Sunday, February 21, 2021

Study shows real-world effectiveness of Moderna and Pfizer/BioNtech vaccines

By Sally Robertson, B.Sc.Feb 21 2021

Researchers in the United States have conducted a study demonstrating the real-world effectiveness of the recently approved Moderna and Pfizer/BioNtech vaccines at protecting against infection with severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) – the agent that causes coronavirus disease 2019 (COVID-19).

The team – from Nference in Cambridge, Massachusetts and the Mayo Clinic in Rochester, Minnesota –says the findings are on par with the results reported in large phase 3 randomized clinical trials.

The results showed that the vaccines are effective at both preventing infection and reducing the severity of COVID-19.

Venky Soundararajan and colleagues also demonstrate that vaccination effectively protects individuals at the highest risk of becoming infected with SARS-CoV-2 and experiencing severe disease.

“Building upon the previous randomized trials of these vaccines, this study demonstrates their real-world effectiveness in reducing the rates of SARS-CoV-2 infection and COVID-19 severity among individuals at the highest risk for infection,” write the researchers.

A pre-print version of the research paper is available on the medRxiv* server, while the article undergoes peer review.

Study: FDA-authorized COVID-19 vaccines are effective per real-world evidence synthesized across a multi-state health system. Image Credit: NIAID

The two vaccines are being rolled out across the United States

In 2020, large phase 3 clinical trials demonstrated that the Pfizer/BioNTech BNT162b2 vaccine is 95% effective at preventing symptomatic COVID-19 and that the Moderna mRNA1273 vaccine is 94.1% effective.

Both of these vaccines are now being rolled-out across the Unites States, with priority given to those at high risk of infection or severe disease.

However, “while these groups were not excluded from the phase 3 trials, vaccine efficacy has not been specifically demonstrated among them,” says Soundararajan and colleagues.

“It is thus critical to analyze outcomes of vaccinated patients to date to determine whether these vaccines are indeed effective in especially high-risk individuals.”

Schematic illustrating the algorithms for participant selection and outcome assessment. (A) Design of study to compare SARS-CoV-2 infection rates in patients receiving COVID-19 vaccination compared to 1-to-1 propensity-matched unvaccinated patients (n = 31,069 per group). For each group, incidence rates were calculated to assess the efficacy of vaccination in preventing SARS-CoV-2 infection, as defined by a positive PCR test, with onset at least 36 days after the first dose or the date of study enrollment. Several other time windows were also evaluated for vaccine efficacy. (B) Design of study to compare COVID-19 disease severity in patients who were vaccinated prior to diagnosis with COVID-19 and had at least 14 days of follow-up after diagnosis (n = 191) versus 1-to-10 propensity-matched unvaccinated patients with at least 14 days of follow-up (n = 2,348). Severity outcomes (hospitalization, ICU admission, and mortality) were assessed within 14 days of PCR diagnosis.

What did the current study involve?

Now, the team has conducted a preliminary assessment of real-world vaccination outcomes in 62,138 individuals within the Mayo Clinic health system (including Arizona, Florida, Minnesota, Wisconsin) between 1st December 2020 and 8th February 2021.

The researchers assessed SARS-CoV-2 positivity and COVID-19 severity among 31,069 individuals who received at least one dose of either the Pfizer/BioNTech BNT162b2 or the Moderna mRNA-1273 vaccine.

“One challenge inherent to such real-world analyses is the lack of a built-in placebo arm, which is essential to establish the expected infection rate during the study period and thereby to assess vaccine efficacy,” writes Soundararajan and colleagues.

To address this shortcoming, the researchers used 1-to-1 propensity score matching to generate a cohort of 31,069 individuals who did not receive a vaccine by the end of the study period.

