One year after winter storms crippled Texas’s electricity grid, contributing to more than 200 deaths, a Cornell University-led analysis recommends contracting improvements to reduce decentralized energy markets’ vulnerability to rare events.
Such “energy-only” markets rely on investors to anticipate demand for all conditions and build appropriate resiliency into the system. They allow prices to soar during extreme events to incentivize preparedness.
But in Texas, where Winter Storm Uri caused catastrophic blackouts over five consecutive days of frigid temperatures, the crisis revealed the market’s failure to manage risk as designed, says Jacob Mays, assistant professor in the School of Civil and Environmental Engineering at Cornell. Winterization investment fell short, he said, because the payoff proved too distant and uncertain.
