Every power grid is a dynamic system with conditions constantly changing, and virtually every grid deals with strain at some point for one reason or another. As a business owner or project manager, the question to ask is whether–in totality, based on past experience, recent developments, and educated forecast–the grid is taxed to such an extent that you have cause to worry about the impact on your business. 

Using that standard, it’s clear that taking action to improve your power redundancy is not only prudent, it has become virtually a prerequisite to doing business in Texas, in our opinion.

Hurricane Ike

Although Hurricane Harvey in 2017 would be much stronger and deadlier, 2008’s Ike involved far more Texans losing power due to being primarily a wind event. Estimates range up to 4.5 million Texans who lost power, some for months after the storm made landfall. A report commissioned by Houston’s mayor in the aftermath found trees and limbs blown onto power lines and knocking them out were the biggest culprits for outages. 

As an example, major utility CenterPoint Energy said that although 90% of new residential lines were buried underground, the cost to move the remaining lines underground would cost $40 billion and was therefore unfeasible. That’s not even taking into account the existing distribution and transmission lines in the service areas.

Here are some of the primary culprits behind Texas’ grid instability:

Increase in Demand

Two of the five hottest Texas summers on record have occurred in the last four years. During Summer 2022, ERCOT’s peak demand record was broken no fewer than 11 times as residents cranked up air conditioners to keep cool. 

Twice in one week in July 2022, ERCOT resorted to issuing an appeal to residents to turn up thermostats and refrain from running major appliances during the hours of 2-9 p.m. to conserve energy. The Council cited record high demand, low wind for wind generation, forced outages in thermal generation, and cloud cover hindering solar power production. 

Texas’ grid also has more people and businesses than ever to sustain as the state led the nation in sheer numbers of resident growth from 2010-2020, with 4.2 million people moving in. Some of these new Texans work for cryptocurrency mining companies, which both local and state governments have courted with tax breaks and special power deals. These mining operations draw enormous amounts of power, and so many have moved here already that they may soon single-handedly demand as much power as the entire state of New York.

Outdated and Inadequate Infrastructure

Winter Storm Uri exposed the vulnerabilities of the Texas power grid that had actually been known for at least a decade but largely ignored. In the extreme cold, all sources of electricity generation–natural gas, wind, coal, nuclear, and solar–slowed, as pipes froze over and equipment malfunctioned. Ironically, many power plants run on natural gas, creating a closed loop in which the negative effects cascaded because each depended on the other and neither was sufficiently winterized.

Much-needed maintenance at power plants can help prevent outages due to equipment failure, but because the grid can’t spare the loss of power during high-demand periods, that maintenance can wind up being deferred. The result can be plants crashing anyway, usually at inopportune times. 

In the aftermath of Uri, ERCOT has changed the rules on power plant maintenance scheduling to give itself the ability to forbid a plant from going offline if ERCOT determines it a risk to system reliability, a move some say does not give plants enough time to perform necessary repairs. 

Growing Pains in the Green Transition

Even though Texas is already the top wind power-producing state and the #2 solar-producing state, development of more generation of both types of resources is ongoing. However, these “intermittent” energy sources are notoriously prone to volatility and their performance is dictated by the weather. 

At the same time, coal-fired plants and other traditional power plants that have delivered a large chunk of ERCOT’s capacity supply are being phased out at a rate that makes it difficult for renewable resources to fill the gap fast enough.  

Infrastructure is an issue here, as well, as the places where there is enough wide open land for solar farms and massive wind turbines tend to be far from urban areas from which the lion’s share of the power demand emanates. Getting transmission lines in place is a slow process of permitting and citing, and funding has been inadequate, as well. 

Uri illustrated in vivid detail what a problem insufficient transmission is when ERCOT curtailed production from renewables-rich areas to avoid exceeding capacity on the lines. 

In fact, ERCOT estimates it will need to restrict output from West Texas solar and wind farms by one-third by 2035 if significant changes aren’t made to the electricity delivery process.

Some steps have been taken to make power plants more prepared for weather like that seen during Uri, although some argue the Texas Railroad Commission, which regulates the gas industry, could be doing more to impose winterization standards. And although cold weather of that extreme was a rarity in balmy Texas, some argue extreme weather events are becoming more common and that the grid is ill-equipped to respond.  

It’s possible that the state could decide to connect to the nation-wide grids so that it could purchase power in times of need, but lawmakers have been resistant to forfeit what they see as energy independence to mitigate the relatively few times of crisis. As a spokesman for the Public Utility Commission of Texas (PUCT) put it in February 2022, “There are no plans to change the status of the grid.”

There are plans, however, to shore up the state’s generation sources. In 2021, $2,498 million worth of transmission projects were endorsed by ERCOT. And in the aftermath of Uri, charged by the legislature to take steps to prevent another disaster, the PUCT announced plans for sweeping changes to the wholesale electricity market for early 2023. 

Dubbed “the LSEO plan” (Load-Serving Entity Obligation), the proposal could bring an additional 2.5GW of gas generation online. However, it could also increase wholesale electricity costs by $22.5 billion from 2025 to 2030 without improving the expected pace of five outages every 10 years, according to a report commissioned by the Texas Consumer Association. For its part, ERCOT called the report “premature…conjecture.”

Ultimately, as the Austin-American Statesman pointed out, addressing the supply side is really only half the battle–the demand side must be addressed, as well:

Installing behind-the-meter power generation not only benefits all Texans by easing strain on the grid, thus making it more reliable, it delivers tangible benefit to your business. Many commercial enterprises opt for diesel generators for their rugged reliability and, with sufficient on-site storage, complete independence from utilities of any kind for days or even weeks, if necessary. 

Natural gas generators, on the other hand, offer better emissions performance and aside from (hopefully) rare instances, natural gas supplies are typically uninterrupted. Bi-fuel systems that can run on either fuel can offer the best of both worlds. 

And as solar panel systems, battery storage, and other power technologies are becoming more cost-effective, Texas businesses are able like never before to craft the backup power strategy that works for their budgets, their ESG goals, and their amount of confidence in the local grid.