Over the past week large parts of the country have been devastated by an unprecedented cold front. In Texas, Dallas, Houston, and San Antonio all faced single digit temperatures, the lowest reached in 30 years. At the same time, power grid failures left millions without electricity.
ERCOT, the Electric Reliability Council of Texas, which controls approximately 90% of the state’s electric capacity announced it was experiencing record-breaking demand. However, at the same time natural gas supplies were limited and temperatures left wind turbines frozen.
Unlike most parts of the country the energy industry in Texas is largely deregulated creating a so-called “free-market electrical grid.” This idea was backed by George W. Bush who touted the concept as a means of providing lower-cost power.
Without integrating their power grid to surrounding states, ERCOT was left with millions of customers in the dark and no means to meet the demand. This led to a surge in need for alternative energy sources. As an example, shares of Generac, a provider of power generation and energy storage systems, rose more than 10% in a day as demand spiked.
The turmoil in the region creates an opportunity for intellectual properties such as low-cost energy storage, generators, large scale battery technology, and localized renewable energy which can address gaps in the current economic framework. One of the many problems faced by Texas last week is that energy is largely produced in areas that are not the primary point of consumption. For example, most wind energy is produced in west Texas, then shipped to the major metropolitan hubs in the center of the state. With transmission problems, and the lack of local power sources, opportunities for new intellectual properties that solve the energy storage and transmission problems are endless, and substantial value will be created in solving this dire need.