IEA: Electricity investment surpasses oil and gas for the first time


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Electricity Investment Surpasses Oil and Gas 2016, driven by renewable energy, power grids, and energy efficiency, as IEA reports lower oil and gas spending, rising solar and wind capacity, and declining coal power plant approvals.

 

Key Points

A 2016 milestone where electricity topped global energy investment, led by renewables, grids, and efficiency, per the IEA.

✅ IEA: electricity investment hit $718b; oil and gas fell to $650b.

✅ Renewables led with $297b; solar and wind unit costs declined.

✅ Coal plant approvals plunged; networks and storage spending rose.

 

Investments in electricity surpassed those in oil and gas for the first time ever in 2016 on a spending splurge on renewable energy and power grids as the fall in crude prices led to deep cuts, the International Energy Agency (IEA) said.

Total energy investment fell for the second straight year by 12 per cent to US$1.7 trillion compared with 2015, the IEA said. Oil and gas investments plunged 26 per cent to US$650 billion, down by over a quarter in 2016, and electricity generation slipped 5 per cent.

"This decline (in energy investment) is attributed to two reasons," IEA chief economist Laszlo Varro told journalists.

"The reaction of the oil and gas industry to the prolonged period of low oil prices which was a period of harsh investment cuts; and technological progress which is reducing investment costs in both renewable power and in oil and gas," he said.

Oil and gas investment is expected to rebound modestly by 3 per cent in 2017, driven by a 53 per cent upswing in U.S. shale, and spending in Russia and the Middle East, the IEA said in a report.

"The rapid ramp up of U.S. shale activities has triggered an increase of U.S. shale costs of 16 per cent in 2017 after having almost halved from 2014-16," the report said.

The global electricity sector, however, was the largest recipient of energy investment in 2016 for the first time ever, overtaking oil, gas and coal combined, the report said.

"Robust investments in renewable energy and increased spending in electricity networks, which supports the outlook that low-emissions sources will cover most demand growth, made electricity the biggest area of capital investments," Varro said.

Electricity investment worldwide was US$718 billion, lifted by higher spending in power grids which offset the fall in power generation investments.

"Investment in new renewables-based power capacity, at US$297 billion, remained the largest area of electricity spending, despite falling back by 3 per cent as clean energy investment in developing nations slipped, the report said."

Although renewables investments was 3 per cent lower than five years ago, capacity additions were 50 per cent higher and expected output from this capacity about 35 per cent higher, thanks to the fall in unit costs and technology improvements in solar PV and wind generation, the IEA said.

 

COAL INVESTMENT IS COMING TO AN END

Investments in coal-fired electricity plants fell sharply. Sanctioning of new coal power plants fell to the lowest level in nearly 15 years, reflecting concerns about local air pollution, and emergence of overcapacity and competition from renewables, with renewables poised to eclipse coal in global power generation, notably in China. Coal investments, however, grew in India.

"Coal investment is coming to an end. At the very least, it is coming to a pause," Varro said.

The IEA report said energy efficiency investments continued to expand in 2016, reaching US$231 billion, with most of it going to the building sector globally.

Electric vehicles sales rose 38 per cent in 2016 to 750,000 vehicles at $6 billion, and represented 10 per cent of all transport efficiency spending. Some US$6 billion was spent globally on electronic vehicle charging stations, the IEA said.

Spending on electricity networks and storage continued the steady rise of the past five years, as surging electricity demand puts power systems under strain, reaching an all-time high of US$277 billion in 2016, with 30 per cent of the expansion driven by China’s spending in its distribution system, the report said.

China led the world in energy investments with 21 per cent of global total share, the report said, driven by low-carbon electricity supply and networks projects.

Although oil and gas investments fell in the United States in 2016, its total energy investments rose 16 per cent, even as Americans use less electricity in recent years, on the back of spending in renewables projects, the IEA report said.

 

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Prepare for blackouts across the U.S. as summer takes hold

US Summer Grid Blackout Risk: NERC and FERC warn of strained reliability as drought, heat waves, and transmission constraints hit MISO, hydro, and renewables, elevating blackout exposure and highlighting demand response and storage solutions.

