The February 2021 cold weather outages in Texas remain a subject of important investigation, and lessons learned from the crisis have broader relevance for bulk power systems around the world. This article focuses on the policy responses to what we view as the root causes of the extended blackouts: the insufficient preparation of electric generating…
Tag: Texas
How Should We Think About Pricing Electricity in the Context of Potential Life-Threatening Weather Events?
This paper argues that in markets characterized by highly inelastic demand, such as markets for electricity, market-clearing can force some individuals—particularly those with limited financial resources—out of the market, subsequently exposing them to significant risk. In the particular case of abnormally cold temperatures, as with the Texas deep freeze, or particularly hot temperatures, as may…