The devastating Texas blackouts explained in 3 levels of detail
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If there was one meme that captured the week, it'd probably be the image of Ted Cruz on Mars through the lens of the brand new Perseverance rover.
The rover successfully touched down on the red planet yesterday - a major scientific feat, by the way - and beamed images back to Earth. Meanwhile, hundreds of thousands of Texans remained without power, after a winter storm pummeled the state.
Let's start with the blackouts.
The latest: Power has been restored to most of the 3-million-plus Texans who were plunged into darkness earlier this week.
- About 193,000 customers were without power across the state, as of Friday morning, according to a company that tracks outages.
- About 34 gigawatts of the grid's generation capacity is still offline.
Misinformation flooded the internet following the blackouts. Here's what actually happened, in three levels of detail.
Level 1: An unusual winter storm struck the state, causing power plants to malfunction right when demand for electricity shot up as people tried to stay warm.
- The grid operator was forced to cut power to millions of households because there wasn't enough energy to go around.
Level 2: Most of the power sources that went offline were run on so-called thermal energy, which includes natural gas, coal, and nuclear. Offline wind turbines and solar panels accounted for a smaller portion of the outages.
- Power plants run on natural gas typically rely on a constant flow of gas. Freezing temperatures made it difficult to pump and transport the fuel.
- Some wind turbines and other energy sources that were not properly winterized also stopped working.
- Companies that produce power can take steps to ensure their equipment runs properly during extreme weather events, but winterization is expensive and not a priority in warm regions.
- In fact, power producers were advised a decade ago to take those steps.
Level 3: Texas is unusual in that most of the state relies on its own, deregulated energy grid. Other states like New York have a small footprint in a much larger interconnected grid.
- That means Texas can't easily draw power from other regions of the country that aren't suffering from similar weather conditions (though many were this week.)
- The deregulated nature of the grid may also have played a role. The state has a competitive market for electricity, with lots of different companies making and selling energy. They're incentivized to produce very cheap electrons.
Climate changemay also deserve some blame. The science is still a bit hazy, but there's some indication that global warming disrupts weather patterns in a way that can produce cold snaps, like the one in Texas.
I'm not gonna lie: I was nervous as I clicked the link to join Bill Gates on a video call last month, connecting my small Brooklyn apartment to his panoramic conference room that overlooked the Pacific Ocean.
Gates and I talked for just under an hour about climate change, the technologies that he thinks will slow it down, whether the oil industry should be regulated, and what he wants Biden to prioritize. You can read the full interview here.
Tech: Gates is very tech-oriented, obviously. He believes the key to slowing climate change is shrinking the cost, via innovation, of a handful of green technologies in order to make them just as cheap as their polluting alternatives.
- He details those technologies here.
- Gates also mentioned that his venture fund, Breakthrough Energy Ventures, is looking for two kinds of startups.
Policy: Gates laid out 4 things the Biden administration should do to tackle the climate crisis, including creating an NIH for clean energy. You can read more about that here.
A large European investor with close to $100 billion in AUM is the latest Exxon shareholder to divest from the company, citing climate change concerns, Insider's Theo Golden and I reported this week.
- The Netherlands-based firm, Kempen Capital Management, had a $22.5 million stake in Exxon.
- In October, the Church of England Pensions Board, which had a much larger stake, divested its shares as well, Bloomberg reported.
What Kempen said: "We initially acquired Exxon for our portfolio years ago because we found the valuation quite attractive and we were hoping for a positive engagement," Dimitri Willems, a senior portfolio manager at Kampen, told us in an exclusive interview. "But it did not work out that well - they weren't really open for engagement or for change."
What to watch: Exxon is hosting its annual shareholder meeting this spring. Activist investors are hoping to use the event to push the oil giant to make additional changes to its board and strategy to reduce emissions.
- To be clear, Exxon has made several recent announcements, including that it established a new $3 billion low-carbon business. Some investors say those actions don't go far enough.
It's probably a technology you've never heard of, but geothermal energy - generated from the heat inside Earth's crust - has caught the attention of major investors including Bill Gates, Google, and BP.
This week: Geothermal startups Dandelion Energy and Eavor each announced new raises in the tens of millions.
- Dandelion is targeting the residential market, using thermal energy in the Earth's crust to heat and cool homes. The company announced $30 million in new funding, in a round led by Bill Gates' BEV. (We profiled the company here.)
- Eavor, on the other hand, will use geothermal energy to make electricity. The Calgary-based startup said it raised $40 million from investors including the venture arm of BP and Chevron.
That's it! Have a great weekend.
Ps. I found out what kind of dog Jumi is. I was shocked: German Shepherd, Great Pyrenees, American Bully, and Pitbull, with a little Staffordshire Terrier. Big boy energy. (Pps. he destroyed a feather pillow while I was writing this ...)
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