My background in the electric sector has always been associated with power plant operations. However, the relationship between power plants and the electric grid was something that I really did not bother to understand because it was mostly irrelevant to my responsibilities. In recent years I started to try to understand more about how the plants are dispatched and became increasingly uncomfortable with what seemed to be happening. Meredith Angwin’s book Shorting the Grid – The Hidden Fragility of Our Electric Grid has been a revelation. It is an easy-to-understand description of the arcane world of current electric grid operations, and it explained why some of the things I see happening are leading to a more fragile electric grid.
New York’s Climate Leadership & Community Protection Act(Climate Act) mandates a massive change to the electric system which is complicated by New York’s electric grid structure. I have followed the Climate Act since it was first proposed, submitted comments on the Climate Act implementation plan, and have written over 400 articles about New York’s net-zero transition. The opinions expressed in this article do not reflect the position of any of my previous employers or any other organization that I have been associated with, these comments are mine alone.
Overview
The Climate Act established a New York “Net Zero” target (85% reduction in GHG emissions and 15% offset of emissions) by 2050. It includes an interim 2030 reduction target of a 40% GHG reduction by 2030, a 70% electric system renewable energy mandate by 2030, and a requirement that all electricity generated be “zero-emissions” resources by 2040. The Climate Action Council (CAC) was responsible for preparing the Scoping Plan that outlined how to “achieve the State’s bold clean energy and climate agenda.”The Integration Analysis prepared by the New York State Energy Research and Development Authority (NYSERDA) and its consultants quantifies the impact of the electrification strategies used to reduce greenhouse gas emissions. That material was used to develop the Draft Scoping Plan outline of strategies. After a year-long review, the Scoping Plan was finalized and approved by the CAC at the end of 2022. Since then, the State has been trying to implement the Scoping Plan recommendations through regulations, Public Service Commission orders, and legislation.
However, recent reports have raised problems with the implementation process. The New York Independent System Operator (NYISO) recently released the 2023-2042 System & Resource Outlook notes that there are complications that the proposed New York electric system must address related to reliance on weather-dependent wind and solar resources. My particular concern is that the NYISO planning process must not only identify technological solutions but also devise market mechanisms consistent with New York’s electric energy market.
Meredith Angwin describes herself in the book:
As a working chemist, Meredith Angwin headed projects that lowered pollution and increased reliability on the electric grid. Her work included pollution control for nitrogen oxides in gas-fired combustion turbines, and corrosion control in geothermal and nuclear systems.
She was one of the first women to be a project manager at the Electric Power Research Institute. She led projects in renew- able and nuclear energy.
In the past ten years, she began to study and take part in grid oversight and governance. For four years, she served on the Coordinating Committee for the Consumer Liaison Group associated with ISO-NE, her local grid operator. She teaches courses and presents workshops on the electric grid. She is also an advocate for nuclear energy. Finally, she is the author of the Electric Grandma blog.
Angwin’s book describes how the electric grid works and current problems facing the system. It concludes with a discussion of what kind of grid we should strive to have. I thought that her framing of grid goals was very good. She said that we need to ask ourselves two practical and moral questions.
Do we deserve to have electricity available at all times? Or is an intermittent, fragile grid good enough?
How important are the various aspects of our electric supply? That is, what are the values we assign to things like reliability, cost, low environmental impact, and low carbon dioxide releases?
I am going to review the book with respect to those questions in the context of the Climate Act and New York energy policy. The chapters are grouped into five sections.
Angelic Miracles and Easy Problems
The first section encompasses ten chapters of the book that describe the shift in electric grid governance over the last few decades. When I started work at Niagara Mohawk Power Corporation (NMPC) in 1981 the electric grid was operated by vertically integrated utilities. After the 1965 blackout in the Northeast the utilities realized that they needed a state-wide transmission operator, and the New York Power Pool was formed. The state’s utility companies owned and operated generating assets and the Power Pool dispatched the plants. The NYS Public Service Commission and the utilities emphasized reliability. When I joined NMPC, management was very proud that they had coal, oil, hydro, and nuclear generating stations (at the time natural gas was too expensive to use for power production). Not only that, the coal and oil plants had alternate ways to supply fuel to the plants. The result was a robust and stable generating system and grid.
A summary of how electric deregulation occurred in New Yorkdescribes the transition away from vertically integrated utilities in New York. New York’s legislature thinks they know how to deal with energy policy and they passed legislation that had the goal of a competitive wholesale market by 1997 and a competitive retail market by 1998. As part of this legislation all utility companies were required to restructure to enable these changes. Angwin describes how regional transmission organizations (RTOs) like the New York Independent System Operator (NYISO) replaced bodies like the New York Power Pool as part of this deregulation process.
