Four minutes from a One Trillion Dollar catastrophe
As reactions to my recent article about the Texas blackout disaster has rolled in, it made me realize just how big a catastrophe we narrowly averted. It also has led to a bold idea of how we can solve a big piece of the problem, transition our electricity market to clean energy while increasing revenue, and firmly place Texas as the global clean energy leader.
First, let’s review what we avoided. The latest estimates indicate that economic losses from our seven-day cold weather spell already exceed $129 Billion. And the number keeps growing. For context, Hurricane Harvey, the largest previous economic disaster, was on the order of $20 Billion (2021 dollars). One hundred and twenty-nine billion dollars in seven days and the grid did not even collapse across Texas.
According to the people who were managing the grid during the crisis, Texas was four minutes away from a complete shutdown of the ERCOT grid. If that were to happen, those same people say it takes weeks to restart the grid. Weeks when about 26.8 million people (90% of the state is served by ERCOT) would have had little or no light, heat, refrigeration, water, or communication, leading to starvation, violence, uncontained fires, martial law, and destruction of the $1.9 Trillion Texas economy. And the impact would not stop at the border. Texas is the largest exporter in the US. The hit to the US economy would also have been staggering. The event would probably have made the terror of Covid seem mild.
We avoided this outcome, this time, by four minutes. Four. Minutes. But since that does not appear to be enough to change how Texas runs its electric market, how do we inspire our political leadership to recraft our energy system to remove the potential for a recurrence? In the words of our single remaining PUC Commissioner, Arthur D’Andrea, when asked why the PUC overrode the automatic market price during the crisis, “The market was killing people in their homes.…” The status quo is untenable.
One way to prevent a repetition is to dramatically overbuild solar, wind and storage to a level of 4 to 6 times what would normally be required to power the entire Texas grid 24/7, such that even with light winds and overcast skies, sufficient energy is available to power the state. Of course, this over-building is expensive because under normal conditions, much of it will be curtailed, and in the Texas market, curtailment means no revenue. So, there is no economic motivation to overbuild in this manner.
However, if we could find a way to sell the excess energy into another market, then we could sell it when we did not need it and reserve it for ourselves when conditions require. But because the ERCOT grid is an “island,” not connected to other markets, we do not have access to other markets to sell the excess power.
A similar situation existed back in the mid-2000s. Developers wanted to build wind in west Texas, a wind-rich area at that time with little population or electricity use. Because little power was used in the area, there were no major transmission lines to bring electricity generated in west Texas to the population centers. But because wind promised to be plentiful, reduce the cost of energy, and keep energy dollars in Texas, then-Governor Rick Perry supported a multi-billion-dollar plan to construct large high voltage transmission lines across the state to open west Texas wind to development. The lines were built, and Texas now has more wind than any other state (and solar is coming on strong). It has been a staggering success, though Governor Perry no longer supports it due to changes in ideology, despite the economic boom it continues to create.
Today, the idea of connecting the islanded ERCOT grid to the Eastern or Western Interconnection (the transmission grids that respectively serve the eastern and western halves of the US outside of Texas) is ideologically anathema to Texas leadership. They would rather Texans suffer than connect outside of Texas since that would result in Texas falling under federal FERC jurisdiction. But imagine that Texas did connect. Then wind and solar could be built in west Texas and many other locations to levels four, six or even eight times what Texas normally consumes. And whatever Texas was not using at any given time could be exported. Texas could expand our existing energy export business with a clean electricity export business, creating many great paying jobs, a secure and reliable Texas-powered electric system and a path for the energy transition.
Texas leadership should implement this to not only protect our historically low energy prices while also protecting a business-friendly environment that requires a firm electricity supply, but also to create a new energy market worth tens of billions of dollars. Not to mention, doing this would ensure we never come close to being four minutes away from total grid failure, and freezing people in their homes, again.