Distribution of the time from first vaccine dose to first positive PCR test, for the patients with at least one positive PCR test following vaccination. Patient counts for mRNA-1273 (Moderna vaccine) are shown in black, and patient counts for BNT162b2 (Pfizer/BioNTech vaccine) are shown in purple. For mRNA-1273, the mean time to positive PCR test following the first dose is 10.9 days (standard deviation: 6.9 days), and for BNT162b2, the mean time to positive PCR test following the first dose is 12.1 days (standard deviation: 9.1 days). Dotted lines indicate the recommended time for the second vaccine dose for mRNA-1273 (28 days) and BNT162b2 (21 days).

Vaccine efficacy reached 88.7%

Starting 36 days following study enrollment, the incidence of SARS-CoV-2 positivity among individuals who received two vaccines was 0.048 cases per 1000 person-days, compared with 0.43 cases per 1,000 days among unvaccinated individuals.

This corresponds to a vaccine efficacy of 88.7%, which the team says is in line with the previously reported efficacies.

Even in the first seven days following enrollment, the incidence of SARS-CoV-2 positivity was significantly lower among vaccinated individuals than among unvaccinated individuals (0.48 versus 1.0 case per 1,000 days), corresponding to an efficacy of 53.6%.

Efficacy then increased over subsequent weeks and reached its maximum during the sixth week after study enrollment.

How did disease severity compare between the two groups?

Among the vaccinated individuals who tested positive for SARS-CoV-2, the 14-day hospitalization rate was significantly lower than among the unvaccinated individuals who tested positive, at 3.7% versus 9.2%.

On the other hand, ICU admission rates were similar between the two cohorts, at 1.0% versus 1.3%, as were 14-day mortality rates, at 0.0% versus 0.085%.

However, the team says it is worth noting that none of the vaccinated patients who developed COVID-19 have died, including 59 individuals who were followed up for at least 28 days.

“A strong real-world effect” of vaccination

“Our data demonstrate a strong real-world effect of COVID-19 vaccination on par with the results reported in each randomized trial,” writes Soundararajan and colleagues.
“We emphasize that COVID-19 vaccines should be administered as broadly and rapidly as possible to the public and that the real-world efficacy of these vaccines should be continuously monitored as we move beyond Phase 1a of the distribution process,” concludes the team.

*Important Notice

bioRxiv publishes preliminary scientific reports that are not peer-reviewed and, therefore, should not be regarded as conclusive, guide clinical practice/health-related behavior, or treated as established information.

Journal reference:

Soundararajan V, et al. FDA-authorized COVID-19 vaccines are effective per real-world evidence synthesized across a multi-state health system. bioRxiv, 2021. doi: https://doi.org/10.1101/2021.02.15.21251623, https://www.medrxiv.org/content/10.1101/2021.02.15.21251623v1

Former Bank of England Governor Carney joins board of digital payments company Stripe

Kanishka Singh
Sat, February 20, 2021

Mark Carney, Governor of the Bank of England (BOE) attends a news conference at Bank Of England in London

By Kanishka Singh

(Reuters) - Mark Carney, former head of the UK and Canadian central banks, has joined the board of U.S. digital payments company Stripe Inc, days after the company was reported to be planning a primary funding round valuing it at over $100 billion.

"Regulated in multiple jurisdictions and partnering with several dozen financial institutions around the world, Stripe will benefit from Mark Carney's extensive experience of global financial systems and governance", the company said on Sunday, confirming a report by the Sunday Times newspaper.

Forbes magazine had reported on Wednesday that investors were valuing Stripe at a $115 billion valuation in secondary-market transactions.

A senior Stripe executive told Reuters in December that the company plans to expand across Asia, including in Southeast Asia, Japan, China and India.

The company offers products that allow merchants to accept digital payments from customers and a range of business banking services.

Stripe raised $600 million in April in an extension of a Series G round and was valued back then at $36 billion.

Consumer-facing fintechs have seen a boost to their businesses during the COVID-19 pandemic, as people have been staying at home to avoid catching the virus and have increasingly been managing their finances online.