A key difference between the old approach and the new de-regulated approach is that “no group or agency has the responsibility for grid reliability”. The NYISO and the Public Service Commission determine what they think is necessary and solicit developers to build those resources. If those resources do not get built because nobody bids, the developers realize that they cannot make money and cancel commitments, there are delays in deployment, or for any other reason, there is nobody on the hook.
This section of the book describes how the electric system works. That is a very difficult challenge, but she does a good job – the glossary of acronyms and jargon is worth the price of the book. She fills in details of the differences between the vertically integrated utilities and the regional transmission operators. The last chapter describes a specific event that illustrates the challenges of the new approach that has made reliable electricity more difficult to provide.
Policy, Markets, and Fuel Security
The next 15 chapters delve into the world of de-regulated electricity markets. The impetus for de-regulated electric grids was the presumption that monopolies were inextricably linked to higher prices and poorer outcomes. Successful deregulation of the phone companies and airlines drove the de-regulation bandwagon. Angwin argues that electric deregulation has not been a success because consumers do not have much choice in providers, there is minimal transparency within the market, and accountability for the system has been spread across different players.
The complexity of the system, the vested interests of generating companies, transmission owners, and the system operators coupled with a lack of accountability to the public has led to gaming the system for financial gain. Trying to adjust the rules when the games are discovered leads to complexity, unintended consequences, and more opportunities to game the system. Angwin points out that:
Market manipulation was successful in California because there was nobody responsible for making the system work. In an RTO area, the buck never stops anywhere. Not even today.
The rest of the chapters in this section provide details of the de-regulated system and how they have made the electric system more fragile and costly. Electric markets that were supposed to provide flexibility and innovation have become complex systems with “new regulations constantly tweaking and trying to improve regulations.” Angwin sums it up:
It’s Orwellian. RTOs are “deregulated” only if “deregulated” actually means “lots more regulation.”
Renewables on the Grid
The electric systems in the de-regulated states would be problematic even if there was no overarching initiative to decarbonize the electric sector. The drive to reduce emissions using renewable energy adds another enormous level of difficulty to electric system planning. The nine chapters in this section describe the issues associated with renewable energy deployment.
In an ideal deregulated electric system, policies would be fuel neutral but state and federal decarbonization policies override that goal. Angwin explains how renewables affect the operation of the grid. She aptly argues that all renewable electric systems “could” work but because of intermittency the grid has to work around them. That is not a recipe for a robust and secure system.
As an aside Angwin and New York are concerned primarily with wind and solar renewables. All the other potential renewable resources are not viable sources that can provide the amount of energy needed to replace fossil fuels because of geographical limitations (hydro), ideological considerations (e.g. biomass), or unproven technology (tidal). Hence the emphasis on wind and solar.
Angwin describes three issues with renewables: “spikiness”, reliability, and their effect on power supply itself. To provide electricity when needed grid operators must constantly match generating resources to the load. The intermittency or ‘spikiness” of wind and solar complicates that balancing challenge. To provide reliable power, alternative sources are needed to backup wind and solar. The backup could come from fast reacting fossil fired generation but that is not an option in New York. Instead, energy storage is needed. The problem with that is there are multiple scales of storage required. On a daily basis, solar needs backup for night backup but changes in the length of days means there also is a seasonal component. Finally, Angwin points out that quality of electricity is important and wind, solar, and batteries adversely affect electric quality. She also points out that there are potential solutions for many of these data quality problems, but the issue is who pays for them.
The remainder of this section delves into the details of certain aspects of the proposed renewable -dependent electric grids of the future. One chapter addresses renewable policies that affect consumer prices. There is a chapter that discusses renewable energy credits or RECs and how they are being used to support preferred generating resources. She concludes that games with RECs and complex policies “do not lead to a reliable grid”.
The chapter titled “The Purpose of Renewables” addresses the reasons why renewables are attractive. She argues that a primary attraction is that they have “zero” emissions. This raises the question why nuclear is not generally promoted given that there are no emissions, and it has none of the shortcomings of wind and solar. She describes zero emission credits (ZECs) which are being used to support existing nuclear facilities and uses a New York example.
The RTO and the Customer
The next six chapters summarize the negative consequences of the RTO electric grid to customers.
