By Catherine Traywick, Mark Chediak, Naureen S Malik & Josh Saul
February 20, 2021
The control room of the Texas electric grid is dominated by a Cineplex-sized screen along one wall. As outdoor temperatures plunged to arctic levels around the low-slung building 30 miles from Austin last Sunday night, all eyes were on it. The news wasn’t good.
Electric demand for heat across the state was soaring, as expected, but green dots on the corner state map started flipping to red. Each was a regional power generator, and they were spontaneously shutting down — three coal plants followed quickly by a gas plant in Corpus Christi.
Then another metric began to flash: frequency, a measure of electricity flow on the grid. The 60 hertz needed for stability fell to 59.93.
Bill Magness, chief executive officer of the grid operator, was watching intently and understood instantly what was at stake. Below 59 and the state’s electrical system would face cascading blackouts that would take weeks or months to restore. In India in 2012, 700 million people were plunged into darkness in such a moment.
Texas was “seconds and minutes” from such a catastrophe, Magness recalled. It shouldn’t have been happening. After the winter blackouts of 2011, plants should have protected themselves against such low temperatures. The basis of the Texas system is the market — demand soars, you make money. Demand was soaring last Sunday, but the plants were shutting down.
If insufficient power came in, the grid wouldn’t be able to support the energy demand from customers and the other power plants that supply them, causing a cycle of dysfunction. So over the following hours, grid operators ordered the largest forced power outage in U.S. history.
In fact, it was a crisis years in the making. Texas’s power grid is famously independent — and insular. Its self-contained grid is powered almost entirely in-state with limited import ability, thereby allowing the system to avoid federal oversight. It’s also an energy-only market, meaning the grid relies on price signals from extreme power prices to spur investments in new power plants, batteries and other supplies.
There’s no way to contract power supply to meet the highest demand periods, something known as a capacity market on other grids. There are no mandates or penalties compelling generators to make supply available when it’s needed, or to cold-proof their equipment for storms like the one that slammed Texas last weekend.
The generation outages were causing frequency to fall — as much as 0.5 hertz in a half-hour. “Then we started to see lots of generation come off,” Magness said.
To stem the plunge, operators would have to start “shedding load.” All at once, control room staff began calling transmission operators across the state, ordering them to start cutting power to their customers.
“As we shed load and the frequency continued to decline, we ordered another block of load shed and the frequency declined further, and we ordered another block of load shed,” said Woodfin, who slept in his office through the crisis.
Operators removed 10 gigawatts of demand from 1:30 a.m. until 2:30 a.m., essentially cutting power to 2 million homes in one fell swoop.
Power supplies became so scarce that what were supposed to be “rolling” blackouts ended up lasting for days at a time, leaving millions of Texans without lights, heat and, eventually without water. Even the Ercot control center lost water, and had to bring in portable toilets for its staff.
“It’s just catastrophic,” said Tony Clark, a former commissioner with the Federal Energy Regulatory Commission and a senior adviser at law firm Wilkinson Barker Knauer LLP.
By Friday, when Ercot declared that the emergency had ended, 14.4 million people still lacked reliable access to public water supplies, and the crisis had already cost the state $50 billion in damages, according to Accuweather. Meanwhile, some generators made a windfall as energy prices soared to $9,000 a megawatt-hour during the crisis. In all, generators have earned more than $44.6 billion in electricity sales alone this year — more than 2018-2020 combined, according to Wood Mackenzie. Those earnings don’t take into account any hedges that may have been in place.
Read the full article on Bloomberg