They say everything is bigger in Texas and the sudden cold snap in February 2021, which caused failure of the state’s natural gas supply and subsequently its power grid, is no exception.
The Lone-grid state
To avoid complying with the Federal Energy Regulatory Commission and the Commerce Department, Texas established its own state energy regulatory body, the Electricity Reliability Council of Texas (ERCOT) and promised not to sell electric power across state lines, giving Texan operators a wide degree of freedom with which to cut costs. However, this left Texas exposed to significant risk without having backup grid reliability by being disconnected from the National Grid. When the power grid in Texas failed as a result of disruption in natural gas fuel supplies, operators had no access to wholesale power purchases from across the United States with which to subsidize the state’s electric power deficit.
In case you missed it:
- Poor winterization of infrastructure caused critical failures of the natural gas and electricity supply in Texas.
- National weekly average natural gas spot prices rose nearly 100.0% as a result of supply disruptions in the region.
- Net generation of electricity by natural gas fired plants in Texas declined an estimated 25.0%.
- Wholesale electricity prices in Texas increased nearly 10,000.0%.
To green or not to green
There has been much debate over whether policies of increasing wind power capacity at the expense of coal and natural gas net generation were partly to blame for the failure in Texas’s power grid. It should be noted that wind turbines failed due to the same reason as natural gas supplies: poor winterization preparations. Regardless, since battery technology is not yet sufficiently scalable at the utility level, renewable energy cannot be dispatched to meet sudden increases in power demand, even in optimal conditions.
Furthermore, net declines in solar and wind net power generation as a result of the polar vortex paled compared with those exhibited by thermal generating sources such as natural gas and coal and nuclear power. Overall, wind energy in Texas accounts for nearly 25.0% of net generation, while natural gas accounts for more than 50.0% of net generation. Even the state’s combined renewable net generating capacity is nowhere near sufficient to offset declines of such magnitude in natural gas-fired net generation, let alone that of coal and nuclear.
The bottom line
Overall, what occurred in Texas is a critical failure of its supply chain, primarily due to an exogenous shock that the state’s infrastructure was ill-equipped to handle. Not only was Texas’s electric power infrastructure completely insufficient and unprepared to meet surges in demand, poor winterization efforts and unpreparedness paralyzed the state’s ability to respond should supplies of natural gas or electricity be cut off. This suggests that a policy of diversification among dispatchable and intermittent net-generating capacity, as well as contingency planning, is critical when considering the resilience and reliability of the Texas power grid.
