Comment by infecto
8 hours ago
I would not entirely dismiss the way the power market works in Texas. I have not disagreement the 2021 storm should never have happened. At the same time though, I don’t believe other energy markets work very well either. I would prefer a more Texas like approach but with some thoughtfulness around capacity instead of just generation.
> I have not disagreement the 2021 storm should never have happened.
But they still haven’t fixed any of the issues. The exact same thing is going to happen again when (not if) it freezes.
> I would prefer a more Texas like approach but with some thoughtfulness around capacity instead of just generation.
Capacity isn’t the issue. Lack of winterization of pumps is the issue. Because that costs money and private companies have zero incentive to make the investment if government doesn’t force them to.
You are missing the forest for the trees.
Winterization is a fix for last time’s failure, not a strategy for the future. A market like Texas can work if it values resilience alongside price efficiency, meaning capacity planning, diversified generation, and yes, some enforced standards. Otherwise you’re just running a lean system that collapses the moment reality strays from the model.
That storm was an issue for other markets as well but they were mostly able to get away with rolling blackouts due to interconnects. Those same markets and similar winterization issues but were under FERC guidelines. Folks love to anchor onto to winterization issue like it did not impact other FERC regions.
>You are missing the forest for the trees.
I'm really not.
>Winterization is a fix for last time’s failure, not a strategy for the future. A market like Texas can work if it values resilience alongside price efficiency, meaning capacity planning, diversified generation, and yes, some enforced standards. Otherwise you’re just running a lean system that collapses the moment reality strays from the model.
What are you even trying to say? A private company isn't going to magically "value resilience" if there's no incentive to do so. They make MORE money when they have outages, why would they prevent that? The solution to the issue, which has worked literally everywhere else, is government regulation.
Talk about missing the forest for the trees. "If only capitalism didn't work the way it works it would be perfect".
>That storm was an issue for other markets as well but they were mostly able to get away with rolling blackouts due to interconnects. Those same markets and similar winterization issues but were under FERC guidelines. Folks love to anchor onto to winterization issue like it did not impact other FERC regions.
Citation of which other markets had blackouts due to not winterizing pumps that had been called out repeatedly after identical outages prior in 2010 and 1989? You conveniently left that out, I'm sure it was just an oversight.
https://www.houstonchronicle.com/business/energy/article/Tex...
Because if I had to bet money, you're talking about the power companies in other states who WERE prepared for the freeze asking homeowners to drop their thermostats a couple degrees because the cold snap was driving demand significantly higher than normal. NOT because of power plant outages due to lack of preparation and component failure - due to lack of regulation.
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> I don’t believe other energy markets work very well either.
but is isn't even about that storm, big "oh no" situations happen sooner or later (e.g. see energy outage in Spain) what is important is that you learn from it.
but more important in this argument is the general design, how can it handle flexible loads, how can it share loads between areas, how many ways to handle partial failure does it has etc.
and Texas is kinda not that good in all of that AFIK
the problem is that there are markets where politics fully getting "out of the way", doesn't work as the market dynamics favor things which might be better for the people running the gird, but are bad on a state economical level anyway (but getting in the way here is using tax money to make sure the net is stable, not getting int the way of that to protect personal investments)
it's a bit like freighttrains in many parts of the EU, there operating does in most situation make no profit. But having them is helping the economy as a whole and can (implicitly) safe the state/region etc. money. So it makes sense to place some tax money into making them still viable to operate as that investment in a roundabout way saves more money then spend.
I agree that the ability to adapt, whether to flexible loads, partial failures, or cross-area balancing, is the real test of a grid design. Texas’s isolation means it inherently lacks some of the tools SPP or MISO can use, which makes resilience harder. That is not a “market” problem so much as a structural one. ERCOT’s ruleset was built to optimize for low-cost generation in-state, not multi-region contingency planning.
Where I think a Texas-like market could work better is if you layered competitive generation with enforceable capacity and resiliency standards, along with some interconnection flexibility. Right now, the market rewards generators for selling MWh in good weather, not for being ready in bad weather. That is the economic misalignment.
The EU freight analogy works in the sense that reliability is often a public-good investment. No private actor has the incentive to overbuild or maintain resources for rare events. Texas’s approach does not have to mean politics fully getting out of the way. It could mean using market signals to keep prices efficient while still mandating the backup, winterization, and grid-sharing capabilities that the economy needs.