Why Texas Lost Power

Debate continues over the cause of the extended power cuts in Texas last week. Predictably, party affiliation colors views. Republican Governor Greg Abbott said, ““the Green New Deal would be a deadly deal for the United States of America.” Two former Energy Secretaries, Rick Perry and Dan Brouillette blamed frozen wind turbines, and over-investment in renewables at the expense of ensuring more robust infrastructure.

It’s true that the extreme cold curtailed output from coal and gas power plants and even one nuclear facility. It’s also true that windpower works in cold northern latitudes. The state’s energy infrastructure just wasn’t prepared for such low temperatures. And the Texan power market, overseen by ERCOT, is a free-wheeling bazaar with hundreds of power providers all vying for business. Households routinely switch from one provider to another. As a result, the average retail price of electricity in Texas is 82% of the national average. But the market structure clearly doesn’t value 100% reliability.

Both of these problems – winterizing equipment and altering market incentives for power providers, can be fixed.

Texas generated 17% of its electricity from wind in 2019 (most recent figures available). They are easily the leading state. At 83 Gigawatt Hours (GWh), they are 28% of the U.S. total and well ahead of #2, Oklahoma at 29 GWh. Wind power in Texas has been widely regarded as a success.

Was over-reliance on wind power to blame, as Republican politicians claim? Or did the cold weather show no favorites, with natural gas, coal and nuclear plants all going offline as well?

Perhaps the chart showing power generation by source can be interpreted to favor either side, but an objective view would surely conclude that natural gas generation soared when needed, uniquely among all power sources albeit not by enough to avoid power cuts. Wind power became negligible. It’s hard to argue that more wind power would have solved this problem.

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Disclosure: We are invested in all the components of the American Energy Independence Index via the ETF that ...

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