that went offline was around 1.2GW of production that was lost. The Nat gas plants were probably around 20GW of loss as well. I could never find a ref

            • The fix of adding a battery requires an electrician.

              Depends on your current setup, of course, and if you're in the city you might need to pull a permit.

              The problem being that while I feel comfortable designing a system, I don't know YOUR system, so I can't really get specific.

              And yes, I think it sucks that transfer switches are so bloody expensive. That said, a manual transfer switch should be doable for a couple hundred, though if you're not comfortable doing your own electrical work, it'll be a couple hundred more to have an electrician do it. It all dep

            • Oh, and on the 22GW - the trick is that that is fluke peak production, not expected, which would normally be closer to half that. Thus the point that Texas lost more GW of natural gas than the (un)expected drop in wind power.

      • Re: (Score:2)

        by catprog ( 849688 )

        It is not Amundsen-Scott but Mawson is an Australian antarctic station with a wind turbine.

    • If its not economically viable to winterize the windmills

      It is. Most of the world's wind farms do not bake in the Texan sun. Hell Finland and Sweden both have many wind farms well within the arctic circle.

  • Republican politicians disfavor renewables for obvious reasons, there's a financial incentive for the politicians to encourage continued development in fossil fuels but in terms of financial contributions to campaigns but also for their constituents since resource extraction industries are only viable in rural environments. At some point though this becomes anti-business as they attempt to stifle innovation. For a while, the economic cost of that is low as the technology was immature and more expensive than

    • Re: (Score:2)

      by nasch ( 598556 )

      Data centers also need very fat pipes connecting to the backbone. Does Alaska have that? I would think places like Anchorage and Fairbanks do but I don't know.

  • Require electric generation to have a stable supply for lower grid access prices. Not a 'tax' but an 'incentive' to not doom the power grid with their volatility. Let the supplier solve the problem that they are creating.

    • Re: (Score:2)

      by bored ( 40072 )

      Yah, this is close to another random idea I had, which is to just have a "produce power or else" threshold, which applies a massive tax to any provider that fails to provide their rated power when ERCOT puts out the notice.

      It would incentivize the wind to merge with or build some kind of baseload/load following infrastructure. Its basically pushing the externalization of variable power production back to the generators causing the problems. Same with a CO2 tax for NG+Coal.

    • Re: (Score:2)

      by Ichijo ( 607641 )

      Require electric generation to have a stable supply for lower grid access prices.

      Or instead of stabilizing supply, stabilize demand by allowing prices to rise when the electrical surplus decreases and lowering prices when the surplus increases. That's how eBay prevents too many people from winning the same auction, and how airlines prevent too many people from boarding the same plane.

      • Re: (Score:2)

        by nasch ( 598556 )

        It's also how you keep too many people from being able to afford power during a storm.

      • Re: (Score:2)

        by amorsen ( 7485 )

        You cannot stabilize the demand when the options are to run the electric heater or die. Dying happens now, paying $20k happens later. Everyone picks the not dying option.

        But yes, the communists always come out of the woodwork and demand that governments save them at such times. Check out this comment [twitter.com]:

        This is WRONG. No power company should get a windfall because of a natural disaster, and Texans shouldn’t get hammered by ridiculous rate increases for last week’s energy debacle.

        State and local regulators should act swiftly to prevent this injustice.

        Senator Ted Cruz (R-Cancún)

  • Well, maybe if they can no longer game the system, then yes.

  • Well Texas is way out ahead on wind power in the U.S. and has some of the least-expensive electricity prices in the world because of their market-based approach to oversight. Solar is now rapidly ramping up here also.

    However, one weakness to that system turned out to be that there was no financial incentive for producers to harden their infrastructure against severe cold spells. To be clear, it is not a technological limit, the same types (coal, wind, natural gas, nuclear) of generation which fell down he

  • mod me troll if you must, but I stand by that phrase.

    Amazon is correct, this is a transparent effort to shift blame to renewables when the actual cause was a failure to weatherize the grid so that they could save money (and pocket it for themselves) and an unwillingness to hook up to other girds (yes, it can be done even though Texas has differences) because if they did hook up to the other grids then the Fed would require them to weatherize in case one of their neighbors needed to rely on Texas (it's a

    • Re: (Score:2, Interesting)

      by inode_buddha ( 576844 )

      Republicans can't govern. So they use wedge issues, Southern Strategies, culture wars and misdirection to avoid being called out on their inability to function as effective administrators. They're good at what they do, but what they do is not governing.

      You could put the word "Democrats" in there instead of Republicans, and get the exact same result. Because it *is* the same. The elites have been using wedge issues since at least the 1930's to divide and conquer the common people, for fun and Profit (TM)

    • Re: (Score:3)

      by nasch ( 598556 )

      Could rigging the entire society in favor of the rich be considered governing?

  • This is for all power producers, not just renewable. I support the idea that people who profit off the power grid should pay to maintain the power grid (even though the cost is on the consumer ultimately).

  • > "They appear to be premised on the assumption that renewable energy was disproportionately responsible for the state's February power outages, a thesis that has been unequivocally discredited."

    This was an early media claim based on a misunderstood statistic, but the Ercot post-mortem proved the opposite. When the emergency started, a majority of the wind power was offline, and all other sources were at maybe 20% offline. Because of that, the frequency started to drop and put the grid under strain. As t

  • Probably the oddest thing I learned, having lived thru the event... Is how utterly helpless most of you really are. I'm not kidding... Most humans can barely fix a few items in their house under the best of circumstances. The old Boy Scout motto "be prepared"... Clearly lost on 95% of you.

    I was mostly without power for 4 days, in an all electric house of recent construction. We managed to get 90 minutes of electricity every 30 hours or so. I do not own a generator. None of my cell phones died. None of

    • While I mostly agree with you and also have camping gear, many people do not go camping and more importantly do not have a "house" that has the room for so many extra emergency supplies that are so rarely used. People in apartments, condos, and other smaller or higher density simply do not have the space.

  • ok then INSTALL AC in the warehouse with lower power rate $15/hr does not = you need to work in the hot box at uncle Bezos's cabin

  • The cost of ALL electricity is going to go up in Texas when new measures are required to provide backup for wind and solar power generation.

    This is simple Economics: The current level of reliability is not adequate for the more extreme conditions, and statistical judgements made in the past are apparently outdated. Higher reliability = higher costs, and those costs get passed on to consumers.

    Consumers of wind- and solar-generated electricity have been getting a free ride due to subsidies, so the suppliers h

  • So if you have your own solar panels - and you are "grid-tied" as most people are... Then your excess generating capacity is fed to the utility company to pay down your bills, So now you're a renewable energy provider...do you become liable to under this law?

  • Amazon is coming face to face with the costs of virtue signalling.

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