Market history · Infrastructure ·
Winter Storm Uri: the Texas power grid fails
In mid-February 2021 Winter Storm Uri brought extreme cold to Texas, and from 15 February the grid operator ERCOT ordered 20,000 megawatts of rolling blackouts, the largest manually controlled load shedding event in US history, according to the joint report of the Federal Energy Regulatory Commission (FERC) and the North American Electric Reliability Corporation (NERC). More than 4.5 million people in Texas lost power, some for as long as four days.
The report found that freezing issues and fuel supply problems accounted for about three-quarters of the unplanned generator outages, with natural gas units accounting for 58%, and that supply of gas itself fell because of freezing at wells and processing plants. It made 28 recommendations, including on the winterisation of power plants and on coordination between the electricity and gas systems.
The storm showed how weather resilience, regulation and the link between power and fuel supply can decide the value of energy assets.
The takeaway
Essential infrastructure is judged by how it performs on its worst day. Resilience costs money, and so does the lack of it.
Sources
This is a retrospective about a past event, provided for general information. It is not investment advice, does not describe RockLake's positioning at the time, and past performance is not a guide to future performance. Read the risk warning.