Full Title: Climate and Power System Reliability in the Aftermath of the Texas Blackouts
Author(s): Marie Petitet, Burçin Ünel, Rolando Fuentes, Frank Felder
Publisher(s): International Association for Energy Economics
Publication Date: July 1, 2021
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The February 2021 blackout in Texas underscored the importance of reliable and resilient power systems. This article, available in IAEE Energy Forum, discusses the roles of regulators, markets, fuel and generation supply chains, and interdependent infrastructures, and finds that they need to be reconsidered and redefined to successfully meet the future challenges of increased electrification and severe weather.
Overall, preparing for a future with more frequent extreme weather events requires a comprehensive vulnerability assessment that covers the power systems and all the critical infrastructure systems, such as pipelines, water, and communications, and their interdependencies. To be informative, this assessment should consider the increasing risk posed by climate change, and hence be forward looking in its assumptions for the changing risk and the changing demand and supply. This requires better information about threats to be available for market participants and regulators. Importantly, designing a reliable and resilient power system requires regulators who understand the power markets and market failures, how electricity markers are embedded in the reliability and resiliency policies for transmission and distribution, who recognize the systemic risk climate change poses, and are willing to take direct regulatory action when certain market failures require it. Market designs should aim not just for reliability and resource adequacy, but also for resilience, with a combination of market-based incentives and mandates for risk assessments.