Carney, who headed the Bank of England and the Bank of Canada, had a 13-year career at Wall Street bank Goldman Sachs Group Inc in its London, Tokyo, New York and Toronto offices.

He is the United Nations special envoy on climate action and finance.

(Reporting by Kanishka Singh in Bengaluru; Editing by William Mallard)

Bubble Warnings Go Unheeded as Everyone Is a Buyer in Stocks

Lu Wang
Sat, February 20, 2021, 2:

(Bloomberg) -- The American love affair with stocks is deepening as everyone from frenetic day-traders to staid institutions dive further into the market.

Equity funds are drawing fresh money at an unprecedented pace and hedge funds are boosting their stock exposure to a record. Companies themselves are re-emerging as big buyers, with share repurchases doubling from a year ago.

The affection underscores growing confidence in an economic recovery, buttressed by government support and vaccines. While aspects of the craze -- the growing obsession with penny stocks and options, primarily -- are the basis for daily warnings about a bubble, bulled-up positioning is proving a sturdy backbone for the rally.

Up 75% from March, the S&P 500’s gain dwarfs all previous bull markets at this stage of the cycle since the 1930s.

“It’s been truly amazing,” said Brian Culpepper, a money manager at James Investment Research. “Everyone just thinks the stock market is going to go, go, go,” he added. “Whether it’s herd mentality, or fear of being left behind, that’s what you’re seeing.”

Dated from the last bear-market bottom, the boom cycle is young -- 11 months, versus five years for the median bull market. But its velocity makes up for the age. The S&P 500’s current peak-to-trough gain already eclipses three other full bull markets. If history is any guide, this one is likely more than half done as the median return of the 13 previous bull cycles was 126%.

Indeed, a majority of money managers in a Bank of America poll this month viewed the current bull market as being in a late stage.

“I don’t think we’re at bubble levels yet, but there are certainly some red flags that would indicate folks are all-in on stocks and risk,” said Michael Arone, chief investment strategist for the U.S. SPDR exchange-traded fund business at State Street Global Advisors. “You need that euphoric moment for the bull market to top.”

That danger has yet to register with investors. Last week, they poured $36 billion into funds focused on U.S. equities, the biggest inflow in more than two decades, according to data compiled by EPFR, a unit of Informa Financial Intelligence.

Hedge funds are trimming bearish bets while raising their bullish wagers. Their net leverage, a measure of industry risk appetite that takes into account long versus short positions, climbed to a record this month, according to data compiled by Goldman Sachs Group Inc.’s prime brokerage unit.

The cost of missing out is looming large on investors’ minds with equities having added a stunning $12 trillion to values since March. Valuations rivaling the dot-com era proved no hurdle to risk appetite. Buy-the-dip is the name of the game. As a result, market pullbacks have been shallow. The S&P 500 has staged seven discernible retreats since October, including one in late January, none going further than 4% before a rally took hold.

“There have been several times over the past month when it looked as if the rug had been pulled out from the market and the ‘drop’ had begun, but each time buyers have stepped in,” Saut Strategy’s Andrew Adams wrote in a note. “This isn’t a ‘normal’ market, but as long as it continues to press higher and higher, I think we’re almost forced to own stocks.”

Bears are almost nowhere to be found, with short sales dwindling to fresh lows amid January’s retail-driven short squeeze. In fact, according to a survey by the National Association of Active Investment Managers, the most-bearish group that typically has a net-short position was 80% long in stocks earlier this month before turning neutral.

Add corporate America to the growing army of buyers. Companies -- a reliable ally of the last bull market -- were forced to retreat and preserve cash during the 2020 pandemic, but are splurging on their own shares again. Their announced buybacks have averaged $6.9 billion a day this earnings season, the most since at least 2006, according to quarterly data compiled by EPFR.

