Why ERCOT?

September 23, 2026

Why ERCOT?

Having lived through the Texas winter storm of 2022, during which my apartment lost power and water for a week, I have a plethora of opinions on the electric grid, furthered by the fact that I used to work in energy engineering, which takes a top-down view of electric grids so that factories may be run more efficiently. These markets for energy are interesting in that they are: a major point of vulnerability for modern society, an example of where efficiency can line up well with reducing climate change, and an area where several positive changes can be made.

What is the power grid?

In America, it is split into three components: West, East, and Texas. The eastern grid is composed of several smaller regions. Each region has a unique mix of power sources and regulations governing its operation. I will even argue that this is good, given that different blends require different operating instructions. Decentralization is likely preferable. Power in each grid is supplied by a mix of natural gas, coal, nuclear, wind, hydroelectric, solar, biofuel, oil, and geothermal. In areas such as the Pacific Northwest, hydroelectric generation punches above its weight; in Texas, solar & wind; in New York, nuclear & hydroelectric. The material resources and built-out plants in each region determine this. Each source has pros & cons. Natural gas emits CO2, but far less than coal; wind & solar are effectively free, but do not run all the time (though batteries exist!). Hydroelectric depends on past weather conditions. And, as a point of vulnerability, all but batteries, hydroelectric, and diesel require working electricity to start up. This was a flaw in Texas: that if the grid went down, it could not be restarted.

This would be a cascading failure and is an example of a major vulnerability in the grid. Other failure points include equipment which has correlated failure modes. E.g., natural gas plants in the South are not designed for freezing weather; transformers are all vulnerable to magnetic damage and are difficult to construct; many types of plants require cooling systems which may not operate well in heat waves or atypically humid conditions. This is where decentralization should ostensibly help. These are region-specific such that each can cover their most salient failures, such as requiring backup heat tracing on natural gas plants.

What should be changed?

As much as I would like for it to be the case, natural gas plants cannot disappear. However, Texas of all places presents a vision of a post-oil future. In its tardy providence, Texas is uniquely placed to benefit from solar and wind energy. As a result, energy is effectively free during the days in the summer (this is due to the fact that Texas energy markets prioritize the cheapest energy first; this happens to be renewables). And, batteries can be charged during these periods to supplement the grid at night. This capacity is not yet large enough to provide energy at all times, but Texas benefits from cheap & renewable energy.

This strategy is replicable. While hydropower runs all the time, solar & wind are less viable in New York than Texas due to location. However, the approach of cheapest energy first prioritizes offshore wind, hydroelectric, and nuclear. To benefit from the same cheap energy as Texas, New York could commission additional nuclear power plants in conjunction with backup power arrays to facilitate black starts. This is true for most of the North; the West can pursue solar and nuclear with wind in spots. The issue here is climbing costs of energy. The state can step in here, both by decreasing construction costs & encouraging buildout of newer reactors which spend less on fuel and are incapable of melting down. In terms of intervention, better battery & solar deployment coupled with East/West/Texas interconnections could drive power costs down, increase total & black start capacity, and reduce carbon emissions.

Why ERCOT?

This is one of the few areas in which we can have an excess of resources while reducing harm done to the environment, while also pursuing efficiency & cost improvements. A win-win scenario is possible and Texas’ logic in allowing buildout & operating cheap renewables over more expensive polluting plants happens to work well. Even with the large-scale system failure & my hypothermia, I have to hand it to them completely, but so far they represent some of the best we have in terms of energy resource management.