Texas was hit by a deadly winter storm this week that brought historic snowfalls and freezing temperatures that battered its power grid, leaving millions of people shivering in the darkness. Around 60 percent of homes in the state rely on electricity for heating and the extreme weather conditions led to a surge in demand that crippled the power grid, resulting in 4.3 million people losing power on February 16.
Three million people were still in the dark late on Tuesday night as the conditions turned into rain and freezing rain. The blame game is now well and truly underway with criticism leveled at different fuel sources. The reality of the situation is that both renewable and fossil fuel energy sources were impacted by the conditions. For example, wind turbines were heavily criticized as some were shut down in the western part of the state by icing, though those losses were partially offset by wind farms elsewhere. Wind power itself is not to blame as experts have said that turbines in Texas were not prepared for operating in cold conditions as they were not equipped with heating elements or treated with antifreeze.
Fossil fuel sources also suffered setbacks. Both natural gas and coal-fired power plants require water to operate and the freezing conditons saw some of them go offline as well. Ironically others also ceased operating after losing access to the electricity they needed to remain up and running. Nuclear power stations are also reliant on water and at least one unit was reportedly shut down in the south of Texas due to the freezing conditions. The country’s largest oil refinery, Port Arthur, also ceased operating on Monday due to the unprecedented weather.
An analysis of ERCOT (the Texas grid operator) data by Joshua D. Rhodes shows where Texas gets its energy from. The highest share came from natural gas in 2020 at 46 percent while wind accounted for nearly a quarter at 23 percent, quite a rise on 8 percent a decade ago. The remaining share comes from coal (18 percent), nuclear (11 percent) and solar (2 percent). If anything, the storm has shown that the entire system in Texas is to blame rather than one particular energy source. To make matters worse, Texas operates its own independent grid, unlike other states. This means that it cannot export energy to states in favorable times while it cannot import electricity to compensate for losses during extreme situations.
This chart shows the share of energy (MWh) generated by fuel type in Texas in 2020.
Wall Street Examiner Disclosure: Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. No endorsement of such content is either expressed or implied by posting the content. All items published here are matters of information and opinion, and are neither intended as, nor should you construe it as, individual investment advice. Do your own due diligence when considering the offerings of information providers, or considering any investment.
Last week’s selloff did less damage than it may have felt like. The drop stopped in the area of 3 crossing uptrend lines, ranging in length from short term to long term. Here’s what would tell us whether the uptrend is still in force, or signal that something evil this way comes.
I have added 8 new stocks to the swing trade chart pick list, including 2 shorts.
These reports are not investment advice. They are for informational purposes, for a broad audience of investment and trading professionals, and other experienced investors and traders. Chart pick performance changes week to week and past performance may not indicate future results, as you know. Trading involves risk, and these reports assume that you understand those risks and manage them according to your tolerance.