“Buybacks tend to have a very high correlation with the performance of the S&P 500, so the boom in buybacks is encouraging,” said Winston Chua, an analyst with EPFR.

Pemex Gets New Tax Benefits

of as Much as $3.6 Billion

Amy Stillman
Sat, February 20, 2021

(Bloomberg) -- Mexico President Andres Manuel Lopez Obrador announced new tax benefits for Pemex as the beleaguered state oil company seeks to reverse long-term production declines and reduce debt.

Petroleos Mexicanos will get an additional 14% credit stimulus to apply to the taxes it pays on hydrocarbons capped at 73.3 billion pesos ($3.6 billion) for this year, according to a presidential decree. The new benefit comes in addition to previous measures that reduced Pemex’s profit-sharing duty from 65%, to 58% in 2020 and 54% in 2021, respectively.

Pemex says that it has one of the industry’s highest tax burdens, paying about $27 billion in net taxes last year, according to a January presentation. It’s debt of $110.3 billion is the highest of any major oil company, and its crude oil output has declined every year since reaching a peak in 2004.

Finance Minister Arturo Herrera said the government will be working on Pemex debt in the coming weeks, in an interview with Bloomberg News on Wednesday. The government will make a capital injection of as much as $1.6 billion into Pemex this year, said a person with knowledge who wasn’t authorized to talk publicly about the deliberations.

Electric Vehicle Registrations Reach New Record in US, With Tesla, GM Leading Way

Henry Khederian
Sat, February 20, 2021

Electric vehicle registrations in the US in 2020 reached a record market share of 1.8%, demonstrating increased consumer interest for electric vehicles.

What Happened: That's according to a study by IHS Markit Ltd (NYSE: IHS) released on Friday.

The report also says that December 2020 had the highest monthly share for new EV registrations, at 2.5%.

While roughly 1 in 40 registrations may seem like a drop of the bucket, it's the highest seen since IHS started tracking new vehicle registrations by fuel type.

IHS market defined an EV as an automobile powered solely by electricity. No other power source counted toward the EV registration market-share tally.

Why It Matters: Elon Musk’s Tesla Inc (NASDAQ: TSLA) stands to benefit from increased registrations.

According to a report by Automotive News, Tesla took four out of the top five spots for new EV registrations in 2020. Tesla accounted for 79% of the total, with 200,561 EVs registered. That represents a 16% increase from 2019, which saw 172,438 Tesla vehicles registered.

The Model 3 and Model Y led the way, with 95,135 and 71,344 vehicles registered, respectively.

General Motors Company (NYSE: GM) was the only company besides Tesla to crack the top 5 for US EV registrations in 2020. Its Chevy Bolt compact had 19,664 registrations in 2020.

Rounding out the top five for 2020 was Tesla's Model X with 19,652 registrations and Model S with 14,430.

IHS Markit forecasts EV sales in 2021 will surpass 3.5% nationally.

ECB set to disappoint campaigners on climate change

Martin Arnold in Frankfurt
Sat, February 20, 2021,

The European Central Bank is likely to adopt a less aggressive approach to tackling climate change than many campaigners want. It will rely mostly on improved financial modelling and disclosure rather than green asset purchases, according to several top policymakers. When the ECB governing council discussed climate change as part of its strategy review last week, there was broad consensus on the need for action.

BEHIND PAYWALL

World Bank, IMF to consider climate change

in debt reduction talks

IT SHOULD BE ELIMINATED NOT JUST REDUCED

Andrea Shalal
Fri, February 19, 2021,

FILE PHOTO: IMF and World Bank hold Fall Meetings in Washington

By Andrea Shalal

WASHINGTON (Reuters) - The World Bank is working with the International Monetary Fund (IMF) on ways to factor climate change into the negotiations about reducing the debt burdens of some poor countries, World Bank President David Malpass told Reuters in a Friday interview.

Three countries - Ethiopia, Chad and Zambia - have already initiated negotiations with creditors under a new Common Framework supported by the Group of 20 major economies, a process that may lead to debt reductions in some cases.

