Brian Reinke is president of TDI Energy Solutions, a company that offers energy cost-saving products and services that are designed to help clients be more efficient and profitable.
He founded the company after 20 years in the IT industry with the goal of helping customers through the maze of energy use and cost reduction.
Reinke recently spoke with Robert Brooks, editor in chief of American Machinist, a sister brand to Smart Industry, about manufacturers’ anxiety over sources and availability of electric power.
Below is an excerpt from the podcast:
AM: You know, when you and I were first introduced, it was in the context of users’ demand. And you helped me to understand very well how independent manufacturers can make themselves more self-sufficient and less dependent on the variabilities here. And that had a lot to do with the commercial availability that utilities would have. They would give manufacturers, you know, off peak rates and various types of arrangements. But lately, and for several years, you've been stressing the need for manufacturers to secure and manage their electricity supplies. But now, what we're being presented with is a situation that's even worse than people could have imagined. And you've described it to me as a hyper complex risk environment. So, could you bring us to that point and why did you call it that?
BR: I actually stole that phrase from the head of NERC, the North American Energy Reliability Corporation. They've been beating that drum for a while now, several years. They do reliability forecast assessments to see, for the next several years, if their resources will be able to meet the anticipated demand.
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I ran across that phrase when I found a presentation that Jim Robb, NERC president and CEO, gave at a Midcontinent Independent System Operator (MISO) meeting. And he brought that up. He said in the presentation to MISO, “Present day, the electric sector risk environment has rapidly evolved and is hyper complex, stemming from grid transformation, increasingly frequent extreme weather systems, escalating physical and cyber security threats.” And I just want to cover the categories that he had brought up.
At the top of the list was rapidly changing resource mix, and I think he actually understated it. Retirements of traditional generation, natural gas interdependencies, inverter-based resource integration, and DER performance and visibility. I'll just briefly describe each of those. So, these baseload generators, coal and natural gas, that are spinning all the time, they're called spinning resources. Those are being retired at an alarmingly fast rate. We'll see another quote in just a minute. Many of the new generation resources are using natural gas as a fuel. And during extreme weather, what they found sometimes was a natural gas distribution system would freeze up. And these power plants didn't have a reserve fuel supply on site, so they would go dark. It would just cause all kinds of craziness.
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Inverter-based resource is your wind generation and your solar generation. They are very different from spinning reserves, and they have their own challenges to try to incorporate into the grid. Basically, they can trip offline a lot faster than baseload units. DER performance and visibility. DER is distributed energy resources. So, if you have a large generator on your site and they call you to say we have an emergency, we could use your power. If you've agreed to do that, you get paid money on a regular basis to be sort of on standby. Some of those resources have taken the money, but they've underperformed. Under extreme weather, extreme is happening more frequently and broader, deeper, longer. And we've seen several examples of that that I can touch on in a little while. Energy and environmental policy. Oh boy. Electrification and emissions. We're going to come back to that in a big way because several things just recently happened.
But there are other evolving threats in the landscape. Software vulnerabilities. Hey, these power systems can be hacked. Anybody can be hacked, from my research. Supply chain issues, ransomware. I mean, there was a whole pipeline that we shut down on the East Coast for 3-4 days because they had a ransomware attack. And physical attacks. A lot of people don't know it, but there are several, well, I think it's nine, extremely large interconnection transformers and one of them in California was actually attacked a couple of years ago. And it was almost pulled off. That threat continues to be out there.
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So, you know, that's where the hyper complex risk environment comes from. It's not me saying it. It's the people that know. NERC, you know, their mission is to assure the effect of an efficient reduction of risks to the reliability and security of the grid. That's their mandate. Now, the Federal Energy Regulatory Commission (FERC), the guys above them, also weighed in. Commissioner Mark Christie said, “The U.S. electric power system is headed for potentially catastrophic consequences as dispatchable generating resources are retiring far too quickly and in quantities that threaten our ability to keep the lights on.” He went on. He said, “The problem is not the addition of intermittent resources such as wind and solar, but the far-too-rapid subtraction of dispatchable resources, especially coal and gas.”
I'm not, you know, a great advocate of coal plants. I mean, they're extremely dirty, and they have some terrible emissions. But it's a matter of timing. When do you replace them and how rapidly? What kind of disruption do you get? And so back to our friends at MISO. A quote from them during that meeting: “There are urgent and complex challenges to the electric system reliability in the MISO region and elsewhere. This is not just MISO’s view. It is a well-documented conclusion throughout the electric industry.” So, it's a pretty well-known problem, but there's so many moving parts to it that hyper complex tends to, I think, encapsulate that whole thing.