 

Key Points

A forecast of summer power shortfalls across the US grid, driven by heat, drought, transmission limits, and a changing resource mix.

✅ NERC and FERC warn of elevated blackout risk and reliability gaps.

✅ MISO region strained by drought, heat, and limited hydro.

✅ Mitigations: demand response, storage, and stronger transmission.

 

Just when it didn’t seem things couldn’t get worse — gasoline at $5 to $8 a gallon, supply shortages in everything from baby formula to new cars — comes the devastating news that many of us will endure electricity blackouts this summer, and that the U.S. has more blackouts than other developed nations according to one study.

The alarm was sounded by the nonprofit North American Electric Reliability Corp. and the Federal Energy Regulatory Commission, following a recent power grid report card highlighting vulnerabilities.

The North American electric grid is the largest machine on earth and the most complex, incorporating everything from the wonky pole you see at the roadside with a bird’s nest of wires to some of the most sophisticated engineering ever devised. It runs in real-time, even more so than the air traffic control system: All the airplanes in the sky don’t have to land at the same time, but electricity must be there at the flick of every switch.

Except it may not always be there this summer. Rod Kuckro, a respected energy journalist, says it depends on Mother Nature, with extreme weather impacts increasingly straining the grid, but the prognosis isn’t good.

Speaking on “White House Chronicle,” the weekly news and public affairs program on PBS that I host and produce, Kuckro said: “There is a confluence of factors that could affect energy supply across the majority of the (lower) 48 states. These are continued reduced hydroelectric production in the West, and the continued drought in the Southwest.”

The biggest threat to power supply, according to the NERC and the FERC, is in the vast central region, reaching from Manitoba in Canada, where grids are increasingly exposed to harsh weather in recent years, down to the Gulf of Mexico. It is served by the regional transmission organization, the Midcontinent Independent System Operator.

These operational entities are nonprofit companies that organize and distribute their regions’ bulk power for utilities. In California, it is the California Independent System Operator, working to keep the lights on as the state enters a new energy era; in the Mid-Atlantic, it is PJM; and in the Northeast, it is the New England System Independent Operator. They generate no power, but they control power flows and could initiate brownouts and blackouts.

With record storm activity and high temperatures predicted this summer, blackouts are likely to be deadly. The old, the young and the sick are all vulnerable. If the electric supply fails, with it goes everything from air conditioning to refrigeration to lights and even the ability to pump gas or access money from ATMs.

The United States, along with other modern nations, runs on electricity and when that falls short, it is catastrophic. It is chaos writ large, especially if the failure lasts more than a few hours.

On the same episode of “White House Chronicle,” Daniel Brooks, vice president of integrated grid and energy systems at the Electric Power Research Institute, also referred to a “confluence of factors” contributing to the impending electricity crisis. Brooks said, “We’re going through a significant change in terms of the energy mix and resources, and the way those resources behave under certain weather conditions.”

If power supply is stressed this summer, change in the generating mix will get a lot of political attention. At heart is the switch from fossil fuel generation to renewables. If there are power outages, a political storm will ensue. The Biden administration will be accused of speeding the switch to renewables, although the utilities don’t say that.

The weather is deteriorating, and, as experts note, the grid’s biggest challenge isn’t demand but climate change pressures that compound risks, and the grid is stretched in dealing with new realities as well as coping with old bugaboos, like the extreme difficulty in building transmission lines. Better transmission would relieve a lot of grid stress.

Peter Londa, president of Tantalus Systems, which helps its 260 utility customers digitize and cope with the new realities, explained some of the difficulties facing the utilities not only in the shifting sources of generation but also in the new shape of the electric demand. For example, he said, electric vehicles, particularly the much-awaited Ford F-150 Lightning pickup, could be an asset to homeowners and utilities, as California increasingly turns to batteries to stabilize its grid. During a blackout, their EVs could be used to power their homes for days. They could be a source of storage if thousands of owners signed up with their utilities in a storage program.

The fact is that utilities are facing three major shifts: in the generation to wind and solar, in customer demand, and especially in weather. Mother Nature is on a rampage and we all must adjust to that.
 