Malpass said he expected additional countries to request restructuring of their debts, but declined to give any details.

The coronavirus pandemic has worsened the outlook for many countries that were already heavily indebted before the outbreak, with revenues down, spending up and vaccination rates lagging far behind advanced economies.

China, the United States and other G20 countries initially offered the world's poorest countries temporary payment relief on debt owed to official creditors under the Debt Service Suspension Initiative (DSSI). In November, the G20 also launched a new framework designed to tackle unsustainable debt stocks.

Malpass said the Bank and the IMF were studying how to twin two global problems - the need to reduce or restructure the heavy debt burden of many poorer countries, and the need to reduce fossil fuel emissions that contribute to climate change.

"There's a way to put together ... the need for debt reduction with the need for climate action by countries around the world, including the poorer countries," he said, adding that initial efforts could happen under the G20 common framework.

Factoring climate change into the debt restructuring process could help motivate sovereign lenders and even private creditors to write off a certain percentage of the debt of heavily-indebted poorer countries, in exchange for progress toward their sustainable development and climate goals, experts say.

The World Bank and the IMF play an important advisory and consultative role in debt restructuring negotiations since they assess the sustainability of each country's debt burden.

Many developing countries require huge outlays to shore up their food supplies and infrastructure as a result of climate change. Governments must also spend a large amount on alternative energy projects, but lack the resources to pay for those needed investments.

"There needs to be a moral recognition by the world that the activities in the advanced economies have an impact on the people in the poorer economies," Malpass said.

"The poorer countries are not really emitting very much in terms of greenhouse gases, but they're bearing the brunt of the impact from the rest of the world," he added.

IMF Managing Director Kristalina Georgieva earlier this month told reporters about early-stage discussions underway about linking debt relief to climate resilience and investment in low-carbon energy sources.

Doing so, she said, could help private sector creditors achieve their sustainable development targets, she said.

"You give the country breathing space, and in exchange, you as the creditor can demonstrate that it translates into a commitment in the country that leads to a global public good," she said.

(Reporting by Andrea Shalal; Editing by Aurora Ellis)

Bill Gates Reveals What Caused Deadly

Power Outages in Texas

08:20 GMT 21.02.2021Get short URL

by Max Gorbachev

On Saturday, US President Joe Biden declared a major disaster in the Lone Star State allowing the government to allocate more funds to help millions of people affected by severe winter storms.

Bill Gates has revealed the reason behind the weather-induced crisis in Texas that resulted in power outages, leaving nearly half of the state's population under a boil advisory. In an interview with CNN, the Microsoft co-founder dismissed allegations made by Governor Gregg Abbott and other officials that solar panels and wind turbines were to blame for the massive outages in the state, noting that state's dependence on renewable energy isn't high enough.

Gates believes that the state's authorities should have spent money on weatherising energy plants. This, the software developer says, would have prevented the crisis.

"This is not because of renewable dependency. This is natural gas plants, largely, that weren't weatherised. They could've been. It costs money, and the trade-off was made, and it didn't work out, and it's tragic that it has lead to people dying", Gates told CNN.

Cataclysms, Instability, War

During the interview Bill Gates, who has donated over $50 billion to charitable causes, reiterated the need to address the global warming problem. Climate change is the root cause of all extreme weather events and the solution is green energy, Gates said. The philanthropist noted that without decisions on lowering carbon emissions and transition to renewable energy the world will face catastrophic consequences – the collapse of natural ecosystems as well as the inability to farm, which in turn will lead to war and instability.

According to the Microsoft co-founder, the deadline for the world to deal with the said issues is 2050. "2050 is literally the soonest it could get done given the scale and the number of things you have to change", Gates said.

