‘Switzerland would have handled the situation’

The days-long power outages in Texas have potential lessons for Switzerland. Why Switzerland would have mastered such a situation. And why that shouldn’t make us complacent.

Texas is known more for sweltering summers than severe winters, and its power supply is accordingly designed for summer weather. The state’s many air conditioners require large amounts of electricity at the height of summer. The winters are mild and electricity consumption in the (not particularly) cold season is low. Normally.

In mid-February 2021, things became cold for a change in Texas – really cold. The temperature dropped to as low as -18°C. The cold temperatures led to people cranking up the heat in their often poorly insulated buildings, which in turn sent energy consumption skyrocketing. At the same time, several gas and coal-fired power plants (as well as one nuclear plant) had to go offline because their cooling systems were not equal to the cold. Texas was suddenly confronted with a scenario of high energy demand with unexpectedly low production – a deadly cocktail for the supply security situation.

Forecasts were off by 17 gigawatts

Just how drastic the situation was is demonstrated by the assumptions made by Texan grid operator ERCOT. Its forecasts for the current winter had assumed peak loads of approximately 58 gigawatts. The absolute worst-case scenario for the Texan electricity grid envisioned up to 67 gigawatts – and only if the weather was extraordinarily severe. The effective demand on 17 February, however, was more than 75 gigawatts. ERCOT’s forecasts were off by approximately 17 large nuclear power plants. Initial rumours that renewable energy sources had been responsible for the outages were soon revealed to be ideology-driven nonsense. Photovoltaic energy was in fact the only technology that delivered more energy than expected throughout the shortage period – albeit at an extremely low level.

The imbalance between the power supply and demand in Texas led to load shedding. In other words, since demand could not be covered by production, ERCOT shut off power to millions of Texans for a number of days. Although that prevented a total collapse of the grid, it put many Texans into a precarious situation due to the extreme cold.

Electricity prices exploded

And those who still had power? They could, at least in the beginning, consider themselves lucky. But many were surely shocked when they saw their electricity bills. The electricity market and electricity grid in Texas are independent of the rest of the US. The system therefore also has its own electricity tariff. And due to the high demand and low production, that price rose to USD 9,000 per megawatt-hour for three days – normally it is about USD 30. And even worse, the electricity tariff for many Texans is not – as in Switzerland, for example – fixed for the year, but tied to the short-term market price. So many Texans were forced to pay exorbitant prices to keep their homes warm. At the same time, many providers whose power plants had gone offline were obliged to procure expensive back-up power for their customers with a fixed tariff.

Reservoirs are the Swiss trump card

What lessons can Switzerland learn from the events in Texas? ‘Switzerland would actually have handled a similar situation with relative ease,’ says Martin Koller, Head of Energy Economics at Axpo. In contrast to Texas, our reservoirs support supply security: ‘Swiss storage power plants are very flexible and can absorb even lengthier load spikes.’ Moreover, Switzerland is not self-contained, but rather integrated into the continental interconnected grid. In addition, power plants in Switzerland remain operational even at very low temperatures.

So no need for action in Switzerland? ‘On the contrary,' counters Koller. ‘If electricity prices are high for an extended period before an extreme phase, the reservoirs are emptied as a lot of money can be earned with that electricity.’ So it would be possible for the water level in the reservoirs to be too low when needed in an extreme phase. ‘Texas demonstrates two things,’ concludes Koller. ‘Switzerland needs a back-up reserve. And the electricity exchange with Europe must be put on a firmer footing.’