Originally published February 26, 2021
On February 16, as many as 4.5 million Texans, or about 1 in 6, were without power as the state plunged into record sub-freezing temperatures. For a state that prides itself on energy production and independence, the sudden inability to supply enough energy represents a catastrophic failure: people froze, water infrastructure was incapacitated, and at least 80 people died. In the aftermath, millions faced water-boil advisories, and some Texans have received power bills equivalent to what they “would normally pay over three or four years.”
Finger pointing started almost immediately, with conservative voices blaming renewable energy, especially wind, and left-leaning voices clarifying that natural gas, the state’s dominant energy source, had lost far more capacity than any of the other power sources. Others cast doubt upon ERCOT — the organization that runs the state’s power grid — for a seeming inability to meet demand and protect Texas’s consumers both from the cold and unprecedented prices.
What actually happened in Texas? This week, The Factual uses 27 articles from 18 sources across the political spectrum to look for an answer. In the end, the organization of the state’s power resources and grid, rather than the merits of any particular energy source, seem to bear the majority of responsibility.
Was Renewable Energy Responsible?
The rapid transformation of a climatic crisis into a political battleground began with a salvo of accusations that renewable energy sources were responsible for the power grid’s collapse. Frozen wind turbines, plastered across some news sites, supposedly bore responsibility.
To be sure, many of the wind turbines in Texas are not winterized, meaning they lack heated or protected elements that permit continued operation in freezing temperatures. As a result, some wind facilities slowed or stopped their production of electricity entirely. Critics missed, however, that wind was only expected to account for less than 10%, or 6,000 megawatts (MW), during winter production, when Texas relies mostly on natural gas. At its lowest point, it looks like about 2,000 MW of that went offline, while up to 29,000 MW from natural gas, coal, and nuclear went missing — a third of ERCOT’s total production capacity. They also missed that wind’s shortfall was only intermittent, with offshore turbines causing wind generation to exceed expectations during periods of the storm.
In short, the missing wind energy only accounted for a small portion of the overall missing capacity that led to Texas’s power outages. Natural gas, coal, and nuclear were to account for 80% of wintertime production and were experiencing similar or greater levels of failure. Afterwards ERCOT noted, for example, that “wind turbine outages have been responsible for less than 13% of Texas’ total power shortages.”
As critics used the incident to ridicule wind technology, and renewables at large, they neglected to mention that wind turbines in other parts of the world, like the North Sea, are designed to function at freezing temperatures and regularly do so without issue. The lack of winterization in Texas represents a choice by Texas’s energy producers, not the type of energy itself, and ERCOT was well aware that only a fraction of wind capacity would be available in winter months.
This combination of factors shows that the responsibility for the bulk of Texas’s power outages, instead, lies elsewhere.
Does Blame Fall on Natural Gas, Coal, or Nuclear?
It’s easy to turn around and then heap blame on failures in thermal energy sources, and especially natural gas, which nominally accounts for around half of all power generation in the state. Just as frigid temperatures were negatively impacting wind turbines, they were causing major failures for natural gas, coal, and nuclear energy. Given Texas’s abundance of energy resources, natural gas is pumped up from the ground as needed, but these pumps failed, as did a whole range of equipment needed to keep the system moving. Likewise, coal plants saw their production capacity fall, and a nuclear reactor shut down entirely.
In a sense, natural gas, as the state’s largest energy provider and experiencing the greatest reduction in capacity, bears more responsibility than any other energy source. But blaming a reliance on fossil fuels for Texas’s troubles is just as short-sighted as blaming renewable energy. During normal times, natural gas is lauded as a reliable, cheap, and abundant energy source, and it is the cornerstone of the state’s ability to supply electricity to nearly 30 million people. Shortcomings of natural gas in terms of contributions to greenhouse gas emissions are clear, as with other fossil fuels, but nothing inherent to fossil fuels made them more or less likely to fail during the record cold temperatures.
The failure, rather, seems to be systematic and organizational, not specific to a singular energy source.
The Need for Winterization
The more likely culprit is a lack of winterization standards in Texas’s power grid as a whole. Texans are well-known to value independence and freedom from regulation, so much so that their power grid is disconnected from the rest of the U.S. The laissez-faire approach has purported benefits, like lower prices, but also limitations.
