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Blackouts Hit 13 States Beyond Texas in Deepening Power Crisis

People cross the street as snow falls in North Bergen, New Jersey on February 7, 2021. Photographer: Kena Betancur/AFP/Getty Images

Blackouts are spreading across the central U.S. as an energy crisis that has already brought Texas’s power grid to its knees deepens.

By Javier Blas, Brian K. Sullivan and Naureen S. Malik

Word Count: 1141
(Bloomberg) — 

The Southwest Power Pool, which controls a power grid spanning 14 states from North Dakota to Oklahoma, ordered utilities to start rotating outages, after exhausting all other options to protect its massive system from failing amid an unprecedented cold blast. Millions of homes and businesses in Texas are already without electricity, and the grid operator there has warned they may be in the dark through Tuesday as temperatures are forecast to remain low.

“It’s a step we’re consciously taking to prevent circumstances from getting worse, which could result in uncontrolled outages of even greater magnitude,” Southwest Power Pool said in a statement Monday. “In our history as a grid operator, this is an unprecedented event.”

The brutal cold striking Texas — ironically the capital of the U.S. energy industry and home of some of the world’s largest oil and gas companies — is emblematic of a world facing more unpredictable weather due to the rising impact of climate change. The outages underscore how as the globe moves away from fossil fuels into an all-electrified system that relies more and more on renewable energy, the grid becomes more vulnerable too.

Such weather conditions are very rare in much of Texas, and they have unleashed chaos on the ground. In Houston, the state’s largest city, roads are iced over and there are long lines to refill household propane canisters. Firewood is selling out.

Besides the human impact, the cold is wreaking havoc on the energy industry itself. Oil production in the Permian has dropped by 1 million barrels a day, helping U.S. crude prices to trade above $60 a barrel for the first time in more than year. The region’s industrial plants built to cope torrid summers rather than arctic weather, and the biggest U.S. oil refinery went offline on Monday, reducing the supply of gasoline and other fuels.

Large swaths of Dallas, Houston and other cities have been plunged into darkness as extreme cold and surging demand for heat pushes generators to the brink. The outages began as controlled, rolling power cuts but have cascaded into prolonged blackouts in some areas.

“We anticipate we will need to continue these controlled outages for the rest of today and perhaps all day tomorrow,” Dan Woodfin, a senior director for the Electric Reliability Council of Texas, which managed the state’s power grid, said during a briefing Monday.

In the last six months, extreme temperatures have led to rolling blackouts in the two most populous U.S. states. In August, California grid operators shut off power when record heat push demand beyond capacity, and now Texas’ record cold has led to the same result.

The extreme cold appears to have caught Texas’s highly decentralized electricity market by surprise. Power plants with a combined capacity of more than 34 gigawatts were forced offline overnight, including nuclear reactors, coal and gas generators and wind farms, Woodfin said. It’s not clear why, he added.

Wind power in particular appears to have been a major victim of the weather conditions, with turbine blades rendered inoperable due to ice, a phenomenon that reduces efficiency can ultimately stop them from spinning. Wind generation has more than halved to 4.2 gigawatts.

Power is going to continue to be cut across the state through Monday and potentially into Tuesday morning until enough generators come back online, Woodfin said.

“Every grid operator and every electric company is fighting to restore power right now,” said Bill Magness, head of the Electric Reliability Council of Texas, which runs the state’s grid.

These are the first rolling blackouts caused by cold weather since 2011 in Texas. Spikes in electricity demand usually happen in summer in Texas when air conditioning use rises. A loss of frequency on the grid has caused 30 gigawatts of generation to halt. Many stations will have been undergoing scheduled maintenance, leaving the grid more exposed during unusually large spikes in demand.

Parts of Texas were colder than Alaska, according to the National Weather Service. The temperature at 5 a.m. in Houston was 18 degrees Fahrenheit, matching the reading in Anchorage. In the Dallas-Fort Worth area it was 5 degrees Fahrenheit.

Frigid temperatures and a parade of storms in the U.S. follow other instances of extreme winter weather this year that have snarled ports and upended energy markets in Asia and Europe. Texas, which isn’t accustomed to winter’s full fury, is getting a big taste. President Joe Biden declared a state of emergency, mobilizing federal assistance to aid local response efforts.

Power crunch

The average spot price for power across the Texas grid hit the state’s $9,000 per megawatt-hour price cap shortly after 9:30 a.m. local time. LNG exports from the U.S. also plummeted after the freeze shut ports and wells, and oil production also took a hit, with Permian oil production plunging by as much as one million barrels a day. West Texas Intermediate futures rose by as much as 2.5%, above $60 a barrel for the first time in more than a year.

Cold Weather Cuts Permian Oil Output by 1 Million Barrels a Day

The cut to crude supplies is threatening to unleash a rush for everything from propane to heating oil, fuels that are used in mobile heating devices.

Odessa in West Texas, one of the largest cities in the Permian Basin, still has power, but San Antonio has lost power with rolling blackouts lasting 10-15 minutes, according to sources on the ground.

Houston may pick up as much as 2 inches (5 centimeters) of snow overnight, along with ice and sleet, the National Weather Service said. It will get hit by another storm bringing ice and freezing rain Wednesday.

“It is going to be a cold week,” said David Roth, a senior branch forecaster at the U.S. Weather Prediction Center. “The southern plains are in a cold pattern and it is going to take a while for them to break out of it.”

Among the other markets moving on the cold:
  • Gas in Chicago hit $220 per million British thermal units, traders said
  • Physical gas was going for as much as $300 at a Texas hub
  • Oklahoma gas prices have swung anywhere between $50 to the high of $600
  • Spot gas prices across the eastern U.S. remained subdued amid milder temperatures, assessed at anywhere from $4 per to $12 on Friday, pricing data compiled by Bloomberg show

–With assistance from Brian Eckhouse, Dan Murtaugh, Aaron Clark and Stephen Stapczynski.

© 2021 Bloomberg L.P.
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  • William Stucke says:

    Oh boy! It seems that neither solar PV or wind turbines are much good in these cold conditions. And an evidently unstable grid has led to a frequency excursion and the shutdown of normally stable rotating generation such as nuclear reactors, coal and gas generators.

    This is a lesson that we all need to learn. The ongoing reduction of rotational inertia in grid systems _MUST_ be managed. There are two possible, linked, solutions: (1) The installation of more battery-based ancillary grid systems. It’s important to understand that the function of these is not to store and resell power (arbitrage) but rather to provide real-time frequency control. An example is Hornsdale Power Reserve in Australia. (2) Better controls systems. They need to be updated and modified to cope with a much more dynamic system as more and more renewable but intermittent generation is connected. Linked to this is the implementation of better price signalling. For example, Lichtblick in Germany is using home-based PV/battery systems for frequency management, despite there being no price signal from the grid.

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