[NTD News February 21, 2021, Beijing time]In the past week, intense snowstorms have hit the United States for several days. At least 30 people have been killed due to severe cold-related factors. The low temperature in many parts of the central and southern United States has broken for decades or even a century. Record. Among them, the disaster in Texas is the most serious. Snowstorms have caused a surge in electricity consumption and paralysis of the power grid. Millions of people have no water or electricity and are suffering in the severe cold. Households with electricity have to endure a hundredfold increase in electricity bills. At the same time, Texas’s energy industry and chip manufacturing have also been hit hard.
Why is the Texas grid paralyzed on a large scale? What is the reason behind this?
People suffering without water, electricity and heating
Texas is located in the south-central United States. It was originally a state with a warm climate. However, in the past week, an “Arctic cold front” originating from the US-Canada border swept across the United States, bringing a lot of rain, snow and extremely cold temperatures, causing the temperature in Texas to drop once. It reached minus 19 degrees Celsius, the lowest since 1989.
At this time in previous years, the highest temperature in Dallas, Texas was around 15 degrees Celsius, but the highest temperature these days was only minus 10 degrees Celsius, which was about 25 degrees Celsius lower than in previous years.
From February 15th, the snowstorm paralyzed the power grid, causing more than 4 million people in Texas to lose power for more than 36 hours. As of February 18, there were still close to 500,000 people suffering from power outages.
At the same time, the power outage also affected water supply facilities, which may cause tap water pollution. 7 million residents in Texas were told to boil tap water before drinking. The governor also urged residents to cut off water sources in their homes if possible, so that the water pipes could rupture.
People who complained about the sky have posted photos on social media, showing the miserable situation of their own homes. Some are directly frozen from the tap; some are frozen to a large block of ice in the fish tank at home, and all the goldfish grown in it freeze to death; there are also water pipes that leak after freezing. The water that came out froze into a lot of slender icicles under the ceiling fan; and in this photo, after the water pipe on the ceiling cracked, the gushing water hit a car and was instantly frozen into an icicle.
Liberalized market controls electricity prices soaring about 200 times
The blackout under the low temperature and severe cold has caused the people to suffer miserably, and the sky-high electricity bills have made the people even worse.
According to media reports, many people in Texas have received a briefing from the power company, informing them that their bills are “about to break the meter” and suggesting that they change to another power company. A female resident in her 40s said that the electricity bill for just half a month of February was already $2,500, while the bill for February last year was only about $33.
The electricity company Griddy usually charges customers a fixed monthly fee of $9.99, but due to loopholes in the regulations of the Reliable Electricity Commission of Texas (ERCOT), the market price of electricity suddenly soared by nearly 200 times on the 15th, originally per million watts. An hour (megawatt-hour) is less than US$50, but suddenly it becomes more than US$9,000.
In fact, Texas, which is rich in oil and natural gas resources, has the highest degree of power liberalization and private involvement in the United States. For a long time, the economic efficiency of “free power competition” has also made the Texas government proud. The loosely regulated market also brings obvious benefits, that is, it is cheap. The average electricity price in Texas is 8.6 cents per kilowatt hour, which is about one-fifth lower than the national average and half that in California.
Moreover, because extreme cold weather is rare in Texas, Texas does not require power suppliers to reserve additional power for a possible surge in demand, and power companies will not spend large investments to make equipment resistant to cold.” Overwintering”.
However, in the severe freezing of this time, the huge fluctuations in power prices have also caused public opinion to question the “benefit first” approach of Texas power suppliers.
Energy industry and chip industry are hit
Texas is a major energy town in the United States and the headquarters of some of the world’s largest oil and gas companies. Therefore, this severe cold weather has also caused damage to the energy industry in Texas.
Texas produces about 4.6 million barrels of oil a day, accounting for about 40% of the country’s output, while Texas produces about a quarter of the country’s natural gas output. However, due to severe weather, from February 15th, Texas has suspended oil wells and refinery operations, forcing natural gas and crude oil pipeline operators to restrict supply. The reduction in crude oil production also caused the price of crude oil in West Texas to rise above the $60 per barrel for the first time in more than a year.
In addition to oil and gas production, the transportation capacity of oil and gas has also been hit by severe cold. The Houston terminal in Texas was forced to close. The transportation capacity of natural gas pipelines in Texas, Arkansas, Illinois, Louisiana, and New Mexico were also affected.
Due to power outages, some semiconductor factories near the capital of Texas, Austin, were also forced to suspend operations. On the 17th, NXP, one of the largest manufacturers of automotive chips, said that two factories in the Austin area had stopped production. Infineon’s Austin factory was also forced to close. In addition, Samsung Electronics, the world’s second-largest semiconductor manufacturer, also said that it has closed its Austin plant. Prior to this, due to the epidemic and other reasons, the global chip shortage has been caused, and this extremely cold weather in Texas has undoubtedly made the “chip shortage” problem in the downstream of the chip supply chain more severe.
Texas’s promotion of renewable energy causes power outages?
The power outage in Texas this time also triggered a big discussion about whether we should vigorously develop renewable energy.
Republicans in Texas have always advocated protecting fossil fuels. After the power outage, Republicans accused that vigorously developing renewable energy and abandoning traditional energy sources such as coal are the root cause of the outage.