The philanthropist believes that in an ideal world 80 percent of the energy will be renewable and come from solar panels and wind turbines, while 20 percent will come from nuclear plants. Gates even cited Texas as an example. When harsh climatic conditions make it unable to use green energy, a state can ramp up nuclear energy or draw from storage.

What Happened in Texas?

The Lone Star State as well as other parts of the United States has been affected by severe winter storms, with temperatures in typically balmy Texas plunging to their coldest in more than 30 years. The state's independent energy grid collapsed under high demand for heat and left millions of people without electricity. In Texas alone almost 50 people died due to the crisis, some of them due to carbon monoxide poisoning as they were running cars to stay warm.

City of Richardson worker Kaleb Love breaks ice on

a frozen fountain Tuesday, Feb. 16, 2021, in Richardson, Texas

The extreme temperatures also damaged the state's water pipes, which resulted in low water supply. In Austin, the capital, more than 325 million gallons of water were lost due to burst pipes. This also prompted local authorities to issue a boil water advisory for almost half of the state's 29 million people, as officials fear untreated water may have been infected with bacteria.

Electricity has been restored in many parts of Texas, though 80,000 homes were still in the dark on Saturday. Joe Biden declared a major disaster in Texas as well as a state of emergency in other states such as Louisiana and Oklahoma. Biden also said he would visit the state if it doesn't hamper the relief efforts under way there.

THE BIG FREEZE —
Deep in the heart of Texas’ collapsing power grid

Everything in Texas went wrong at once.

JOHN TIMMER - THURSDAY, 2/18/2021

Enlarge Aurich Lawson / Getty Images

Texas is now entering its third day of widespread power outages and, although supplies of electricity are improving, they remain well short of demand. For now, the state's power authority suggests that, rather than restoring power, grid operators will try to shift from complete blackouts to rolling ones. Meanwhile, the state's cold weather is expected to continue for at least another day. How did this happen?

To understand what's going on in Texas, and how things got so bad, you need quite a bit of arcane knowledge—including everything from weather and history to the details of grid structure and how natural gas contracts are organized. We've gathered details on as much of this as possible, and we also talked to grid expert Jeff Dagle at Pacific Northwest National Lab (PNNL). What follows is an attempt to organize and understand an ongoing, and still somewhat chaotic, situation.
Why is Texas so much worse off?

While other states have seen customers lose power, Texas has been hit the hardest, with far more customers losing power for substantially longer.

One key reason for this is because Texas maintains its own power grid largely in isolation from those of its neighbor states. In North America, most customers are served by two major grids that operate on the same alternating current frequency—one serving the eastern half of the continent (including the US, Canada, and parts of Mexico) and the other serving the western half. However, Texas—along with Quebec—both maintain power grids that are largely separate from these larger networks.

So, while problems elsewhere in the Midwest were partly buffered by generating capacity elsewhere in the country, Texas was on its own. It does have interconnections with neighboring grids, but they don't offer much in the way of capacity—and they weren't built for importing power anyway. According to Jeff Dagle of PNNL, these interconnections were mostly built by utilities near the border between grids so that the utilities could use power from whatever source happened to be cheapest at the time. Only half a dozen of these interconnects exist, and they can only handle a few hundred Megawatts each. This is simply "too small to matter," as Dagle put it.

Given that Texas and Quebec are both fierce defenders of their independence, it's tempting to view their insistence on maintaining their own grids as something of a caricature. But it's a caricature rooted in reality. Grids began to integrate because the easiest places to generate power—near large coal fields, for example—weren't necessarily close to large population centers. Texas remained relatively isolated during this buildout period because there weren't real advantages to integrating with its neighbors. Its grid ended up managed by ERCOT, the Electric Reliability Council of Texas, a nonprofit with a complicated state/private governance structure.

The map of the areas served by ERCOT. By not extending across the borders to other states, Texas has limited the federal regulation of its grid.

