The Texas grid is designed to fail

“The culprit is pretty clear. Recent research has shown climate change made the South Asian heat wave 30 times more likely to happen, and it’s very likely the same will be true for the European and American heat waves. The peak of summer could be even worse. The National Oceanic and Atmospheric Administration (NOAA) predicts above-average temperatures in June, July, and August for most of the lower 48.

Texas may be the most vulnerable of those 48. Most states in the continental US are connected to power grids that sprawl across state (and at times even international) lines. But Texas is, somewhat infamously, an energy island: It operates a power grid that’s mostly disconnected from the rest of the country. Depending on whom you ask, this has its advantages and disadvantages. Keeping the Texas grid disconnected from the rest of the country means it won’t fall under federal regulations, as grids that cross state lines do. But it also means Texas can’t borrow power from other states when its power infrastructure fails, as it did in February 2021 when Winter Storm Uri hit, knocking out power across the state for days. Hundreds of people died as a result.”

“A little over 20 years ago, Texas deregulated its energy market. And Texas is not unique in that; deregulation obviously has been kind of the story of American policy for decades. And it came to the electricity market in Texas, as it did to other states. But in Texas, it took a form that we do not see anywhere else. Essentially, they created a competitive market where supply and demand are the rule of the day. There’s no one power company that you go to, like there is in a lot of the country. You get these competing electric providers. But the real thing that makes Texas unique is that it is what they call an “energy-only market.”

In other parts of the country, a power plant, also known as a generator, gets paid to be around in case they’re needed. But in Texas, in an attempt to create this kind of perfect competitive market, they said, “No, you’re only going to make money by selling electricity at the time that it is needed, at its time of use.” So our generators only make money selling power on the market.

When you take that approach and you couple it with the law of supply and demand, what you’re doing is you’re creating a system that is run on scarcity. The less electricity that is available, the more expensive it will be. So in our market, we created a system where power plant operators make their margins by relying on moments of extreme scarcity that will drive up the price of electricity. And this will be their big payday. These moments may only come a handful of times a year but this is where you make your money.

Proponents of this market said that it incentivizes efficiency. Like, you cut out all the fat, and you don’t have any electricity generators that are getting paid to just sit around. They would claim that that creates an efficient market. The reality, though, is that when you need extra power on hand, you have less of it available.”

“One of the things that’s been really wild for me to see happen in the aftermath of the 2021 blackout is the rhetoric around this market. I’ve been an energy reporter for years and years, and the Texas system was always held up as a kind of point of pride by politicians in power and regulators and industry people. We had this unique thing that was uniquely Texan and had created this efficient market. And in the aftermath of the blackout, it didn’t take long for a lot of the same people to suddenly start saying, “Oh, we have a crisis-driven market. We need to overhaul this market, we need to reform things so that it is now more focused on reliability.”

They were making all these promises they were going to change things. But — and this is where it gets really kind of confounding — they wanted to change things without actually overhauling the system. So their argument is that we are keeping our unique energy-only market, but we are also going to provide greater reliability within that framework. But the question right now is like, how do you do that? Or even, can you do that? I’ve interviewed a lot of experts in the world of energy that just are not buying it right now.”

” There isn’t just one fix. There are a lot of different things put together that could really help the situation. I think the most obvious one — the one that you don’t have to be a grid engineer to understand — is increasing interconnections between Texas and other neighboring grids. I’ve read very convincing analyses that say that if we were better connected, we still would have had blackouts in 2021 but they would not have been nearly as catastrophic as they were. They would not have lasted as long because after day one, maybe day two, we could have started pulling more power from other states and gotten people’s lights back on faster, and the kind of intensity of that disaster could have been muted.”

“I don’t want to be too techno-utopian about this, but investing in things like battery storage that would allow us to make renewable energy more dispatchable seems like a no-brainer. Building out solar is huge because we usually use the most electricity in the summer. And the conditions that drive that high energy use (i.e. the state being baked by the sun) are the exact same conditions that create a ton of solar electricity. So that seems like a pretty obvious one to try to meet that super-high demand.

Another thing is energy efficiency. The energy efficiency goals in Texas are lower than most other states, and increasing our energy efficiency goals and programs would really help with grid reliability, because it would decrease the spikes in demand. I’m thinking of everything from insulation to more efficient appliances to energy efficiency at power plants, because it takes so much energy to produce power or drill for oil. If you have a better-insulated home, you’re just not going to be running the AC the same amount even on a hot day, so in aggregate it can make a huge difference statewide. And it’s so much cheaper than anything else.”

https://www.vox.com/recode/23144696/texas-grid-energy-market-blackouts-heatwave-winter-storm

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