The simple lesson of Texas’s power outage

The details of what went wrong in Texas — most likely the biggest forced blackout in US history — will take time to establish. So will exactly what to do about it. But this emergency already underlines something that should’ve been obvious before. As the growing threat of
extreme weather puts vital economic systems at risk, climate resilience needs to be taken much more seriously.
As of February 19, nearly 190,000 homes were still without power as Texas grappled with an unusual weather pattern that sent temperatures plummeting and demand for energy soaring. With the local grid overwhelmed, officials resorted to rolling blackouts that at one point left millions without heat or clean water and led to at least 20 deaths. President Joe Biden has declared an emergency and federal regulators have launched an investigation.
Evidently no one thing went wrong. The failure was systemic and multifaceted. The extreme cold shut down power from fossil-fuel and nuclear plants when instruments and pipelines froze. As the problems cascaded through the state’s electricity grid, outages due to frozen wind turbines made a small contribution to the losses — though nowhere near as much as critics of renewable energy have claimed. The system as a whole had not been weatherised to the necessary standard.
In Texas, two other factors compounded that basic vulnerability. First, the state has, by design, a relatively self-contained grid. This limits its ability to draw power from elsewhere in emergencies. Second, its lightly regulated energy producers compete vigorously on price, which leads them to economise on maintenance and back-up systems. Most of the time, the benefit to consumers is real — cheap power. But the delayed cost of those forgone investments is what consumers are now having to endure. Texas can’t say it had no warning. Severely cold weather caused rotating power shutdowns in 2011, and before that in
1989. Both times, outcry and investigations followed, and calls for generators and supporting infrastructure to be more thoroughly winterised were duly issued. Too little was done.
Investing in resilience is a form of insurance. It costs money, and it’s reasonable to ask how much is enough. The cost of guarding against every conceivable climate extremity would be prohibitive, and warm states such as Texas are right to apply different standards of weather resistance than those that make sense in Alaska. But this doesn’t excuse policy makers simply turning a blind eye to infrequent yet recurring events that cause massive losses when they happen. And the tradeoff gets worse with time. Failing to act on climate change now means that extreme weather is likely to become much more frequent.
The right amount of spending on resilience — the ongoing cost of climate-change insurance — will keep getting bigger year by year until the underlying threat is adequately addressed. Texas’ failures are glaring at the moment. But it’s by no means the only place that’s gambling recklessly on “It will never happen.”

—Bloomberg