The Texas Public Policy Foundation also pointed out in a press release that “this week, because Texas is covered by snow and ice, it can be expected that most wind turbines will be stationary, and solar panels will generate very little electricity” and said, “What makes Texans feel warm and keeps them alive in this deadly winter storm? It is fossil fuels, especially natural gas.”
Some mainstream media also expressed similar views. The Washington Post said that power outages across Texas were partly due to problems with wind turbines. The turbine freezes in severe cold weather, and the blades will eventually stop rotating. The Texas grid operator said that nearly half of the wind turbines in Texas were frozen.
The Wall Street Journal also stated that in the past 10 years, coal facilities, which are enough to power 60 million American homes, have ceased operations, and many nuclear power plants are planned to close. Both Democratic and Republican politicians are pushing for subsidies for renewable energy, but what is happening in Texas has exposed the limitations of renewable energy.
But there are also views that these statements may be biased. According to data from the Texas Electric Power Reliability Commission (ERCOT), in the past few years, Texas has been working hard to reduce coal power and develop decarbonized wind power generation. However, the main power supply in Texas is still natural gas, accounting for 45% of the state’s electricity supply in 2020; wind power is the second place, accounting for about 23%; coal (18%) and nuclear power (11%) are tight. Followed by; solar energy accounted for about 2%.
In this deadly cold wave, 46,000 megawatts of electricity supply ceased operation throughout the state, of which about 60% of the losses came from natural gas, coal and nuclear power generation, and another 40% came from wind and solar power generation.
In other words, whether it is natural gas, coal, nuclear power generation, or wind and solar power generation, all types of generator sets in Texas are affected by cold weather, without exception.
So why did the thermal power generating units in Texas shut down due to the freezing cold? This is because a certain proportion of water vapor will remain in the process of natural gas extraction. However, at an extremely low temperature of “0 degrees Fahrenheit”, which is equivalent to minus 18 degrees Celsius, the water vapor will freeze and freeze, which seriously hinders the gas transmission efficiency of natural gas pipelines.
At the same time, the diesel generator system used to pressurize gas and supply thermal power generation also freezes at low temperatures due to chemical characteristics. Therefore, in the vicious cycle of low temperature, the gas transmission system will be shut down at low temperature one after another, and then the thermal power plants will be completely paralyzed.
According to the normal safety logic, the natural gas transmission, green energy generating units and power grid systems in the United States should have “antifreeze devices” to avoid the extreme weather in winter affecting power supply. However, Texas is located in the south and is warm and high temperature all year round. The system settings are all based on “preventing summer heat wave overload”, and the possibility of “large-scale freezing” has not been seriously considered.
In fact, this is not the first time that Texas has suffered a power outage due to severe cold weather. The ice storm in 2011 also caused coal and natural gas power plants to freeze, but the scope of the outage was not as large as this year. Industry observers believe that the antifreeze operation of the Texas power plant is still insufficient.
An assistant professor at Georgia Institute of Technology believes that the power outage is not a problem of the proportion of renewable energy, but a problem of the power system, and the existing fossil energy-based systems cannot handle these situations.
Independent power grid makes Texas an island
However, in addition to these factors, Texas has another special feature. It is the only state in the United States with independent power grids.
The 48 states of the continental United States are roughly divided into three major power grid systems: the United States Eastern United Grid, the Western United Grid, and the independent Texas Grid, which covers most of Texas.
Historically, Texas once belonged to Mexico, and then the Republic of Texas was formed until it joined the United States as a state in 1845. Today, there are still calls for independence from the United States in Texas.
In order to prevent the federal government’s supervision from overly interfering with Texas, Texas has an independent grid operator, the Electric Reliability Commission (ERCOT), which is only supervised by the Texas Public Utilities Commission and the state legislature.
But this also means that the Texas power grid is like an island, it cannot directly borrow electricity from the eastern or western power grid when it needs help most. Similarly, it cannot send electricity to other places. This is also one of the major reasons why Texas continues to lose power in a large area and cannot be restored as soon as possible.
Therefore, local experts in Texas believe that grid interconnection and improved transmission and storage are the development direction to avoid future power crises. For example, more than 4 million people in Texas were out of power on the 16th. However, some areas in the United States have surplus electricity and low electricity prices. The electricity there should be sent to areas in Texas that are in urgent need of electricity.
Some experts believe that the government should encourage the establishment of more transmission facilities, transfer resources to places where they are needed, and build more high-voltage wires to transmit electricity across the United States.
In recent months, a series of extreme weather events in Japan, Pakistan, and France have also paralyzed the national grid and destroyed the global energy market. This cold snap event in the United States is just the latest of them. From these events, we can also pay attention to a problem, that is, the world seems to have become very fragile. In the face of unpredictable nature, we humans need to continue to be in awe.
Planning: Xu Qiaoru, Yu Wenming
Anchor: Wei Ran
Written by: Li Songyun, Institute of Finance, Business and Economics
Financial and Business World: http://bit.ly/3hvUfr7
(Editor in charge: Li Hong)
The URL of this article: https://www.ntdtv.com/gb/2021/02/21/a103058824.html
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