The world’s Energy Capital, Houston, just suffered one of the greatest energy failures in America with 4.4 million people left to face arctic temperatures with no heat, no light, little food, and freezing water lines. All of this is happening amid a pandemic.
The Texas Blackout of 2021 was primarily a human failure, not a technology, regulatory, or market failure that can easily be fixed with innovation, legislation, or policy changes. Texas needs new energy leadership.
We often take for granted how much of our daily lives depend on a massive complicated electrical grid that is simultaneously invisible and, on every power pole and in every room, visible with a light switch and electrical outlet. Behind this massive grid failure is a system that operates in real time, feeding off countless smart meters pulsing data in 15-minute intervals.
As a young law student in 1990, I clerked at the Federal Energy Regulatory Commission (FERC) under Texan Martin Allday, who was quick to point out that all other industries rely on the energy industry. Providing fuel for our lives and livelihoods in an economical and sustainable manner has been my passion and has taken me from FERC, to the Clinton-Gore White House, to the Department of Energy, and finally to Houston where I bring solar power plants to life and review financing of energy efficiency retrofits.
As the lights slowly come back on, what did and did not happen is being revealed. Texas has a unique grid, mostly independent from federal oversight, that blends various regulatory mandates with market forces. It runs through America’s oil patch while creating a benevolent environment for renewables. Texas is the sixth largest producer of wind power in the world, producing twice as much a California. Texas simultaneously rivals Saudi Arabia in petroleum production
Wind Turbines Icing Did Not Cause the Blackout
Let’s dispel some ideological myths about what caused this mess. Many anti-renewable conservatives were quick to blame a few wind turbines in north Texas for failing to produce their scheduled quotas and plunging Texas into the dark. This included Gov. Greg Abbott and Land Commissioner George P. Bush, who both reflexively blamed solar and wind, and praised fossil fuels. Abbott went as far as deriding the Green New Deal, which has not even passed Congress and was not embraced by President Joe Biden during his campaign.
Blaming the Texas power outages on things like the "Green New Deal" is like… is like… is like… Sorry folks, I don't have a folksy analogy. It's just plain dishonest, stupid, and dangerous. We need solutions based on science not sophistry.
— Dan Rather (@DanRather) February 17, 2021
The Texas grid operator, the Energy Reliability Council of Texas (ERCOT) expects wind generators to produce 7% of the grid’s winter needs. Abbott and Bush latched on to an iota of truth. Some turbines did ice up and go off-line because they did not have heating packages like wind turbines in more northern climates. However, the strong arctic winds meant that the turbines that did run exceeded expectations. During parts of February 15, wind actually doubled its expected contribution to the grid. Unfortunately, ERCOT needed six times that amount to meet demand.
Fossil Fuel Generators Failed to Winterize
As impressive as Texas wind production may be, wind is only 24.8% of ERCOT’s energy generation capacity. By comparison, ERCOT is dependent upon natural gas generation which is responsible for 51.0 percent of generation capacity.
There are a variety of ways freezing temperatures can foil gas generators, including not having equipment protected from freezing temperatures, but the inability to obtain pipeline supplies was the biggest problem during this disaster. Most natural gas is stored in the ground, though it can also be stored in pipelines through what’s called packing. Freezing temperatures can cause wellheads to shut, moisture in pipelines can freeze, and pumps often rely on electricity to move the gas
Furthermore, gas generators compete with businesses, homes, hospitals, and others who use natural gas to heat their structures in the winter. This competition does not exist during the hot Texas summers when air conditioner demand on the grid is typically high.
Federal Oversight of ERCOT Would Not Have Made a Difference
Frozen fingers are being pointed at ERCOT’s lack of federal oversight. Because the feds regulate interstate commerce, Texas avoids it by not integrating with neighboring independent system operators. Neighboring grid authorities were issuing the same emergency orders and implementing the same rolling blackouts as their energy generation failed. Federally regulated system operators fared only slightly better than ERCOT.
The second problem with decrying ERCOT’s status as an island onto itself is that the Texas grid is actually connected to its neighbors. But since ERCOT’s neighbors did not have much excess power to share so being more integrated and under federal jurisdiction would not have made any difference.
And finally, ERCOT does follow the national mandates and policies of the North American Reliability Council. ERCOT may not be directly overseen by the feds but it isn’t behind a moat and castle walls either. The truth is everyone struggled to keep the power on during this arctic blast, but some were better prepared than others.