 

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BC residents split on going nuclear for electricity generation: survey

BC Energy Debate: Nuclear Power and LNG divides British Columbia, as a new survey weighs zero-emission clean energy, hydroelectric capacity, the Site C dam, EV mandates, energy security, rising costs, and blackout risks.

 

Key Points

A BC-wide debate on power choices balancing nuclear, LNG, hydro, costs, climate goals, EVs, and grid reliability.

✅ Survey: 43% support nuclear, 40% oppose in BC

✅ 55% back LNG expansion, led by Southern BC

✅ Hydro at 90%; Site C adds 1,100 MW by 2025

 

There is a long-term need to produce more electricity to meet population and economic growth needs and, in particular, create new clean energy sources, with two new BC generating stations recently commissioned contributing to capacity.

Increasingly, in the worldwide discourse on climate change, nuclear power plants are being touted as a zero-emission clean energy source, with Ontario exploring large-scale nuclear to expand capacity, and a key solution towards meeting reduced emissions goals. New technological advancements could make nuclear power far safer than existing plant designs.

When queried on whether British Columbia should support nuclear power for electricity generation, respondents in a new province-wide survey by Research Co. were split, with 43% in favour and 40% against.

Levels of support reached 46% in Metro Vancouver, 41% in the Fraser Valley, 44% in Southern BC, 39% in Northern BC, and 36% on Vancouver Island.

The closest nuclear power plant to BC is the Columbia Generating Station, located in southern Washington State.

The safe use of nuclear power came to the forefront following the 2011 Fukushima nuclear disaster when the most powerful earthquake ever recorded in Japan triggered a large tsunami that damaged the plant’s emergency generators. Japan subsequently shut off many of its nuclear power plants and increased its reliance on fossil fuel imports, but in recent years there has been a policy reversal to restart shuttered nuclear plants to provide the nation with improved energy security.

Over the past decade, Germany has also been undergoing a transition away from nuclear power. But in an effort to replace Russian natural gas, Germany is now using more coal for power generation than ever before in decades, while Ontario’s electricity outlook suggests a shift to a dirtier mix, and it is looking to expand its use of liquefied natural gas (LNG).

Last summer, German chancellor Olaf Scholz told the CBC he wants Canada to increase its shipments of LNG gas to Europe. LNG, which is greener compared to coal and oil, is generally seen as a transitionary fuel source for parts of the world that currently depend on heavy polluting fuels for power generation.

When the Research Co. survey asked BC residents whether they support the further development of the province’s LNG industry, including LNG electricity demand that BC Hydro says justifies Site C, 55% of respondents were supportive, while 29% were opposed and 17% undecided.

Support for the expansion of the LNG is highest in Southern BC (67%), followed by the Fraser Valley (56%), Metro Vancouver (also 56%), Northern BC (55%), and Vancouver Island (41%).

A larger proportion of BC residents are against any idea of the provincial government moving to ban the use of natural gas for stoves and heating in new buildings, with 45% opposed and 39% in support.

Significant majorities of BC residents are concerned that energy costs could become too expensive, and a report on coal phase-outs underscores potential cost and effectiveness concerns, with 84% expressing concern for residents and 66% for businesses. As well, 70% are concerned that energy shortages could lead to measures such as rationing and rolling blackouts.

Currently, about 90% of BC’s electricity is produced by hydroelectric dams, but this fluctuates throughout the year — at times, BC imports coal- and gas-generated power from the United States when hydro output is low.

According to BC Hydro’s five-year electrification plan released in September 2021, it is estimated BC has a sufficient supply of clean electricity only by 2030, including the capacity of the Site C dam, which is slated to open in 2025. The $16 billion dam will have an output capacity of 1,100 megawatts or enough power for the equivalent of 450,000 homes.

The provincial government’s strategy for pushing vehicles towards becoming dependent on the electrical grid also necessitates a reliable supply of power, prompting BC Hydro’s first call for power in 15 years to prepare for electrification. Most BC residents support the provincial government’s requirement for all new car and passenger truck sales to be zero-emission by 2035, with 75% supporting the goal and 21% opposed.
 

