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27 Sep, Wednesday
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Bull Trader USA

: Texas and Midwest U.S. at risk of winter blackouts if another deep freeze hits, watchdog warns

Power grids stretching from Texas to the Midwest are at risk of shutting down if a prolonged deep freeze hits this winter, regulators warned Thursday.

The main Texas grid, which is unique in its state-run, and not regional, format, could see a power shortfall of 37% in extreme conditions, the North American Electric Reliability Corp. (NERC) said in a report Thursday.

NERC’s outlook suggests the state that left 40% of its residents freezing and in the dark during a cold snap last winter isn’t prepared for a repeat.

Widespread outages in Texas remain a “valid” concern, John Moura, director of reliability assessment and performance analysis at NERC, said in a media briefing Thursday.

“The industry has done a tremendous amount of what they can, but there is still work to be done to make sure they are resilient to these weather patterns. It’s going to take more than one year to build that,” he said.

Texas’s February outage left more than 200 people dead and rang up $20 billion in damage. Fossil-fuel backers pointed to the rising use of intermittent wind power, which generates 23% of Texas’s electricity. Others said natural-gas machinery was frozen under the extreme conditions.

Plunging natural-gas production was one of the leading causes of gas-plant outages in Texas, according to a separate report NERC released.

A Texas Monthly article explored “the backward-looking regimen that state energy officials use to forecast the weather— a methodology that minimizes the effect of such intensifying factors as climate change, which scientists say can make winter storms more brutal.”

Read: Texas governor says new laws fix power-grid problems, but experts disagree

NERC also said extreme weather driven by climate change tested power networks like never before, and could be tested again, using up what historically had been ample supplies. In fact, Thursday’s report is the first to look at how resilient grids are to extreme weather events. In the past, NERC measured reliability based mostly on how much capacity was available, including reserves. 

OpinionAfter power outages end, Texas must debate its electricity independence

Right now, supply issues are another factor, according to Thursday’s NERC report. New England and the U.S. Southwest, including California, are particularly vulnerable to natural gas

shortfalls. And some generators have told NERC that they aren’t expecting additional coal deliveries for the rest of this year because of railroad constraints.

Read: Expect 2022 to be a record year for wind and solar power, S&P Global says — but what about supply-chain bottlenecks?

The U.S. power grid is becoming less resilient and reliable, with extreme weather leaving more Americans without electricity more often over the past several years, analysts for Fitch Ratings said at a conference earlier this month.

Weather accounted for 25% of utility company credit downgrades from 2017 to 2021, the analysts said during a presentation at the Edison Electric Institute Financial Conference.

Extreme heat could also test the U.S. power grid. In Texas over the summer, conservation warnings were issued as citizens braced for a warm-weather test of its power system.

“Climate change is expected to continue to challenge electric reliability,” Fitch analyst Barbara Chapman said at the event, according to Bloomberg News.

Climate change and the weather extremes that come with it have revamped calls for a more resilient national power grid, one that’s smarter and reactive to both supply and demand.

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