That was the case with El Paso, which is in Texas, of course, but outside of ERCOT and part of a different grid authority. When freezing temperatures reached this corner of Texas, El Paso Electric was ready with additional crews on hand, enhanced weatherization, and a diverse portfolio of generation options. Ten years ago, a similar arctic storm hit the Texas grid. El Paso Electric learned it was not immune to Canadian weather and fortified its infrastructure. El Paso experienced only minor short-term blackouts.
Former Texas Governor and former U.S. Secretary of Energy Rick Perry has said the economic and physical pain of his fellow Texans is necessary to keep ERCOT from federal tyranny. The Public Utility Commission of Texas is equally capable of overseeing ERCOT to ensure adequate preparation and planning. Calls for federal oversight come from the failure of state energy leadership to perform its public duty.
Deregulation Did Not Contribute to the Blackout
In 2002, Gov. Perry oversaw the deregulation of the ERCOT retail power markets. Here in Houston, I can choose where to buy my electricity. But deregulation has only reached 85% of ERCOT because municipal power companies and electric cooperatives were exempted. Consumers in Austin and San Antonio do not have retail choice. They must purchase their power from fully regulated Austin Power or CPS Energy. Yet, they suffered the same non-rolling blackouts that deregulated consumers faced. Deregulation had no impact on whether you lost power or not.
In 2019, CenterPoint Energy, the utility that maintains wires in the Houston area, sought a $161 million rate increase claiming the need for infrastructure enhancements for reliability and resiliency after Hurricane Harvey. Our state’s public utilities commission rejected its request and only approved a $13 million rate increase. The requested rate increase would have meant an additional $2.38 per month for most customers. Regulation only works if the regulators make prudent decisions.
Renewables and Technology Innovation Are on the Way
Natural gas is often promoted as the most reliable source, always there when the sun does not shine or the wind does not blow. During the winter crisis of 2021, renewables actually proved more reliable, even with the occasional frozen turbine. Unfortunately, there are too few installed. Solar remains a mere 3.8% of ERCOT’s generation.
ERCOT is actually expecting to put more megawatts of new wind generation online this year than new gas-fired generation.
One bright spot on the horizon is an impressive Sunnyside Energy solar farm being built in Houston on a closed landfill. When power generation is close to consumers, reliability improves dramatically. The developers, of whom I am one, are also exploring the installation of utility-scale batteries to provide power to the grid even when the sun does not shine. Like many solar farms being planned in Texas, it will not be available for a few years
Texas Has Been to This Rodeo Before
This crisis was not the result of a lack of transmission lines or generation. The infrastructure is already in place. This crisis was primarily the result of failed preparation and planning.
In February 2011, another polar vortex of freezing temperature descended upon much of Texas. Gas generators saw their equipment freeze and become unavailable. Then, wind generation was a minor portion of ERCOT’s capacity. The impact was blackouts impacting 3.2 million consumers that lasted hours, not days. ERCOT called on generators, gas producers, and wind turbines to weatherize their equipment. Not everyone complied.
Saying that the market does not compensate energy generators for investing in weatherization misses the reality. During the current crisis, prices jumped to the cap of $9,000 per megawatt hour from a pre-crisis average of around $30 per megawatt hour . If a generator could stay on line, it could earn a year’s worth of income in just two days. Bloomberg NEF calculated that “a 100-megawatt wind farm in Texas that might have normally made almost $40,000 over a two-day period in February could reap more than $9.5 million on Monday and Tuesday alone.” Normally, generators look to the summer peaks to harvest such profits. Generators who learned from 2011 and took steps to protect against freezing temperatures were rewarded this week.
A 2011 report chided ERCOT for inadequate reserves and for bringing them online too slow. It also stressed the importance of generators and pipelines weatherizing their equipment.
When did ERCOT realize the arctic blast of 2021 would be so frigid and so prolonged? Thus far, it seems like this realization came too late to adequately plan. Local weather reports forecasted a hard freeze coming as early as February 5, ERCOT did not inform the public of the need to conserve energy until February 14, although it publicly anticipated record demand on February 11.
— ERCOT (@ERCOT_ISO) February 11, 2021
Federal Energy Regulatory Commission, Governor Abbott, the Texas attorney general, members of Congress, and others are now calling for investigations of ERCOT and its leadership. There was a similar investigation and report following the 2011 storm and it, guess what, pointed to a similar arctic storm in 1989 and chided ERCOT for not being better prepared. A decade later, look for new investigations to reach the same conclusion.
New resilient and sustainable technologies are coming online, and regulatory and market changes can always stand to be tweaked. But the most immediate and impactful change must come from new energy leadership in Texas.