 

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Tornadoes and More: What Spring Can Bring to the Power Grid

Spring Storm Grid Risks highlight tornado outbreaks, flooding, power outages, and transmission disruptions, with NOAA flood outlooks, coal and barge delays, vulnerable nuclear sites, and distribution line damage demanding resilience, reliability, and emergency preparedness.

 

Key Points

Spring Storm Grid Risks show how tornadoes and floods disrupt power systems, fuel transport, and plants guide resilience.

✅ Tornado outbreaks and derechos damage distribution and transmission

✅ Flooding drives outages via treefall, substation and plant inundation

✅ Fuel logistics disrupted: rail coal, river barges, road access

 

The storm and tornado outbreak that recently barreled through the US Midwest, South and Mid-Atlantic was a devastating reminder of how much danger spring can deliver, despite it being the “milder” season compared to summer and winter.  

Danger season is approaching, and the country is starting to see the impacts. 

The event killed at least 32 people across seven states. The National Weather Service is still tallying up the number of confirmed tornadoes, which has already passed 100. Communities coping with tragedy are assessing the damage, which so far includes at least 72 destroyed homes in one Tennessee county alone, and dozens more homes elsewhere. 

On Saturday, April 1–the day after the storm struck–there were 1.1 million US utility customers without power, even as EIA reported a January power generation surge earlier in the year. On Monday morning, April 3, there were still more than 80,000 customers in the dark, according to PowerOutage.us. The storm system brought disruptions to both distribution grids–those networks of local power lines you generally see running overhead to buildings–as well as the larger transmission grid in the Midwest, which is far less common than distribution-level issues. 

While we don’t yet have a lot of granular details about this latest storm’s grid impacts, recent shifts in demand like New York City's pandemic power patterns show how operating conditions evolve, and it’s worth going through what else the country might be in for this spring, as well as in future springs. Moreover, there are steps policymakers can take to prepare for these spring weather phenomena and bolster the reliability and resilience of the US power system. 

Heightened flood risk 
The National Oceanic Atmospheric Administration (NOAA) said in a recent outlook that about 44 percent of the United States is at risk of floods this spring, equating to about 146 million people. This includes most of the eastern half of the country, the federal agency said. 

The agency also sees “major” flood risk potential in some parts of the Upper Mississippi River Basin, and relatively higher risk in the Sierra Nevada region, due in part to a historic snowpack in California.  

Multiple components of the power system can be affected by spring floods. 

Power lines – Floods can saturate soil and make trees more likely to uproot and fall onto power lines. This has been contributing to power outages during California’s recent heavy storms–called atmospheric rivers–that started over the winter. In other regions, soil moisture has even been used as a predictor of where power outages will occur due to hurricanes, so that utility companies are better prepared to send line repair crews to the right areas. Hurricanes are primarily a summer and fall phenomenon, and summer also brings grid stress from air conditioning demand in many states, so for now, during spring, they are less of a concern.  

Fuel transport – Spring floods can hinder the transportation of fuels like coal. While it is a heavily polluting fossil fuel that is set to continue declining as a fuel source for US electricity generation, with the EIA summer outlook for wind and solar pointing to further shifts, coal still accounted for roughly 20 percent of the country’s generation in 2022.   

About 70 percent of US coal is transported at least part of the way by trains. The rail infrastructure to transport coal from the Powder River Basin in Montana and Wyoming–the country’s primary coal source–was proven to be vulnerable to extreme floods in the spring of 2011, and even more extreme floods in the spring of 2019. The 2019 floods’ disruptions of coal shipments to power plants via rail persisted for months and into the summertime, also affecting river shipments of coal by barge. In June 2019, hundreds of barges were stalled in the Mississippi River, through which millions of tons of the fossil fuel are normally transported. 

Power plants – Power plants themselves can also be at risk of flooding, since most of them are sited near a source of water that is used to create steam to spin the plants’ turbines, and conversely, low water levels can constrain hydropower as seen in Western Canada hydropower drought during recent reservoir shortfalls. Most US fossil fuel generating capacity from sources like methane gas, which recently set natural gas power records across the grid, and coal utilizes steam to generate electricity. 

