Tag Archives: Texas freeze

Wind Power Is a Disaster in Texas, No Matter What Paul Krugman Says, by Robert P. Murphy

Texas was producing a lot more natural gas power than usual and a lot less wind power than usual during the recent freeze. From Robert P. Murphy at mises.org:

In the wake of February’s tragic power outages in Texas, during which 4.5 million households suffered service interruptions, partisans on both sides have been quick to interpret the events as confirmation of their preferred energy policies. With news images of helicopters deicing frozen turbines, conservatives lambasted Texas’s increasing reliance on wind power as the villain in the story.

Trying to temper this knee-jerk reaction, Reason.com columnist Ron Bailey argued that “[m]ost of the shortfall in electric power generation during the current cold snap is the result of natural gas and coal powered plants going offline.” And Paul Krugman for his part declared that it was a “malicious falsehood” to blame wind and solar power for what happened in Texas, as it was primarily a failure of natural gas.

In this article I’ll lay out the basic facts of which power sources stepped up to the plate during the crisis. Contrary to what you would have known from reading Ron Bailey (let alone Paul Krugman), when the Texas freeze hit, electricity from natural gas skyrocketed while wind output fell off a cliff. The people arguing that wind wasn’t to blame mean it in the same way Jimmy Olson wasn’t to blame when General Zod took over: wind is so useless nobody serious ever thought it might help in a crisis.

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It Starts: The Cascading Financial Repercussions of the Texas Electricity Crisis, by Wolf Richter

It looks like the Texas freeze is going to wipe some businesses out. From Wolf Richter at wolfstreet.com:

Now hoping for “corrective action” and “credit intervention” by the State of Texas.

The financial repercussions of the winter-storm electricity crisis in Texas have entered the confession phase.

Just Energy Group, the Canada-based retailer of electricity and natural gas that is heavily involved in Texas, announced this morning in an SEC filing that it might have lost $250 million over the few days during the “Weather Event” in Texas, and that “the financial impact could change as additional information becomes available,” and that “once known,” the financial impact “could be materially adverse to the Company’s liquidity and its ability to continue as a going concern.”

This “going concern” warning is a standardized accounting term for the acknowledged possibility that the company might not be able to meet its obligations and might not be able to stay afloat.

In terms of its “liquidity”: The $250 million loss over the past few days contrasts with just $78 million in cash on hand that the company reported in its most recent earnings report for the quarter ended September 30. It also had $780 million in long-term debt, a third of which comes due this year. And its balance sheet has been hollowed out to where its stockholder equity is negative (-$500 million).

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