The Lone Star State goes Dark

Texas is currently in the grid of a severe and lethal cold snap which has killed at least 21 people and crippled its electricity supply for more than two days. Shortages of up to 25GW of electricity have resulted in rolling blackouts amidst freezing sub-zero temperatures in a state known for its mild to warm weather and energy abundance.

The significance of the Texas blackouts for Australia could be more important than the California blackouts last August, caused by the continued replacement in the western states of the US of coal and nuclear generators with wind and solar, without adequate backup.

The relevance of Texas is not about renewables planning, but rather governance and market design.

Texas runs its own electricity grid, or at least the Electricity Reliability Council of Texas (ERCOT) does, supplying electricity to around 26 million customers with a generating capacity of around 82GW comprised of around 53 per cent gas, 24 per cent wind, 14 per cent coal, 5 per cent nuclear and 2 per cent solar.

Parts of Texas have recorded temperatures as low as -18 C since Monday as the result of an arctic outbreak which passed through Canada and into central US. At times the temperatures in Texas were reportedly colder than Alaska. Neighbouring states of Arkansas and Oklahoma have also been hit with electricity supply shortages and rolling blackouts.

US National Weather Service map for 17 February 2021. The pink areas are winter storm warnings.

The freezing cold snap drove up electricity demand and physically impaired some generators from operating. The worst hit were the state’s gas generators and gas pipelines, with ERCOT reporting frozen components at some gas generators forcing them to switch off.

Others couldn’t access enough gas because the freezing weather slowed or stopped gas production at wellheads not designed to operate in arctic conditions.  Some wind turbines also froze up in the conditions. In all, 16GW of wind is offline and around 30GW of thermal generation.

The state endured similar blackouts a decade ago when temperatures fell and further back in the winter of 1989, with calls to “weatherise” facilities to protect them against the cold. That costs money, takes time and forces units offline while the protective works are done. ERCOT said some protective measures were taken, but current weather conditions far exceeded their expectations.

The scale of the electricity supply shortage is substantial: Texas has been short of 15 to 25 GW of electricity for two days.

ERCOT runs an energy-only market with generators complaining for years that sustained low wholesale prices are exacerbated by new renewables generators and do not create sufficient commercial incentives to invest in additional capacity. There is talk there, as in the National Electricity Market in Australia, of shifting to capacity payments to get additional supply. That talk is likely to amplify as Texans re-examine governance of their energy-rich state.