However, much of the attention paid to the flood risk of power plant sites has centered on nuclear plants, a key source of low-carbon electricity discussed in IAEA low-carbon electricity lessons that also require a water source for the creation of steam, as well as for keeping the plant cool in an emergency. To name a notable flood example here in the United States–both visually and substantively–in 2011, the Fort Calhoun nuclear plant in Nebraska was completely surrounded by water due to late-spring flooding along the Missouri River. This sparked a lot of concerns because it was just a few months after the March 2011 meltdown of the Fukushima Daiichi nuclear plant in Japan. The public was thankfully not harmed by the Nebraska incident, but this was unfortunately not an isolated incident in terms of flood risks posed to the US nuclear power fleet. 

 

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Cheap oil contagion is clear and present danger to Canada

Canada Oil Recession Outlook analyzes the Russia-Saudi price war, OPEC discord, COVID-19 demand shock, WTI and WCS collapse, Alberta oilsands exposure, U.S. shale stress, and GDP risks from blockades and fiscal responses.

 

Key Points

An outlook on how the oil price war and COVID-19 demand shock could tip Canada into recession and strain producers.

✅ WTI and WCS prices plunge on OPEC-Russia discord

✅ Alberta oilsands face break-even pressure near 30 USD WTI

✅ RBC flags global recession; GDP hit from blockades, virus

 

A war between Russia and Saudi Arabia for market share for oil may have been triggered by the COVID-19 pandemic in China, but the oil price crash contagion that it will spread could have impacts that last longer than the virus.

The prospects for Canada are not good.

Plunging oil prices, reduced economic activity from virus containment, and the fallout from weeks of railway blockades over the Coastal GasLink pipeline all add up to “a one-two-three punch that I think is almost inevitably going to put Canada in a position where its growth has to be negative,” said Dan McTeague, a former Liberal MP and current president of Canadians for Affordable Energy. The situation “certainly has the makings” of a recession, said Ken Peacock, chief economist for the Business Council of British Columbia.

“At a minimum, it’s going to be very disruptive and we’re going to have maybe one negative quarter,” Peacock said. “Whether there’s a second one, where it gets labeled a recession, is a different question. But it’s going to generate some turmoil and challenges over the next two quarters – there’s no doubt about that.”

RBC Economics on March 13 announced it now predicts a global recession and cut its growth projections for Canada's economy in 2020 by half a per cent.

Oil price futures plunged 30% last week, dragging stock markets and currencies, including the Canadian dollar, down with them, even as a deep freeze strained U.S. energy systems. That drop came on top of a 17% decline in February, due to falling demand for oil due to the virus.

The latest price plunge – the worst since the 1991 Gulf War – was the result of Russia and the Organization of Petroleum Exporting Countries (OPEC), led by Saudi Arabia, failing to agree on oil production cuts.

The COVID-19 outbreak in China – the world’s second-largest oil consumer – had resulted in a dramatic drop in oil demand in that country, and a sudden glut of oil, with the U.S. energy crisis affecting electricity, gas and EV markets.

OPEC has historically been able to moderate global oil prices by controlling output. But when Russia refused to co-operate with OPEC and agree to production cuts, Saudi Arabia’s state-owned company, Aramco, announced it plans to boost its oil output from 9.7 million barrels per day (bpd) to 12.3 million bpd in April.

In response to that announcement, West Texas Intermediate (WTI) prices dropped 18% to below US$34 per barrel while the Canadian Crude Index fell 24% to US$21. Western Canadian Select dropped 39% to US$15.73.

The effect on Alberta oilsands producers was severe and immediate. Cenovus Energy Inc. (TSX:CVE) saw roughly $2 billion in market cap erased on March 9, when its stock dropped by 52%, which came on top of a 12% drop March 6.

The company responded the very next day by announcing it would cut spending by 32% in 2020, suspend its oil-by-rail program and defer expansion projects.

MEG Energy Corp. (TSX:MEG), which suffered a 56% share price drop on March 9, also announced a 20% reduction in its 2020 capital spending plan.

