A review of the 2021 blackouts in Texas says the state has made improvements to ensure a stable electric grid in extreme weather, but the report says the grid "remains vulnerable." The Federal Reserve Bank of Dallas prepared the report.
"The Texas deep freeze in February 2021 exposed the inability of the state’s energy supply chain to withstand extremely cold temperatures. Nearly two years later, questions remain whether the electrical grid is now more resilient to winter weather," the report begins.
The report, written by Senior Business Economist Garrett Golding, says causes of rolling blackouts included natural gas and coal power plants forced offline because of equipment failures. Golding says wind speeds also dropped to "extremely low levels," and many turbines froze.
In addition to issues at power plants, the report says ERCOT included natural gas production facilities in rolling blackouts.
"A 'doom-loop' resulted for power plants unable to procure supply," Golding writes.
February 15, 2021, the Dallas Fed says power generation by natural gas, the largest source of generation in the state, dropped about 10,000 megawatts while demand increased by about the same amount.
"The situation did not significantly improve until temperatures rose above freezing four days after the event began," the report reads.
The Texas legislature approved updated weatherization standards in May of 2021. Since then, Dallas Fed says the Texas Public Utility Commission and Texas Railroad Commission have developed new requirements for production facilities and power plants.
The report encourages "proper regulatory enforcement and continued review and improvement of policies," saying natural gas production dropped 25% during the cold weather last month. The report cites information from S&P Global showing production was cut because wellheads were freezing.
"However, the cold front was nothing like the deep freeze of February 2021 with respect to how long very low temperatures remained in place and how much freezing precipitation fell," Golding continues.
The report says ERCOT will continue to be challenged to balance supply and demand, but the state has made "significant improvements" over the past two years. The report recommends a statewide incentive program when the grid is under stress instead of individual retailers offering deals.
The report also says bitcoin mining operations should work with ERCOT on response agreements during high demand.
Longterm, Dallas Fed says the state should consider enhanced energy efficiency standards for new buildings.
"There have been significant improvements to the Texas electrical grid over the past two years. However, the occurrence of no blackouts since February 2021 is a low bar to meet," Golding writes.
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