Unpacking What Just Happened in Texas: Winter Storms, Blackouts, and Outrage

As the winter storm watch was reported for much of the Southern United States starting the week of February 14, 2021, grid onlookers well knew that this greater than average cold front and winter storm would elevate demand on the utility industry. In a region that is used to milder winters, experts foresaw strain on the grid and potential issues in the power sector to a greater degree that had been seen in some time. Even with that warning, though, the state of Texas was not nearly prepared for the sheer impact these storms would have on their state as a whole, including starkly the seeming failure of their power grid. By Monday the 15th, 2.5 million Texans were without left without power, a number that inflated to 4.3 million people (comprising one third of the state) by Tuesday. While at this point temperatures have gone back to seasonal averages and power has been steadily restored across the state, in the week since the worst happened there have been troves of government officials, public pundits, and citizens alike begging industry insiders to clearly answer: why did this happen? Why weren’t we prepared? And, most importantly, what must be done to prevent it from happening again? While much of the initial aftermath was spent pointing fingers, the true causes won’t be truly and thoroughly understood until the full investigation and postmortem reports are completed. But in the wake of the unprecedented and devastating events across the Lonestar State, the important place to start is simply asking: what in the world just happened? Step 1: An Unparalleled Winter Storm Hits Texas Setting the stage for the events of last week was a winter storm the likes of which most Texans had never experienced. Record-cold temperatures were experienced, reaching lows of -19oF and experiencing the coldest three-day stretch in recorded history, including snow hitting 246 of Texas’s 254 counties. As is predictable when temperatures drop so severely, especially in locations where such weather is not regular or expected, the demand for electricity shot up. People were staying bundled indoors and cranking up their seldom used haters. At the high point, power demand reached an astronomical 69 Gigawatts on Sunday, setting the stage for a crisis. The total consumption would have no doubt increased into even further unprecedented territory, but as rolling blackouts were instituted and power was lost, the heights of demand were never possible to be reached. Further, because of the deregulated nature of the Texas grid, supply and demand will move prices and the great strain saw wholesale prices spike to as high as $9 per kilowatthour (compared with a typical price of $0.12 per kilowatthour), prompting more customers on the grid to simply turn to turn off their power (and thus preventing the strain from getting even greater). Grids all over the country, and indeed the world, are built to withstand the occasional unexpected jolt in demand. That’s the reason that peaker plants exist—they are designed to come online quickly and reliably when a spike in power demand outpaces what was planned for a typical day on the grid. Unfortunately, when the conditions that cause the power demand are also taking sources of generation offline, the risk gets compounded. And that’s exactly what happened in this scenario. Step 2: Generation Gets Knocked Offline In assessing the drop in generation capacity on the grid, one of the earliest scapegoats by some in the media was the renewable energy generation sector. In particular, wind turbines were reported to have frozen and become unusable due to the frosty temperatures. While turbine can be built to withstand sub-freezing temperatures, doing so costs money in hardening them with heaters and other provisions during installation. In the warm climate of Texas, these provisions were seen as not necessarily worth the cost to do so, leaving these turbines vulnerable and ultimately victim to the freezing temperatures. It’s reported that the 22 gigawatts (GW) of wind capacity was hit hard from icing on the turbines and low wind conditions, with 4 GW of wind capacity taken offline because of the conditions. Losing this amount of capacity was indeed more than the Electric Reliability Council of Texas (ERCOT) had planned for in their extreme planning scenarios, but in fact when grid operators studied and practiced for worst case scenarios it was always assumed that wind would be the first resource to drop. In its place, Texas grid planners long expected the state’s wide base of natural gas would be there to pick up the slack. But unfortunately for Texans, in this instance the base of natural gas generation was unable to step up. In the early days of reviewing what happened, it was found that the loss of generation from thermal generation (i.e., central power plants that burn fuel, whether gas, coal, or otherwise) created the greatest shortfall in being unable to meet power demand. The natural gas generators in the state, for example, got hit the hardest as freezing temperatures shut down their cooling systems and instrumentation that are required for proper operation. At the most severe moments of the crisis, 26 GW of the state’s 34 GW of natural gas generation was unavailable and had mostly stayed that way through Tuesday. When it comes to peak demand, gas is often relied upon as the go-to resource that’s easy and quick to ramp up, especially in a state where the fossil fuel industry has such a massive presence, so the unexpected loss of three-quarters of the built gas capacity was devastating. Similarly, some nuclear generation was taken offline, but to a lesser extent, as equipment failures would not allow for the safe operation and so generation had to be paused. The same happened with numerous coal plants as well. When it came to the loss of generation, the early finger pointing at some sources of generation over others was unfair as they all struggled in these elements and the market forces across the state restricted real-time solutions. All told, ERCOT was only able to generate 45 GW as of Tuesday, well short of the continued demand from a freeze-stricken population. In planning for potential generator outage, which will always happen even on a perfect system, ERCOT’s ‘extreme’ outage scenario assumed just 14 GW offline at a given moment and planned around that type of crisis. In this storm? The most severe moment saw 43 GW (including plants offline for scheduled maintenance) dropped. In other words, the loss of generation capacity was three times worse that the “worst-case scenario” the grid had been planned for, and disaster was inevitable. Step 3: Electricity from Neighboring Grids is Unavailable For many U.S. grid systems, a common tactic to take when there’s a generation shortfall and demand is surpassing available supply is to tap into the excess generation from