Peter Tertzakian, chief economist for ARC Energy Research Institute, wrote last week that Russia’s plan is to try to hurt U.S. shale oil producers, who have more than doubled U.S. oil production over the past decade.

Anas Alhajji, a global oil analyst, expects that plan could work. Even before the oil price shock, he had predicted the great shale boom in the U.S. was coming to an end.

“Shale production will decline, and the myth of ‘explosive growth’ will end,” he told Business in Vancouver. “The impact is global and Canadian producers might suffer even more if the oil that Saudi Arabia sends to the U.S. is medium and heavy. This might last longer than what people think.”

The question for Alberta is how Canadian producers can continue to operate through a period of cheap oil. Alberta producers do not compete on the global market. They serve a niche market of U.S. heavy oil refiners, and Biden-era policy is seen as potentially more favourable for Canada’s energy sector than alternatives.

“On the positive side, the industry is battle-hardened,” Tertzakian wrote. “Over the past five years, innovative companies have already learned to endure some of the lowest prices in the world.”

But he added that they need WTI prices of US$30 per barrel just to break even.

“But that’s an average break-even threshold for an industry with a wide variation in costs. That means at that level about half the companies can’t pay their bills and half are treading water.”

Just prior to the oil price plunge, the International Energy Agency (IEA) updated its 2020 forecast for global oil consumption from an 825,000 bpd increase in oil consumption to a 90,000 bpd decrease, due to the COVID-19 virus and consequent economic contraction and reduction in travel.

The IEA predicts global oil demand won’t return to “normal” until the second half of 2020. But even if demand does return to pre-virus levels, that doesn’t mean oil prices will – not if Saudi Arabia can sustain increased oil production at low prices, and evolving clean grid priorities could influence the trajectory too.

The oil plunge was greeted in Alberta with alarm. Alberta Premier Jason Kenney warned Alberta is in “uncharted territory” as consumers are urged to lock in rates and said his government might have to review its balanced budget and resort to emergency deficit spending.

While British Columbians – who pay some of the highest gasoline prices in North America – will enjoy lower gasoline prices at a time when prices are usually starting a seasonal spike, B.C.’s economy could feel knock-on effects from a recession in Alberta.

“We sell a lot of inputs, do a lot of trade with Alberta, so it’s important for B.C., Alberta’s economic health,” Peacock said, “and recent tensions over electricity purchase talks underscore that.”

Last week, the Trudeau government announced $1 billion in emergency funding to cope with the virus and waived a one-week waiting period for unemployment insurance.

 

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Texas's new set of electricity regulators begins to take shape in wake of deep freeze, power outages

Texas PUC Appointments signal post-storm reform as Gov. Greg Abbott taps Peter Lake and advances Will McAdams for Senate confirmation, affecting ERCOT oversight, grid reliability, wholesale power pricing, and securitization for co-ops.

 

Key Points

Texas PUC appointments add Peter Lake and Will McAdams to steer ERCOT, grid reliability, and market policy.

✅ Peter Lake nominated chair to replace Arthur D'Andrea.

✅ Will McAdams advances toward Senate confirmation.

✅ Focus on ERCOT oversight, price cap debate, grid resilience.

 

A new set of Texas electricity regulators began to take shape Monday, as Gov. Greg Abbott nominated a finance expert to be the next chairman of the Public Utility Commission while his earlier choice of a PUC member moved toward Senate confirmation.

The Republican governor put forward Peter Lake of Austin, who has spent more than five years as an Abbott appointee to the Texas Water Development Board, as his second commission pick in as many weeks.

“I am confident he will bring a fresh perspective and trustworthy leadership to the PUC,” Abbott said of Lake, who once worked as a trader of futures and derivatives for a firm belonging to the Chicago Mercantile Exchange and more recently has eagerly promoted bonds for the State Water Implementation Fund for Texas.

“Peter’s expertise in the Texas energy industry and business management will make him an asset to the agency,” Abbott, who has touted grid readiness in recent months, said in a written statement. “I urge the Senate to swiftly confirm Peter’s appointment.”

