The Price of Electricity in Texas Maxed Out This Week
Unusual cold weather gave the state’s power grid a stress test. It wasn’t prepared.
10,000%: That’s how much the spot price of electricity in Texas spiked on Monday relative to pre-storm prices, according to Reuters.
As extreme cold temperatures hit the state last weekend and Texans turned on their electric heaters to stay warm, the state’s power grid — unprepared for the sudden cold — suffered a “black swan” supply catastrophe. Pumping equipment, fuel lines, wells, wind turbines, and everything in between froze up at the same time that the need for electricity spiked, leading to widespread blackouts in the state. That sharp and abrupt imbalance in supply and demand is what sent wholesale prices skyrocketing to $9,009.40 per megawatt-hour early Monday morning, a nearly 3,500% increase from the previous Friday, according to Bloomberg. Prices remained hovering near that peak as of Thursday afternoon.
Texas Gov. Greg Abbott was quick to politicize the disaster, blaming wind and solar power for the state’s blackouts, but he later walked back those comments since a natural gas shortage was far more to blame (the state, which has a deregulated energy market, gets 40% of its energy from natural gas). The Texas grid operator actually credited solar energy with helping the state restore power in some areas on Wednesday. With the state issuing boil-water notices, and deaths and hospitalizations from carbon monoxide poisoning mounting, and more than 500,000 homes and businesses still without power as of mid-day Thursday, it’s been a grim week for the Lone Star State.
Texas is showing us just how quickly a minor natural disaster can spiral into a major human-made tragedy.