Texas’ freeze and the consequent human suffering have left the country in shock. While the Electric Reliability Council of Texas (ERCOT) has announced its return to normal operations, the nation, and its experts are busy assessing the damage, looking for perpetrators, and finding ways to move forward. The blackouts and the price spikes have exposed systemic vulnerabilities in Texas’ current energy system and its unpreparedness to respond to adverse weather conditions. Pundits have been quick to throw blame at individual technologies (renewables, thermal power plants, or nuclear power), players (power plant owners, ERCOT, policymakers, or the Texas Public Utilities Commission), or market structures (laissez-faire vs. regulated). However, Texas’ power sources across the board failed, and California—a state with a fundamentally different market approach—experienced similar blackouts. Thus, it is not just any one actor that should be held responsible but the energy system as a whole.
Economically speaking, it is perfectly plausible that all market participants have followed best business practices, but the results were catastrophic. Markets are more than just the sum of individual actions. They are interconnected systems, and it is systems thinking that we humans often fail to internalize and act upon. This is a generic problem in the energy sector, also apparent in foresight studies that lay out energy scenarios for coming decades. Reviewing available energy scenarios reveals that no one anticipated the pandemic, in contrast to the intelligence and disaster communities (and even some airlines), who proactively developed pandemic scenarios prior to 2020. Similar to Texas’ freeze, in the case of the pandemic, the systemic weaknesses were known, but no action was taken. Anticipation is just the first step to preparedness, but without focusing more on high-impact low-frequency “wildcard” events, we will likely be asking similar questions in the aftermath of the next disaster.