National bodies, like the Federal Energy Regulatory Commission (FERC), can only make recommendations for how the state should deal with energy issues, including winter preparedness. In the aftermath of cold temperatures in 2011 that caused similar but less severe outages, FERC undertook an investigation of what went wrong, eventually highlighting a lack of winterization and emergency storage in natural gas plants as the primary cause. It then provided plans for mitigation strategies to Texas energy producers.
Fast forward 10 years to 2021, and Texas’s energy producers can produce affidavits of winterization, but that concept doesn’t contain specific, enforceable steps at the state level as they do elsewhere. Without such standards, “state utility regulators have issued only three fines ever related to inadequate weather planning by power generators.” This means the natural gas network once again found itself unable to cope with cold temperatures — sufficient gas couldn’t be pumped from the ground due to failing equipment, emergency above-ground reserves were scarce, and gas distribution networks stopped working. The same goes for wind turbines, which weren’t prepared to operate in such low temperatures.
In Texas’s open and unregulated market, the desire to produce energy when it is in greater demand, like during the winter, when there are fewer sources of supply, is intended to incentivize winterization — producers that continue operation in winter are rewarded by higher prices. Yet as energy producers sought greater profits, the extra cost of winterization precautions was deemed prohibitive, especially given the infrequency of extreme cold weather. In this way, the incentive for profit, not something specific to any energy source, seems to be the key to the grid’s lack of preparedness.
While there’s no guarantee that improved winterization standards would have forestalled all power outages, they would have at a minimum enabled better outcomes, with less lost capacity, shortened power outages, and probably fewer dead.
A System Meant to Benefit Texans Ended Up Hurting Them
Adding insult to injury, many Texans now face sky-high energy bills in the aftermath of insufficient and intermittent power, courtesy of the energy market’s design. The ERCOT grid allows consumers to choose between variable and fixed rates for energy consumption. A variable rate allows the cost of electricity to follow supply, while a fixed rate means customers pay the same amount regardless of how much electricity is available.
The variable-rate system, which can lead to prices as low as 2 cents per kWh, gave way to unprecedented prices as supply dwindled. This led customers, including single households, to pay as much as $9 per kWh, an arbitrary cap imposed by ERCOT. For context, the average retail cost per kWh varies by state but is generally around 11 cents and averaged 8.6 cents in Texas in 2019, and the average home consumes just under 900 kWh per month. Had the cap not existed, customers could have paid even higher prices. Energy retailers, such as Griddy, warned customers that higher than normal prices were anticipated, but switching companies before the storm proved impossible for most. This led to headlines like “Texas: Army veteran faces $16,000 bill due to rocketing energy prices.”
For some, this failure represents the duplicity of leaving a critical utility up to market forces. In seeking to protect the freedom of energy producers from federal regulation, Texas ultimately ended up curtailing the freedom of everyday Texans — for some by making electricity unaffordable, for others by effectively taking away that access, and the freedom to power and heat one’s home, entirely. It’s easy to see overregulation as a burden, but in this instance, there’s a clear rationale for how an absence of regulation made an extreme weather event worse. Indeed, it likely cost some Texans their lives.
Now, amid the scrutiny on the system’s lack of regulation, Texans may also be reconsidering the merits of deregulation. An analysis from the Wall Street Journal in the aftermath of the crisis even casts doubt on the purported low costs of such a system, finding that “deregulated Texas residential consumers paid $28 billion more for their power since 2004 than they would have paid at the rates charged to the customers of the state’s traditional utilities.”
The rapid politicization of Texas’s weather troubles seems on par with the partisan tensions that epitomize the beginning to 2021, and here, as elsewhere, it pays to be mindful of political narratives that can obscure the truth.
The accusation that renewable energy drove Texas’s power outages is a false flag, but placing blame on fossil fuels may be similarly unhelpful. In the end, nearly any energy source could have been dominant and Texas would have seen a similar crisis — not because of the inherent characteristics of a particular energy source but because of the severity of the weather event and the brittleness of the grid’s overall design.
Originally published at https://blog.thefactual.com.