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Profitability and investment risk of Texan power system winterization


A lack of winterization of power system infrastructure resulted in substantial rolling blackouts in Texas in 2021, but debate about the cost of winterization continues. Here we assess if incentives for winterization on the energy-only market are sufficient. We combine power demand estimates with estimates of power plant outages to derive power deficits and scarcity prices. Expected profits from winterization of a large share of existing capacity are positive. However, investment risk is high due to the low frequency of freeze events, potentially explaining the under-investment, as do the high discount rates and uncertainty about power generation failure under cold temperatures. As the social cost of power deficits is one to two orders of magnitude higher than the winterization cost, regulatory enforcement of winterization is welfare enhancing. Current legislation can be improved by emphasizing the winterization of gas power plants and infrastructure.

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Fig. 1: The February 2021 event in retrospect.
Fig. 2: Analysis of extreme temperatures and simulated loss-of-load events.
Fig. 3: Extreme value statistics of temperature and power deficits.
Fig. 4: Trend in loss-of-load events.
Fig. 5: Revenues from winterization.

Data availability

Aggregated climate data from ERA5 as well as results from the analysis, such as estimated load and threshold time series resulting from available capacity reduced by estimated outages and marginal winterization cost under different scenarios, are provided openly to the community on Zenodo: Data from public institutions, in particular ERCOT, the Energy Information Administration and the Texas Railroad Commission, are not available under an open license. However, within the description of the repository, links to data sources and the whole code, including download scripts, are provided so that our analysis, and in particular all figures, can be fully reproduced. Source data are provided with this paper.

Code availability

Code is published in a Github repository. The repository can be found at


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We gratefully acknowledge support from the European Research Council (‘reFUEL’ ERC2017-STG 758149; J.S.). We are grateful to E. Virgüez, who provided spatial locations of power plant outages and with whom we exchanged early results, and to S. Wehrle with whom we extensively discussed the paper.

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Authors and Affiliations



Conceptualization: K.G., T.G., P.R., G.L. and J.S.; software: K.G., T.G., P.R. and J.S.; investigation: K.G., T.G., P.R., G.L. and J.S.; writing the original draught: K.G., G.L., P.R. and J.S.; reviewing and editing the paper: K.G., T.G., G.L., P.R. and J.S.; visualization: K.G., T.G. and P.R.; supervision: J.S.; and funding acquisition: J.S. K.G. and J.S. equally contributed as first authors to the manuscript.

Corresponding author

Correspondence to Katharina Gruber.

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The authors declare no competing interests.

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Nature Energy thanks Peter Cramton, Le Xie and the other, anonymous, reviewer(s) for their contribution to the peer review of this work.

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Supplementary information

Supplementary Information

Supplementary Notes 1–6, Figs. 1–13, Tables 1 and 2 and Methods.

Source data

Source Data Fig. 1

Time series of load, available capacity, outages and temperatures.

Source Data Fig. 2

Time series of estimated load and available capacity.

Source Data Fig. 3

Description of outage events.

Source Data Fig. 4

Year and size of events.

Source Data Fig. 5

Bootstraps of marginal revenues of loss-of-load events for winterization of one additional gigawatt for all technologies.

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Gruber, K., Gauster, T., Laaha, G. et al. Profitability and investment risk of Texan power system winterization. Nat Energy 7, 409–416 (2022).

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