In the first chapter Angwin explains that the American electric grid is considered the largest machine on earth and that means the interdependence of so many different and diverse components make planning very difficult but also a necessity. Before deregulation many utilities had to file integrated resource plans that explained how expected load would be met in the next 20 years. She writes that the scope of planning diminished with the rise of RTOs. However, this has led to an unacknowledged critical problem that she describes:
In the RTO areas, without any real oversight of requirements, renewable resources are overbuilt, and they lock the grid into gas-turbine backup. It’s like building a car without a blueprint but taking the lowest bid for someone who can supply “part of a car.” You may be able to procure wheels and tires, but transmissions will be way too expensive to buy. Buying tires may be inexpensive, but building a car needs a blueprint, and a car needs a transmission.
In other words, I am not against renewables per se. When I started working in the utility field, I aimed at expanding the role of renewables.
However, I am against greenwashing. “Come to our restaurant. It uses 100% renewable electricity. And the RECs were pretty cheap.” I am against the no-planning idea that all types of generation are equivalent: that inexpensive, reliable baseload power is unimportant, because every part of the modern grid will be optimized to be “flexible.”
The largest machine in the world is the North American grid. Not all parts on the grid are interchangeable. Not all types of plants have the same optimizations. With just a “market” for tires, a car won’t be built. With a “market” that treats all sources of electricity as equivalent, despite differences in availability and other parameters the grid becomes more fragile.
The grid will fail in RTO areas. New types of auction carveouts will not prevent rolling blackouts.
When that happens, in an RTO area, the buck will stop …. nowhere.
Fortunately, the NYISO recognized the importance of planning on this scale and has added a System and Resource Outlook to their reliability planning process. The latest Outlook covers 2023-2042 and necessarily addresses the Climate Act policies that promote renewables. it is encouraging for New York that planning is considering this problem there is still a missing piece. Unless state energy policy becomes less dogmatic and more consistent with New York’s electric energy planning experts rolling blackouts are inevitable.
Two chapters in this section addressed specific aspects of renewable development: overinvesting in renewables and distributed generation. The lack of accountability in many RTOs leads to overinvestment in renewables that has led to physical and financial problems. Renewable advocates hope that the world will move away from the current system with large generators and extensive transmission systems. Their solution is distributed generation which uses smaller units located close to their customers. The problem with this approach is that there is still a need for backup power and that makes them impractical for widespread use.
Angwin describes personal responsibility issues. She gives an example where a sincere concerned person argued that if she took actions to reduce her emissions and use of electricity that it would make a difference for climate goals. Angwin gives several examples that show individual actions will not make a difference and that the only way to meaningfully change emissions is for big changes. Despite the fact that individual actions have little effect, utilities are trying to control consumer demand. They offer time of use pricing that gives breaks for shifting electric use to off-peak times. To provide that incentive utilities are installing smart meters that can track time of use. Angwin points out that it is a small step from a voluntary program to an involuntary program once smart meters are installed.
The final chapter in this section looks at the actions of generating companies in RTOs. Given that the independent generators no longer have an obligation to serve when operators decide that the market rules don’t provide sufficient incentives to remain competitive, they shut down or sell the assets. Selling assets may buy some time but when the financial outlook does not improve, they will be shut down. Angwin explains how this is affecting the resiliency of the grid in a bad way.
Is There a Way Forward?
In the last six chapters Angwin sums up her concerns and makes suggestions for improving the existing situation. In the introduction I mentioned two philosophical questions she posed:
Do we deserve to have electricity available at all times? Or is an intermittent, fragile grid good enough?
How important are the various aspects of our electric supply? That is, what are the values we assign to things like reliability, cost, low environmental impact, and low carbon dioxide releases?
In the first chapter of this section she explains why she thinks we deserve to have electricity available when we want it. When prosperity increases energy use increases and that is a good thing because it means people can escape energy poverty. Lack of electricity hurts people because the alternatives are invariably more dangerous. In the third world the advantages are obvious but even in New York lack of electricity is dangerous and must be avoided.
Angwin’s description of a high-quality electric grid is important. Her criteria are:
The grid should work very reliably for all customers. Everyone should have access to energy, every hour of every day.
The power plants on the grid should be as clean as reasonably possible.
Similarly, safety concerns for nuclear energy have to be balanced with the positive benefits of the technology.
Electricity prices should be as low as reasonably possible. In particular, no residential customer should pay an increased bill in order to provide lower prices for another residential customer. Low-carbon, non-fossil sources of electricity should be encouraged, as much as reasonably possible.
