Newsletter: Texas outages made transmission upgrades look cheap

Can framing grid investment as a way to prevent disasters convince more people to support it?

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Building new transmission lines is one of the more expensive and politically challenging tasks facing the clean energy transition. But outages we’re already seeing from extreme weather make the costs of a more connected grid look like a far better deal.

Energy wonks have published piles of erudite, reasoned analysis of the benefits of new transmission lines for grid planning or renewables expansion. But such tracts fail to move public sentiment. So a new study reframes the electricity superhighway in a way more people can relate to: as a tool to keep the lights on when a heat wave or cold snap pushes the energy system to its limits.

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The deadly grid failure in Texas this winter offers a potent case study for this argument, Jeff St. John reports. That’s because:

  • It was exceptionally costly, killing hundreds of people from loss of power and heat, and inflicting at least $38 billion in excess electricity costs and an estimated $200 billion in economic damages.
  • Texas is uniquely cut off from the broader U.S. grid to avoid federal regulatory oversight. It only has 800 megawatts of high-voltage transmission to import power from neighboring states.

Given those dynamics, the (admittedly hefty) tab to build out more transmission lines would have more than paid for itself by bringing in additional power when Texas desperately needed it, analysis firm Grid Strategies concluded.

In the case of February’s Winter Storm Uri, the analysis shows that every additional gigawatt of hypothetical transmission serving Texas grid operator ERCOT could have prevented nearly a billion dollars in economic damages. Those savings would have been enough to fully cover the cost of building new transmission, which the report estimated at $700 million per gigawatt of capacity.

Granted, it’s easier to look back and spot where grid upgrades could have helped. It’s harder to predict when and where transmission lines could best protect people from unknown future calamities. 

But if this year is any indication, climate-change-induced extreme weather is becoming routine all over the place. Texas is an outlier for now — but maybe not for long. 

Actually turning this insight into grid policy requires resolving thorny issues around who gets charged for the anticipated benefits of new wires. That won’t be resolved overnight.

But if decarbonization study after decarbonization study failed to inspire a rebirth in American transmission construction, maybe the disaster-prevention argument is worth a try.

Ding ding ding

While we’ve got you here, you should know that luxury electric car startup Lucid Motors officially listed on the Nasdaq yesterday. After completing its merger with a special-purpose acquisition company (SPAC!), Lucid rang the opening bell Monday.

Buzzy EV startups have a checkered record, but this debut looks good for Lucid. 

  • The company was on track to pull in $4.4 billion to bring its first vehicle to market. 
  • Its valuation shot up to $42 billion Monday morning, Barron’s reported, making it the fourth most valuable EV brand and one of the most valuable automakers. 
  • Ford Motor Company, by comparison, is currently valued at $55 billion.

None of this matters until Lucid ships a product that people like. But that’s not bad for a first day on the stock exchange.

(Lead image credit: Montinique Monroe/​Getty Images)

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Today’s newsletter is sponsored by Clean Energy Associates (CEA). Join CEA for its upcoming webinar, How US solar companies can manage supply chain risk following Customs WRO.

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Julian Spector is an editor at Canary Media and reports on the rise of clean energy. He worked at Greentech Media for nearly five years, and before that he reported for CityLab at The Atlantic.