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Aerial view of Texas covered in snow during the 2021 blackout

Lessons from the Texas energy grid failure

Could distributed energy systems have prevented the Texas blackouts?

When Texas experienced record cold in February of 2021, demand on the grid peaked to 69,150 MW as Texans tried to stay warm. Then, it all went dark. Large power plants tripped off-line late Sunday night into Monday morning. And a new and alarming state record for energy demand was set.

The Electric Reliability Council of Texas (ERCOT) initially predicted winter demand to peak at 57,699 MW. As a result, the record energy demand from the storm was met by significant power supply shortages. Over 46,000 MW of thermal, coal, nuclear, solar and wind energy was lost. ERCOT stated 28,000 MW worth of coal, natural gas, and nuclear plants failed. And, 18,000 MW worth of solar and wind generation came to a grinding halt. 

Texas is a state built on oil and natural gas energy. And is more accustomed to mild winters and hot summers. Its local oil and gas infrastructure was not designed with the proper pipe and valve insulation for extreme cold temperatures. As the temperatures dropped in some regions to -11°F, oil and gas wells, pipelines and valves froze over. When the power stopped, demand for natural gas increased so people could stay warm. But there were shortages across the system as a result.

When the power stopped, demand for natural gas increased so people could stay warm. But there were shortages across the system as a result.

When asked about the severity of gas shortages, and why the Texas gas plants couldn’t get enough gas from the network to generate electricity, Joshua Rhodes, an energy researcher at the University of Texas, was quoted by the Austin American Statesman stating, "The whole system isn't really set up to deliver what we're demanding of it. The major difference between what happens in the summer and what's happening now is competition for natural gas. If too many people are trying to consume natural gas it can depressurize the lines and if that pressure drops too low, they're no longer able to operate.”

Moments before the failure of the grid, ERCOT instituted its highest energy emergency alert. It called on utilities statewide to begin controlled blackouts. These controlled outages occur when utility companies need to intentionally turn off parts of the grid. Often referred to as ‘rolling blackouts,’ they are a last resort to prevent a total loss of the entire system.

As a result of rolling blackouts in Texas, 4.3 million households and businesses lost all power.

Cactus plant covered in thick snow

Beyond the freeze

The outages and freezing conditions will have consequences for some time. Boil water advisories from authorities remain intact. FEMA is releasing aid to businesses and residences for burst pipes and damaged machinery. Dozens of people have died. And many are suffering from carbon monoxide poisoning and other indirect impacts from the disaster.

What’s more, food shortages may also be felt across Texas because of the impact the outages and storm had on farming and agriculture. And industry, including Texas’s largest oil refineries, is facing what could be weeks of operational downtime as it fixes broken equipment. The impact on oil supplies and gas prices across the US is still unknown.

The outage will likely have long term implications on Texas’s natural gas recovery and cost. Liquified natural gas (LNG) for export has also ground to a halt in Houston, the world’s third largest LNG export hub. This has suggested global impacts on the supply and price of natural gas.

Operators have been working around the clock to minimize storm damage and keep power plants operational.

The entire experience has brought home the importance of improved extreme weather protection, resilient energy systems, and strong emergency operations protocols.

Distributed energy systems might have kept the lights on

Enchanted Rock, a Texas-based Microgrid firm, has approximately 200 microgrids across the state. It reports that 130 of their microgrids supplied energy to the grid during the Texas outages. Its customers were commercial stores providing essential food and medical supplies, and assisted living facilities.

Not only did microgrids keep the lights on, they were  affordable. Even when ERCOT’s wholesale power prices surged to over $9,000/MWh.

But the resilience of distributed energy systems depends on its ability to secure fuel. To secure natural gas for its systems, Enchanted Rock credits its good supply contracts, ability to take gas at low distribution volumes, and the Texas Railroad Commission’s decision to give generators a priority position for natural gas behind homeowners.

As the volatility increases, the insurance policy distributed energy systems offer may increasingly pay dividends in today’s power markets. Particularly with their ability to participate in market programs such as demand response, save on power bills, and provide resilience in all weather conditions.

More microgrids will also help community resilience. When powered by microgrids, critical facilities such as hospitals, aged care facilities, pharmacies and fire houses take demand off the grid, reducing the stress on the community.

The financial impact the forced shutdowns caused on the hydrocarbons, manufacturing, refining and chemicals industries may encourage industry players to invest in site-base microgrids. Or, group together at scale to form industrial hub-based distributed energy systems. These could provide insurance against future extreme weather events, while allowing the industry to evolve its energy mix.

Where does the grid go from here?

Distributed energy systems containing customer-scale microgrids can be more reliable than a large centralized power plant. They allow people and organizations to take control of their energy generation, providing a high level of certainty during unpredictable weather events. However, distributed systems owners must consider what insulation, de-icing, and weatherproofing they need as the weather becomes more unpredictable.  

Planning based on historical events and demand will not prove sufficient against changing weather patterns.

One of the most important lessons for grid operators to take away from the Texas blackouts is that planning based on historical events and demand isn’t sufficient against changing weather patterns.

Distributed energy systems can help system operators and utilities keep costs from soaring. They can provide cost-effective alternatives and strengthen the grid against storms. And ultimately, they can ensure enough peak generation.

For now, FERC and NERC are opening inquiries into all the impacted regions including ERCOT, SPP and MISO. As we learn more about the reason for the outages and work to keep these catastrophic power events from happening, we must consider comprehensive grid planning and policy reforms to support more microgrid and distributed energy systems.

This article was developed by Advisian’s Distributed Energy Systems team. Alongside our colleagues at Worley, we are involved in several distributed energy projects around the globe.

See how Advisian is helping to shape the future of energy systems and the power sector as a whole:

Understanding distributed energy

Distributed energy resources (DERs) are power generation or storage assets sited locally, or onsite, at a home or business. They can include rooftop or carport solar, micro-wind, batteries, diesel generators, natural gas-based generators and more. Power from these resources is consumed by the facility first and if there is excess power it can flow back to the grid. The system is known as a microgrid when a group of interconnected loads (i.e. more than one building) and DERs with a clearly defined electrical boundary acts as a single controllable entity with respect to the grid.

Microgrids operate independently when the power on the grid goes out by providing black start capability to keep the power running. These systems have high capital costs but serve as good insurance policies to maintaining operational integrity during extreme weather events.

Illustration of a city connected
Headshot of Michelle Isenhouer Hanlin

Michelle Isenhouer Hanlin

Senior Project Lead, Smart & Distributed Energy

Michelle’s experience in the energy industry has concentrated on energy project development and execution and power and energy strategy development. She is experienced in both large-scale renewable energy and natural gas-based generation through to microgrid and smart building development and has supported the development of over 50 power generation and storage projects. Project and portfolio management activities include technoeconomic analysis, preliminary design optimization, regulation and policy analysis, technology and systems analysis, financial risk identification and mitigation, and extensive stakeholder engagement and strategy development. Michelle is an active participant in the distributed energy space and has spoken at major conferences and events on the ins and outs of microgrid and distributed energy system viability.