The Texas energy crisis - in numbers
1 – Texas operates as an almost entirely islanded grid network in the US. The ~70GW in the Texas/ERCOT region has only ~1GW of interconnection to the other Eastern or Western grid networks. This means that any major disruption in the region (e.g. caused by extreme weather) results in massive challenges in balancing the system (physically) and huge price volatility in wholesale markets (financially). This low-resilience market is in desperate need of both physical and digital solutions. For example, building more storage / peaking / interconnection to provide much-needed physical resilience (along with better winterisation!); and powerful digital solutions to help mitigate financial risks for energy companies and / or customers.
51 – With wholesale power prices surging more than 10,000% to record highs (capped at $9,000/MWh), these 4 days of extreme prices resulted in a $51Bn price tag for the Texas power markets. To put this enormous cost in some context, it is more than the whole of the UK spends in total on electricity and gas for a year!
300 – Some energy companies in the region incurred huge financial losses, depending on their hedging strategy and / or PPA terms. Estimates are that one publicly-listed, global power utility lost about $300m on a relatively tiny 400MW wind portfolio during the period (knocking about 2% off its overall share price).
15,000 – Individual households suffered major physical disruptions (blackouts; loss or heating; frozen water pipes/floods) causing untold personal misery. In addition, depending on what tariff they happened to be on with their utility provider (e.g. whether they were exposed to the wholesale power price), some households were also faced with a $15,000+ bill for the electricity they used during those 4 days. Imagine the shock at being charged the cost of a new car simply to keep your lights on for a week!
This is market volatility in the extreme – but is this a one-off anomaly, or a sign of things to come?
More investment in intermittent renewable energy generation (which we all want to see) combined with more frequent extreme weather events (due to climate change) means that powerful technology solutions are increasingly critical to protect companies and consumers from price volatility and physical disruptions.
Origami provides powerful digital solutions based on real-time data and AI that help energy companies increase their resiliency to market volatility. Our software gives customers the tools to gain visibility, improve forecasting and make informed decisions across their physical and financial positions in real-time. Origami can help dynamically manage physical energy flexibility (e.g. from battery storage) to enhance resilience across the energy system, improve the economics, and accelerate the shift to more renewables.
Origami customers can respond more quickly to changes – avoiding or significantly mitigating losses during extreme swings in the market (like what happened in Texas) and capitalising on changing supply/demand dynamics.
At Origami, we’re continuously developing our open digital platform to meet the increasing demands of a rapidly-evolving, more volatile energy market, because the clean energy world will be powered by smart technology.