neighboring grids. However, ERCOT and the Texas grid operate mostly in isolation from its neighboring grids. Texas is unique in that respect, with the only other North American grid operating separate from larger neighboring grid systems being in Quebec. There are a handful of neighboring interconnections with neighboring grids, but they are more noise than anything in the grand scheme of things and cannot operate at the scale to import the type of power that was needed last week, even if it were available (which it wouldn’t have been, as those other regions were experiencing similar cold snaps that were straining their demand, but to a lesser degree than in Texas). With no outside sources of generation available to makeup the shortfall the ERCOT grid was experiencing, there was really only one outcome that could be expected: power outages. In anticipation and to try to spell the grid from wider failure, Texas official instituted rotating blackouts. A rolling blackout is where a certain portion of the population would have power cut for a designated period of time so demand didn’t outpace the available supply, and then when power was restored to those places another portion of customers would have their power turned off. This enforced demand management is a common strategy during periods of excess strain to prevent further grid collapse, but unfortunately for Texas it simply wasn’t enough. Put it All Together, And the Result is Turmoil Take these three factors happening in real time during last week and together the result is obvious via simple arithmetic. As Princeton University Professor and electric grid expert Jesse Jenkins noted as he tracked the situation for the Twitter-sphere: The emergency rolling power outages instituted by ERCOT reached about 20 GW at their peak on Tuesday, though as previously mentioned they likely would have needed to be even greater if the resulting price spike didn’t already force many customers from flipping the switch off. Moving Forward: What Policies, Mechanisms, and Technologies Must Be Put in Place to Prevent This From Happening Again? By Wednesday morning, the worst of the storm appeared to be in the rearview window, and capacity was steadily coming back online. The fact of the matter is that Texas is not in a unique situation when it comes to geography, resources, or governmental structure. Each of the characteristics that factored into the events of mid-February 2021 are replicated elsewhere: Canada, for example, is another deregulated power grid that frequently gets hit with severe winter conditions, but nothing of this scale has ever happened. Winter weather doesn’t lock up generation in other cold regions (don’t believe it? See the wind turbines that power labs in Antarctica for evidence that they can work in the most severe conditions). The utility sector will regularly experience unplanned outages of generation for any number of reasons without severe grid shortfalls. Whereas California wildfire-caused outages have their own means of resolution, and Michigan underwent unexpected gas shortages during severe winter storms in 2019, as two prominent examples, the Texas situation got out of hand quickly and now the nation’s attention is on the utilities and regulators to put it all back together, and expectations are to do so with long-term solutions, not Band-Aids. But why was Texas different? Experts have chimed in to note that what happened in Texas was the unfortunate perfect storm (no pun intended) of factors that created a cascading domino effect of challenges. Early in the crisis, the Texas Governor placed the blame on the generation power plant owners, saying: “We need to calibrate for this type of weather to make sure that the companies that are contracted with to provide the power generation in the state of Texas are going to be capable of providing power generation in these ultra-cold temperatures.” That’s certainly one area that will receive intense focus in the coming weeks, months, and beyond, as grid operators and government officials ensure the once in a century storm is carefully planned for. Unfortunately, the trend of climate change means that weather extreme events will become not only more common but more severe, and across the world the once in 100-year event is starting to happen multiple times in a decade. Planners across the industry are going to have to start reevaluating their risk assessments, planning for the possible events, not just the likely; they must elevate risk of the impossibly rare events to risk of the potentially possible. After a 2011 winter storm created similar issues, but on a much smaller scale, policymakers in the state put forth winterization regulations to prevent these generator failures, but in the most major test of the results of that policy since then, generators far and wide appeared to fall short. Greater oversight, regulation, and requirements may just be on the menu in Texas. The fact is, while the scale of this event is immense and the fallout has been borderline unthinkable, grid operators have dealt with similar situations in the past. Lessons can be learned about recovery and prevention in the past. Take, for example, the report from PJM about their assessment after cold snaps caused similar issues in the past decade, and the FERC review of ERCOT’s 2011 outages for a taste of what’s likely to come. In the weeks and months to come, expect to see much discussion about what makes the present-day grid system of Texas different from other grids that didn’t crumble. The solutions aren’t necessarily short term and what should have been done in the moment during the crisis, but rather reevaluating the market design and incentives for what’s being built in Texas. Generators and grid participants aren’t paid for the capacity to generate, and thus the rush to make the lowest cost generation (regardless of capacity, baseload capability, and run-up time) is all that’s moving the market. Reliability isn’t compensated as much as generation. And in the deregulated market that’s isolated from neighboring grids, the challenges get multiplied compared with other grids. The solutions aren’t necessarily going to be quick, obvious, or easy, but the coming months will prove instructive as to how stakeholders and leaders in the state value reliability, resilience, and ability to prevent this type of situation again. Remember that the extreme outage scenario planned for by ERCOT was 14 GW and triple that was knocked offline. Regulators and policymakers will need to wrestle with how those assumptions should be altered, how they can use market scenarios to rebuild the grid in a way that prevents this from happening again during the next winter storm, and when all that is done work to convince the Texan population that was let down that they can once again rely upon their power providers to not leave them out in the cold.


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