Below zero blackouts?

How diminished coal supplies and over-reliance on wind and solar could bring rolling energy blackouts to Minnesota in a harsh winter.

As we write in December, much of Europe and Asia are embroiled in what news outlets have deemed a “global energy crisis,” and energy prices are surging across America.

Gasoline prices, at $3.50 per gallon, are the highest they’ve been since the Obama administration. Home heating costs are also rising, with the price of natural gas and propane in Minnesota up 250 percent and 60 percent, respectively, over last year. Prices could rise further if we have a harsh winter.

Sadly, skyrocketing energy prices may not be the worst of it.

A recent presentation by the Midcontinent Independent Systems Operator (MISO), the organization that oversees the regional electric grid that Minnesota belongs to, suggests we could experience rolling blackouts this January because we may not have enough reliable power plants to meet demand. The likelihood of blackouts will increase if we experience a polar vortex like the one we experienced in February 2021.

It gets worse. Even if we have enough reliable power plant capacity on the regional grid, it doesn’t necessarily mean the plants will have enough fuel to make it through the winter. Many coal-fired power plants throughout the country are running low on coal supplies, and analysts project the US has enough natural gas for a normal winter, but a colder than normal winter could trigger blackouts.

It all makes for a white-knuckle winter for grid operators and power companies alike.

Why Blackouts Are Bad

For most people, blackouts are the last thing on their minds. They simply expect the lights to come on at the flip of a switch. But what happens when the power is out? The blackouts that affected Texas in February 2021 demonstrate the devastating consequences that occur when we take the reliability of the electric grid for granted.

A report from the Texas Comptroller’s Office concludes more than 20 million Texans, nearly 70 percent of the state’s population, lost power during the polar vortex, leaving them without heat or running water for extended periods of time in sub-freezing weather. In some cases the results were deadly.

At least 210 people died during the polar vortex, according to the report. The Texas Tribune reports that some died from hypothermia; others from carbon monoxide poisoning while trying to keep warm, either by sitting in their running cars inside garages, or by running grills indoors. Medically vulnerable Texans also died needlessly because they did not have access to lifesaving medical equipment or treatments.

In addition to loss of life, The Wall Street Journal reports the cost of property damage from bursting pipes and collapsing roofs will be north of $18 billion and the Dallas Federal Reserve estimates that the freeze and outage may have cost the Texas economy between $80 billion and $130 billion in direct and indirect economic losses.

Winter blackouts in Minnesota could entail even more severe consequences than in Texas because it is likely to be much colder. In Texas, temperatures were in the single digits for much of the polar vortex. In Minnesota, we’d consider that a warm week in January.

The devastating—and deadly—implications of blackouts give MISO’s warnings considerable urgency.

Potential Capacity Shortfalls

Minnesota belongs to MISO’s regional electric grid with 14 other states and the Canadian province of Manitoba. Electricity consumers use the electrons produced by the power plants on this large, shared grid.

It helps to think of the electric grid as a giant swimming pool. Each customer uses a small amount of water, and each power plant is like a water pump, helping to maintain the water level. Unfortunately, some of the “pumps” on the electric grid don’t work well during extreme weather events, which is one reason why we could experience blackouts this winter.

In late October, MISO representatives hosted a forum to discuss the readiness of the electric grid going into the winter. The presentation included graphs, displayed on the next page, showing the expected demand for electricity and the expected amount of power plant capacity online to meet that demand under two scenarios.

One scenario is called the “Probable Generation Capacity Scenario,” and the other is called the “Low Generation Capacity (High Outage) Scenario.” We’ll refer to them as the “Probable scenario” and the “Extreme scenario.”

We’ll try to simplify the industry lingo in the graphs.

The blue bars show the amount of “firm,” or reliable, power plant capacity available on the grid to meet the “load.” The term “load” indicates electricity demand. Each graph shows two scenarios for electricity demand with orange lines on the chart. One of the scenarios shows a “probable load,” and another with a “high load.”

Lastly, the green bars show the amount of “Load Modifying Resources,” or LMRs available to help meet electricity demand during emergency electricity shortage events. The phrase “Load Modifying Resource” denotes customers who have agreed to have their power reduced or shut off to avoid rolling blackouts in emergencies in exchange for reduced electricity prices. They include home heating units, manufacturers, and iron mines.

The most basic takeaway from the graphs is this: The blue bars and the green bars, added together, must be able to reach the orange demand lines. If they do not, rolling blackouts could be a possibility this January.

Things appear to be okay in January in the Probable scenario because there seems to be enough generation capacity (blue bar) to meet the probable load. However, LMRs (green bar) would be needed to meet electricity demand in the high load scenario – meaning utilities can only meet demand by turning off power to certain electricity users.

The Extreme scenario for January looks much more dire. It assumes a lower output from traditional coal, natural gas, and nuclear power plants. It also assumes lower-than-expected output from wind turbines because they cannot operate safely at -22°F and are shut down.

As a result, neither the blue bars nor the green bars will be enough to meet the probable demand, and MISO will be far short of meeting electricity demand in the high load scenario. In this situation, MISO would try to secure electricity imports from surrounding regional grids; if they aren’t available, it means blackouts.

“Phantom Firm” Capacity Resources

As if these graphs were not alarming enough, especially those in the Extreme scenario, there is also a potential problem with MISO’s accounting: they could be overestimating how much electricity will be generated by wind turbines when we need power the most, meaning capacity shortages may be even worse than MISO is suggesting.

