If your fridge and furnace kept humming during yesterday's snowstorm and subsequent frigid temperatures, you may have renewable energy to thank. During the peculiar "polar vortex" earlier this month, several regions were able to maintain power supplies despite record-low temperatures and record-high energy demand because wind power swooped in to boost production right when it was needed. The thing is, our power grid still has a long way to go for this protective effect to be consistently and universally reliable.
Diversity = Resilience
The buzzword in energy circles these days is resilience. As multiple forces conspire to undermine our antiquated power grid -- an increase in extreme weather events, the rise of cyberterrorism, and the steady deterioration of infrastructure, to name just a few -- energy companies are redoubling their efforts to harden their systems against various threats. For those with vision, diversification is an essential element of resilience.
No matter what the system -- be it the gene pool, financial markets, or the energy mix -- diversity greatly improves resilience to shocks. Biologists emphasize hybrid vigor. Finance experts recommend a range of financial instruments in your portfolio. This concept holds for energy sources as well.
Each power source has its strengths and weaknesses. Conventional, coal-fired power plants provide steady, reliable energy, but they have trouble responding to demand surges. Thus, coal plants typically maintain excess capacity, which is wasteful because it goes unused except in rare circumstances. Meanwhile, they have capacity limitations that can be exceeded, thereby not meeting the needs of electricity consumers. That's when the lights go out.
Meanwhile, renewables like wind and solar only deliver when the wind is blowing and the sun is shining. However, deployed effectively, they can pump extra electricity into the grid in periods of unusually high demand. During a heat wave, when folks are cranking their air conditioning to the breaking point, solar generation can make up the difference. In cold snaps, when we fire up the furnaces to infernal levels, wind can often pick up the slack.
Texas keeps the lights on during the polar vortex
Indeed, such was the case during the recent polar vortex. Texas shivered under below-freezing temperatures, and chilly Texans cranked their thermostats as they struggled to keep warm. Monday, Jan. 6, and Tuesday, Jan. 7, were two very different days in that regard.
That Monday, Texas' grid operator had to declare an emergency when power plants began shutting down out of nowhere, reducing the electricity supply as demand soared. This situation forced outages across the Texas grid. On Tuesday, however, a fairer wind blew. Even as the arctic freeze persisted, and electric-power use soared even higher to set a new record, the lights stayed on. Why? Because wind farms in West Texas generated enough juice to bridge the gap.
The wind carried in an additional benefit: It took some of the pressure off of gas-fired power plants, keeping natural gas prices in check and leaving more for building heat.
While there is some natural inconsistency to wind and solar energy, the availability of both can be reasonably predicted using weather forecasting. Given that conventional power plant failures are utterly unpredictable, wind and solar may not be as unreliable as they're sometimes made out to be.
The answer, my friend, is blowin' in the wind...
Texas' recent experience is but one example among many in the last few years. However, it illustrates a further point: The fact that Texas still saw significant outages on Jan. 6 demonstrates that the grid still has a long way to go to achieve the holy grail of genuine resilience. As we continue to invest in the electric grid of the future, a time-honored adage holds as true as ever: diversify, diversify, diversify.
Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.