This research analyzes the causes of the February 2021 Texas “Big Freeze” power outages that caused the death of nearly 200 people and more than $90 billion in economic damages, finding ERCOT’s market design failed both to prepare the state and acceptably manage the crisis. The research identifies lessons learned from the crisis to help policymakers in Texas and other grid regions better prepare for more frequent extreme weather events including taking a more holistic approach to risk management, planning for “managed failure” of the grid, and deploying more demand-side measures like weatherizing homes.
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