On Monday, the Senate appeared to be moving quickly to confirm Abbott’s April 1 selection for the PUC, Will McAdams, president of Associated Builders and Contractors of Texas and a former legislative aide who helped write policy for regulated industries such as electricity.

McAdams was among the 129 nominees that the Senate Nominations Committee voted out, 8-0. His nomination heads now to the Senate floor.

All three of Abbott’s handpicked PUC commissioners who were in place before and during February’s calamitous winter storm have since quit or said they’re resigning, even as Sierra Club criticism of Abbott's demands intensified in the aftermath.

February’s polar vortex left in its wake physical and financial wreckage after a nonprofit grid operator answering to the PUC, amid calls for market reforms to avoid blackouts, shut off electricity to more than 4 million Texans, causing the deaths of at least 125 people, 13 of them in the Dallas-Fort Worth area.

Gov. Greg Abbott on Thursday named Will McAdams to the embattled Public Utility Commission of Texas. McAdams is a construction industry lobbyist with strong ties to the GOP-controlled Legislature. In Feb. 17 file photo, winter storm's snowfall andn large electrical transmission lines in South Arlington are pictured.

In a 45-minute confirmation hearing, McAdams, as lawmakers discussed ways to improve electricity reliability statewide, drew praise – and few tough questions.

McAdams, who previously worked for three GOP senators, testified that had he been on the commission in February, he would not have kept in place a controversial, $9,000-per-megawatt hour price cap on wholesale power for about 32 hours on Feb. 18-19.

“I don’t see myself making that decision,” he said.

McAdams, though, hedged slightly, saying he’s not privy to all information that the Electric Reliability Council of Texas, or ERCOT, and the PUC may have had at their disposal during the crisis.

The comments were notable because Lt. Gov. Dan Patrick and the Senate have fought with Abbott and the House over $16 billion in overcharges that, according to an independent market monitor, wrongly accrued near the end of the Feb. 15-19 outages.

Sen. Charles Schwertner, R-Georgetown, said the commission’s former chairwoman, DeAnn Walker, and Bill Magness, president of ERCOT, decided to hold the high cap in place because there “was still great concern about grid stability, even though there was significant reserves.”

He pressed McAdams to call that incorrect, which McAdams did.

“Given the fact pattern that I’m privy to, senator,” it wasn’t the right move, he said. “But again, there may be other facts out there. There probably are.”

McAdams acknowledged many homeowners and businesses were traumatized.

“The public’s confidence in the ability of the PUC to effectively regulate our electric markets has been badly damaged and shaken,” he said.

McAdams spoke favorably of renewable energy, calling wind and solar “absolutely valuable resources,” as the electricity sector faces profound change nationwide. To whatever extent those are not available, the PUC should “firm that up” with “dispatchable forms of generation,” such as gas, coal and nuclear, McAdams said.

He also called for lawmakers to consider providing electricity market bailout through “securitization,” or low-interest bond financing, to rural electric co-ops that were unable to pay the massive wholesale power bills they racked up during the February crisis.

“It would prevent those systems from having to front-load those costs onto their own members and smooth that out over a term of years,” while preventing an “uplift” of costs to other market participants who wisely hedged against soaring prices, McAdams said.

Noting that more than 400 bills have been filed to change ERCOT and how it’s governed, and as Texans prepare to vote on grid modernization funding this year, McAdams told the Senate panel, “It is clear to me that the Legislature wants meaningful changes to the status quo – to ensure that something positive comes out of this tragedy.”

Lake, who if confirmed by the Senate would replace Arthur D’Andrea as PUC chairman, grew up in Tyler. He attended prep school in New England and earned an undergraduate degree from the University of Chicago and a master of business administration degree from Stanford University.

He then worked for a commodities trading firm, a behavioral health company and as a business consultant before he became director of business development for Tyler-based Lake Ronel Oil Co. in 2014.

In late 2015, Abbott named Lake to the Texas Water Development Board and in February 2018 picked him to be the chairman of the three-member board that seeks to ensure water supplies for a fast-growing state.

Lake has steered the water board as it rolled out additional loans for water projects, approved by the Legislature and voters in 2013, and took the lead after Hurricane Harvey on flood control planning and infrastructure financing.

