Texas will have to winterize its grid or interconnect with neighbors: experts

FILE PHOTO: Overhead power lines are seen during record-breaking temperatures in Houston, Texas, U.S., February 17, 2021. REUTERS/Adrees Latif

(Reuters) - Texas should winterize its electric generation plants or consider connecting its grid with other parts of the country to help avoid another deadly blackout like the one last month that left people without heat, power or water for days, experts at a top energy conference said on Thursday.

A winter-storm surge in demand saddled the companies that sell, transmit and generate electricity in the state with about $47 billion in costs as fuel prices soared. The political fallout has included the ouster of the chief executive of Texas’ power grid operator on Wednesday and a second round of contentious state lawmaker hearings set for Thursday.

Power costs are likely “10 times what it would have been if we had identified what we needed and paid for it,” said Lawrence Makovich, vice president at IHS Markit, speaking at CERAWeek virtual conference.

The flaw of Texas’ market system is that the low prices don’t cover the full costs of reliable generation, he said.

Texas has diverse power supplies, but needs better standards for reliability, several experts said. That could include winterizing equipment, requiring natural gas-fueled plants to be able to run on liquid fuels for five days in case the natural gas system fails to deliver fuel, and connecting its grid with neighbors, they said.

“We design a system great for the summer, but are we focusing on these one-in-ten year events?” asked Pat Woods, chief executive of Hunt Energy Network and past chairman of the Federal Energy Regulatory Commission. “We’re absolutely going to plan for that now.”

Natural gas, wind, solar, coal and nuclear generation all had failures along with Texas’ natural gas production and pipelines.

The only form of generation that outperformed expectations was hydroelectric, which isn’t practical to add in Texas, said Michael Webber, chief science and technology officer at Engie SA.

Connecting the Texas grid with neighbors would benefit the state “99% of the time,” Webber said, adding, “We export every form of energy except the electron.”

Reporting by Jennifer Hiller in Houston; Editing by Bernadette Baum