Power Grid Breakdowns Reveal Need for Climate Resiliency Preparedness

DENVER (March 31, 2021)—Widespread power outages brought on by February’s deadly winter storm have raised new concerns about the future of grid resilience. The polar outbreak set dozens of new low-temperature records, challenging regional power systems across a wide swath of the country. 

With extreme weather events becoming more common and more costly, electric cooperatives will need to reconsider their approach to resource planning, according to a new report from CoBank’s Knowledge Exchange. 

“We should be thinking about the crisis in February as a precursor of future events, which could be even more severe and disruptive,” said Teri Viswanath, lead energy economist with CoBank. “The lessons learned and insights gained over the past season should lead to better climate resilience efforts, including a further build out of localized infrastructure and new investments to shore up our macrogrid.” 

As the polar vortex descended deep into the southern U.S. in February, more than 100 million people resided in areas covered by the winter weather warnings. Roughly 5 million of those people lost electricity in a handful of southern states battered by the storm. 

Utilities from Minnesota to Texas and Mississippi implemented rolling blackouts to ease the burden on power grids. But the situation in Texas deteriorated quickly and proved more dire, with millions of the state’s customers without power for more than 24 hours during the crisis. In the end, the Texas blackouts were the largest forced power outages in U.S. history and may prove the costliest natural disaster that the state has ever experienced. 

Extreme weather, such as February’s arctic outbreak, is increasingly likely to test U.S. electric grids and energy supply systems. A recent report from the National Oceanic and Atmospheric Administration confirmed that 2020 was a historic year of extreme weather with 22 separate billion-dollar weather and climate disasters. 

As the electric power industry has watched high-cost climate disasters become more frequent and more costly, February’s storm has renewed the urgency to confront the impacts of climate change, Viswanath says. 

“Restoring the grid to its previous state is an inadequate response in the face of increased stress on infrastructure,” said Viswanath. “It is mission critical for rural electric cooperatives to plan for climate resilience.” 

Over the past decade, 99% of customer power outage minutes came from failures related to transmission and distribution that were largely caused by severe weather events. Further development of localized microgrids can increase climate resiliency while potentially reducing costs. 

In Texas, three factors contributed to the spike in electricity prices: soaring weather-related demand, off-line generation, and sky-high natural gas prices. Prior to February, ERCOT’s previous highest day-ahead on-peak price for any given month was $974.57/MWh. In February, the monthly average exceeded $1,500/MWh and climbed to a staggering $6,612/MWh over a five-day period during the height of the crisis. 

Texas has become increasingly dependent on electricity, which underscores why the crisis in Texas has implications for the rest of the county. Electricity has outpaced oil and is now the largest source of energy in the U.S. As the role of electricity grows, so too will the societal intolerance for outages. 

Watch a video synopsis and read the report, The Power Sector’s Tough Lessons Learned this Winter.

About CoBank
CoBank is a $159 billion cooperative bank serving vital industries across rural America. The bank provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states. The bank also provides wholesale loans and other financial services to affiliated Farm Credit associations serving more than 75,000 farmers, ranchers and other rural borrowers in 23 states around the country.
CoBank is a member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture, rural infrastructure and rural communities. Headquartered outside Denver, Colorado, CoBank serves customers from regional banking centers across the U.S. and maintains an international representative office in Singapore.