We should be ready to use more electricity, not less. If we want to reduce pollution from the heating sector and the transportation sector, we will have to use electricity in those sectors. While there is much excitement about microgrids, solar power, and so forth, the grid design should acknowledge that only a small portion of electricity users will be prosumers.
The main message in the book is that current policies in RTO areas is that the grid is being moved inexorably to a strong reliance on renewable energy coupled with an equally strong reliance on just-in-time natural gas delivery as backup. In New York the shift to a reliance on natural gas has already occurred. The only exceptions are oil-fired units used to back up the gas plants when demand is very high or there are interruptions to natural gas delivery. Renewable energy from wind and solar is not much of a factor yet but the Climate Act plan ensures that they will be a factor soon.
There are credible scenarios for this type of grid to collapse so she offers suggestions to ensure that the gird meets the high-quality criteria mentioned. She advocates for a return to the older vertically integrated utility model because the current approach has the following issues:
Excessive tariffs and complex regulation.
Excessive deference to stakeholders/insiders.
Nobody has responsibility for keeping the grid operational.
A grid that becomes more fragile with increased reliance on just-in-time gas without new pipelines to bring more gas.
Extra consumer costs introduced by the RTOs because nobody claims that the RTO areas save money for the customers.
States can make rules while assuming that some other state in the RTO area will bear the cost.
The final chapter includes recommendations for what can be done. Many of the recommendations are for RTOs that cover multiple states and thus are inapplicable to New York. Even though New York is in one state system I am concerned because there are disconnects between the long-term planning by the NYISO and the Climate Act Scoping Plan. Those differences need to be reconciled and there is no apparent process to do that.
Angwin argues that grassroot advocacy is the best approach for change to try to address these problems. She offers some suggestions on how to do that.
She also persuasively argues that over-reliance on natural gas will lead to problems. In the absence of new technology natural gas will be the preferred backup resource. If reducing emissions is a primary concern, then she argues that nuclear energy has many advantages.
She concludes that we need to pay attention to these issues for a number of reasons:
There are systematic problems with grid governance in the RTO areas. The grid is becoming more single-fuel, more vulnerable, and more expensive. Insiders make the rules, and the public cannot participate in a meaningful way.
In trying to talk about the grid problems, I have found that most people have deep opinions on power plants. They hate coal or nuclear, or they hate wind turbines, or whatever. They are often completely unaware of how the ratepayer-serfs are getting robbed by the insiders in an RTO area. Grid governance just isn’t on most people’s radar.
I hope you will pay attention to grid governance and take part in the debates. Ratepayers are not usually “allowed” to take part in the debates, but we have to try.
If we are not concerned with the grid, we will not have a safe and happy country to leave to our children.
I can’t say it any more starkly than that. We must take the grid away from the insiders, or our children may be outsiders, in some very unpleasant ways.
Discussion
Tom Shepstone has written a much shorter and more readable review of the book. I recommend reading both his summary and the book itself. Angwin makes a persuasive case that the present path will lead to rolling blackouts based on how the RTOs operate.
One of the big issues mentioned is that individual states policies have unintended consequences in multi-state RTOs. New York has the advantage that the NYISO only must worry about New York policies. New York also has the New York State Reliability Council “whose mission is to promote and preserve the reliability of electric service on the New York State Power System by developing, maintaining, and, from time-to-time, updating the Reliability Rules which shall be complied with by the New York Independent System Operator (“NYISO”) and all entities engaging in electric transmission, ancillary services, energy and power transactions on the New York State Power System.” I know that they have addressed many of the issues raised by Angwin. I do not know if there are similar organizations in other RTOs.
Nonetheless, I think that New York’s grid is in danger. The problem is that New York’s Climate Act has imposed an arbitrary schedule on the NYISO and PSC to convert from the present system. The ambition and schedule did not consider feasibility. Furthermore, Angwin makes the pragmatic recommendation that policies like the Climate Act should look at what has actually worked to decarbonize grids in other jurisdictions. Given that no jurisdiction has transitioned away from fossil fuels using wind and solar this means New York’s plans to rely on wind and solar are likely doomed.
Conclusion
I learned a lot about New York’s deregulated market from this book. The Climate Act electric system transition to “zero” emissions by 2040 has two challenges. New technology is going to be required and it is not clear whether any technology can provide everything that is needed to maintain current standards of reliability. The book confirmed my suspicion that the RTO model for grid governance is going to have a huge challenge developing the market mechanism to ensure that the new technology will be available when and where needed in sufficient quantities to keep the lights on. Finally, the grid governance policies to address this overarching issue will not have customer priorities very high in their decision process.
