Analysis by Energy Workforce President Tim Tarpley
Texas entered its second straight week of record high June temperatures that are putting significant strain on ERCOT and the surrounding grids. The good news is that for the most part, the grid appears to be holding without major widespread outages. Some local jurisdictions have requested power customers avoid some appliance use during the hottest times of the day to help lower the load. This test comes as efforts go into effect by the Texas Legislature and Gov. Abbott to increase the use of natural gas as the baseload for the grid.
Grid reliability and infrastructure upgrades continue to be a hot button issue, not only in Texas, but all over the country. Energy demand is increasing virtually everywhere, and regulators are looking to find the balance of bringing on renewable energy sources while at the same time utilizing the plentiful and reliable opportunities afforded to a grid with natural gas as the primary baseload. The Russian invasion of Ukraine has served as a reminder how important it is for any country to control where their energy comes from, and natural gas is well positioned to answer these needs both in the United States and around the world for many decades to come.
Europe Fails to Reach Agreement on Energy Market Reforms
Agreement in Europe on how the continent should stabilize their energy markets after the invasion of Ukraine has caused significant disruption. On Monday, the European Union failed to agree on proposed reforms to its energy market after a last-minute proposal by Sweden, which holds the EU’s rotating presidency, for extending state support for coal power. It became clear that the countries had significant policy differences regarding coal and its role in the continent’s energy future. “For some of us, security means capacity markets,” Poland’s energy minister Anna Moskwa said. Poland, situated just across the border from the conflict in Ukraine, currently gets about 70 % of its grid capacity from coal-fired generation.
Coal is not the only sticking point among the EU. Disagreement was also found regarding the extent of state subsidies for wind and solar. Some countries, including Germany, the Netherlands and Austria were opposed to the idea of offering fixed-price contracts not only to wind and solar energy generators but to nuclear and other power generators. France, which relies heavily on nuclear power, supported the measure. We will continue to watch these negotiations closely as the outcome will have significant implications for LNG exports to Europe.
Tim Tarpley, Energy Workforce President, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.