The blue bars are supposed to show the amount of “firm” capacity on the grid, which is what MISO expects each energy source to reliably produce during peak electricity demand.

However, the blue bars count on some contribution from wind turbines for their “firm” power plant estimates, but wind generation is never really “firm.” Because wind is dependent upon the weather, the output from wind turbines could exceed MISO’s estimates, or the wind turbines could be producing significantly less.

That’s why we call wind turbines in MISO’s blue-bar calculations “phantom firm” resources. They exist on paper,
but they may or may not exist in real life when the chips are down. Grid operators in Texas also overestimated the amount of electricity wind turbines would produce during the polar vortex of 2021.

The results were historic blackouts.

Same Gamble, Different Grid

In the Probable scenario, MISO estimates wind turbines will produce about 17 percent of their potential output when electricity is needed most. However, MISO’s wind fleet fell far short of this estimate during several hours during the polar vortex of 2021. In fact, wind generation was nearly 4.5 times lower than anticipated at noon on February 19.

In Texas, the poor performance of wind generation in February 2021 contributed to the catastrophic blackouts. Grid operators at the Electric Reliability Council of Texas (ERCOT) expected wind turbines to produce about 24.6 percent of their potential output during a period of peak electricity demand. But at some points during the polar vortex, the wind turbines in ERCOT delivered just 2.6 percent of their potential output.

Many factors contributed to the blackouts in Texas, but ERCOT’s egregious miscalculation regarding wind performance was devastating. MISO should know better than to rely on wind facilities to keep the lights on as part of their planning process. When we pretend “renewables” are reliable, we all pay the price.

Coal Shortages Compound the Problems

MISO’s potential power plant capacity problem is compounded by the fact that many coal-fired power plants are running low on fuel, threatening to render one of the most reliable parts of the electric grid obsolete when we need electricity the most.

This is a huge problem because coal provided more than half of the electricity used during the 2021 polar vortex. Without coal, the coal-fired power plants MISO is depending on to generate electricity this winter will not be able to rise to the occasion.

The coal shortages we face stem from high demand and restricted supplies.

Natural gas prices have increased substantially compared to previous years because of low supplies, causing electric companies to burn more coal instead. Some analysts expected coal consumption to be 21 percent higher in 2021, compared to 2020.

While the demand for coal has increased, the supply has not. Years of policies designed to limit the consumption of coal and hamper coal production have resulted in falling mine outputs. Supply chain problems have also prevented coal companies from delivering more fuel to the power plants that want it. S&P Global estimates that pre-winter coal inventories are roughly 30 percent lower this season compared to last season.

Natural Gas Supplies Are Tight, Too

Natural gas also is also in short supply. The U.S. Energy Information Administration (EIA) estimates that natural gas inventories are 4.5 percent lower in the Midwest this year than they were last year, and supplies are 7.8 percent lower, nationally.

Low natural gas supplies are a dual threat to Minnesota’s energy system because we use natural gas for home heating and generating electricity.

EIA data show 66 percent of Minnesotans heat their homes with natural gas. In total, 29 percent of the natural gas used in our state is used for home heating and 18 percent is used for electricity generation. When the price of natural gas increases, both end-uses get more expensive. If we have supply shortages, both will be affected.

James Shrewsbury, an executive at a gas and power hedge fund, told Bloomberg the U.S. has enough gas to get through a normal winter. But he cautioned that sustained low temperatures could create gas shortages. “If we get a prolonged cold this winter, there will be problems.”

Ernie Thrasher, the chief executive officer of Xcoal Energy & Resources LLC, told Bloomberg that utility executives have told him they’re anxious that fuel shortages this winter could trigger blackouts.

When gas supplies are short, utilities usually switch back to burning coal, but that may not be an option this year due to low coal inventories.

The Future Looks Bleak

Unfortunately, things are likely to get worse before they get better. While market forces might resolve this year’s fuel shortages in future years, misguided energy policies from electric companies and state and federal policymakers likely mean we will have fewer reliable power plants left on the grid to supply the electricity we need, when we need it most.

For example, Xcel Energy is seeking to shut down all of their existing coal-fired power plants by 2030. This would not be as much of a problem if Xcel were replacing its coal plants with new nuclear plants, but Xcel intends to rely on wind turbines, solar panels, some natural gas plants, and electricity imports from MISO to meet its electricity needs when the wind isn’t blowing and the sun isn’t shining.

This means Xcel is relying on MISO for reliable power plant capacity that we already know it doesn’t have. This is the same exact energy policy that California has been implementing for a decade, and it doesn’t work.

How Do We Fix This?

Things will only get better once policymakers prioritize reliable energy first and affordability second. Whether an energy source is carbon free must be the third consideration.

Pressuring our lawmakers, electric companies, and members of the Minnesota Public Utilities Commission to keep our existing coal, natural gas, and nuclear power plants open for the remainder of their useful lifetimes is a good start. We also need to legalize building new nuclear power plants in Minnesota because only nuclear power can provide carbon-free electricity without sacrificing reliability or affordability.

For too long, politicians and the public have romanticized the idea of a grid powered by wind and solar power. We may not have blackouts this winter, but until we start thinking rationally about energy policy again, it’s probably a good idea to have some flashlights, blankets, and dehydrated meals handy.