He’s posted exuberantly on Twitter as he toured agricultural water installations, lakes in West Texas and river authorities.

If confirmed, Lake and McAdams each would make $189,500 a year.

 

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Geothermal Power Plant In Hawaii Nearing Dangerous Meltdown?

Geothermal Power Plant Risks include hydrogen sulfide leaks, toxic gases, lava flow hazards, well blowouts, and earthquake-induced releases at sites like PGV and the Geysers, threatening public health, grid reliability, and environmental safety.

 

Key Points

Geothermal Power Plant Risks include toxic gases, lava impacts, well failures, and induced quakes that threaten health.

✅ Hydrogen sulfide exposure can cause rapid pulmonary edema.

✅ Lava can breach wells, venting toxic gases into communities.

✅ Induced seismicity may disrupt grids near PGV and the Geysers.

 

If lava reaches Hawaii’s PGV geothermal power plant, it could release of deadly hydrogen sulfide gas. That’s the latest potential danger from the Kilauea volcanic eruption in Hawaii. Residents now fear that lava flow will trigger a meltdown at the Puna Geothermal Venture (PGV) power plant that would release even more toxic gases into the air.

Nobody knows what will happen if lava engulfs the PGV because magma has never engulfed a geothermal power plant, Reuters reported. A geothermal power plant uses steam and gas heated by lava deep in the earth to run turbines that make electricity.

The PGV power plant produces 25% of the power used on Hawaii’s “Big Island.” The plant is considered a source of clean energy because geothermal plants burn no fossil fuels and produce little pollution under normal circumstances, even as nuclear retirements like Three Mile Island reshape low-carbon options.

 

The Potential Danger from Geothermal Energy

The fear is that the lava would release chemicals used to make electricity at the plant. The PGV has been shut down and authorities moved an estimated 60,000 gallons of flammable liquids away from the facility. They also shut down wells that extract steam and gas used to run the turbines.

Another potential danger is that lava would open the wells and release clouds of toxic gases from them. The wells are typically sealed to prevent the gas from entering the atmosphere.

The most significant threat is hydrogen sulfide, a highly toxic and flammable gas that is colorless. Hydrogen sulfide normally has a rotten egg smell which people might not detect when the air is full of smoke. That means people can breathe hydrogen sulfide in without realizing they have been exposed.

The greatest danger from hydrogen sulfide is pulmonary edema; the accumulation of fluid in the lungs, which causes a person to stop breathing. People have died of pulmonary edema after just a few minutes of exposure to hydrogen sulfide gas. Many victims become unconscious before the gas kills them. Long-term dangers that survivors of pulmonary edema face include brain damage.

Hydrogen sulfide can also cause burns to the skin that are similar to frostbite. Persons exposed to hydrogen sulfide can also suffer from nausea, headaches, severe eye burns, and delirium. Children are more vulnerable to hydrogen sulfide because it is a heavy gas that stays close to the ground.

 

Geothermal Danger Extends Far Beyond Hawaii

The danger from geothermal energy extends far beyond Hawaii. The world’s largest collection of geothermal power plants is located at the Geysers in California’s Wine Country, and regulatory timelines such as the postponed closure of three Southern California plants can affect planning.

The Geysers field contains 350 steam production wells and 22 power plants in Sonoma, Lake, and Mendocino counties. Disturbingly, the Geysers are located just north of the heavily-populated San Francisco Bay Area and just west of Sacramento, where preemptive electricity shutdowns have been used during extreme fire weather. Problems at the Geysers might lead to significant blackouts because the field supplies around 20% of the green energy used in California.

Another danger from geothermal power is earthquakes because many geothermal power plants inject wastewater into hot rock deep below to produce steam to run turbines, a factor under review as SaskPower explores geothermal in new settings. A geothermal project in Switzerland created Earthquakes by injecting water into the Earth, Zero Hedge reported. A theoretical threat is that quakes caused by injection would cause the release of deadly gases at a geothermal power plant.

The dangers from geothermal power might be much greater than its advocates admit, potentially increasing reliance on natural-gas-based electricity during supply shortfalls.

 

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