Everyone in Texas remembers the infamous Winter Storm Uri of three years ago. What started out as a simple cold snap for many quickly turned into something far more serious: the biggest power outage in state history, with billions of dollars in property damage and hundreds of lives lost. Since then, the expected arrival of frigid temperatures has been met with some trepidation, but the critical failures of February 2021 have so far been avoided in subsequent storms. In today’s RBN blog, we look at the steps the state has taken in recent years to weatherize its power grid, show why January’s cold snap turned out to be no big deal, and explain why renewables are playing an increasingly important role in grid reliability during extreme weather conditions.
Let’s start with a quick review of how unique the Electric Reliability Council of Texas (ERCOT) power grid actually is. Operating independently from other neighboring grids, ERCOT delivers electric power to more than 26 million Texans, or 90% of the state’s electric load. And unlike most regions, Texas does not have a capacity market for electricity. Instead — as we detailed in Which Way Does That Old Pony Run — ERCOT is an energy-only wholesale market, which means that generators are paid only for the energy they provide to the grid, with few exceptions. (In a capacity market, power generators are compensated for committing that their plants will be available to provide electricity during a specified period.)
Texas produces more electricity than any other state, generating almost twice as much as second-place Florida, with nearly half that generated by natural gas-fired plants. But while Texas is the nation’s top electricity producer, it is also the largest electricity consumer, in large part because its industrial sector, including refineries and petrochemical plants, accounts for more than half the state’s energy consumption. Electricity demand in Texas continues to increase thanks to a rapidly growing population, the continued electrification of homes and vehicles, the arrival of power-intensive cryptocurrency mining, and the state’s unpredictable (and sometimes extreme) weather in the summer and winter months. ERCOT set 10 all-time demand records during the sweltering summer of 2023, as shown in Figure 1 below, and annual peak demand has jumped nearly 50% since 2000, reaching 85,508 MW in 2023.
Figure 1. ERCOT Annual Peak Power Demand Records, 2000-23. Source: ERCOT
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