ERCOT

Then, when some degree of national power grid regulation began, it was done under the federal government's constitutional ability to regulate "interstate commerce." By purposely keeping its grid within the borders of Texas, the state limited the impact of federal standards and regulations. This deep-seated aversion to regulation recently prompted former US Energy secretary and Texas Governor Rick Perry to quip, "Texans would be without electricity for longer than three days to keep the federal government out of their business.”

How did a cold snap trigger this crisis?

The typical power demand profile in Texas would show a big peak in the summer, when most of the state has to run air conditioning 24 hours a day to keep its inhabitants from melting. Because of this, power generators schedule needed maintenance and upgrades for the winter months, when demand is generally lower. As a result, the Texas grid is less able to match spikes in demand during the winter.

And the recent cold snap set off a huge spike in demand. Lots of buildings in Texas are heated by electricity, and the cold, which blanketed the entire state, sent demand for heating through the roof. Natural gas is typically used where electricity isn't, and its increased use also set off a competition for gas supplies, which quickly became limited for reasons we'll get back to in a moment.

Typically, grid managers have a set of reserve plants that can be brought online if demand spikes suddenly. In a competitive electricity market, prices will rise if demand threatens to exceed supply, inducing producers to activate idle plants. For some reason, this didn't work out in Texas. ERCOT places a cap of $9,000 per Megawatt-hour on the cost of power in its grid. At various times after the cuts began, however, prices were only $1,200 per Megawatt-hour, and the Public Utilities Commission of Texas isn't sure why.

But even if reserves and economics had all kicked in, Texas wouldn't have avoided problems, because generating sources were shutting down left and right.

What shut down in Texas?

Pretty much everything, though for different reasons. Wind turbines iced up and stopped generating, cutting into the grid contribution of renewable power. But wind (and solar) don't produce as much power during the Texas winter under normal circumstances, so the loss of some capacity there wasn't as much of a problem as it might have been in summer; they weren't expected to produce much anyway.

As we mentioned above, the natural gas market saw power generators competing with home users for a limited supply of natural gas. That gas supply ended up being even more limited by the fact that as much as half the state's natural gas production may have ground to a halt. Natural gas doesn't come out of the wells as a pure gas, and one of its major contaminants is water. As temperatures dropped, that water froze in inopportune places, choking off the flow of gas.

Texas happens to have the second-largest capacity to store natural gas of all the states. It's not clear whether storage suffered from similar problems or if there was some other reason it couldn't buffer the loss of supply.

Enlarge / The shutdown of large areas of the power grid has shutdown a lot of the things people count on for day-to-day living, like this grocery store.
Montinique Monroe / Getty Images

In any event, in the competition between power plants and residential users for the limited gas supplies, residential users won. PNNL's Dagle told Ars that most of the contracts for natural gas delivery can be broken without penalty if the supply isn't there. That's partly because there are alternate ways for grid operators to generate power, while many residences have no other way to produce heat. But Dagle said it was also for practical reasons; it's easy and safe to restart a couple of gas turbines when supply returns, but it's a nightmare to ensure that every consumer gas-fueled appliance is operating safely when gas is restored.

"When the gas supply's constrained, the contract calls for them to be curtailed on the generation-side," Dagle told Ars. "That's quite normal."

A somewhat larger surprise was that Texas also lost nuclear and coal capacity. Rick Perry, while at the Department of Energy, tried to pay coal and nuclear plants to keep fuel stored onsite (a policy that ended up being rejected), under the assumption that it would ensure a reliable supply of energy. Clearly, that didn't work out. And there's some reason to expect it wouldn't help in cases like this, as giant piles of coal can completely ice over in cold weather, making it difficult to use.Advertisement

Beyond that, Dagle said that both coal and nuclear rely on water to generate power. This water has to replace any of the material that's lost as steam from the portion used for generation, and it may be used as part of a cooling or condensing system. If the water intakes freeze up, then the plant will inevitably have to shut down.
Shouldn’t Texas have been ready for this?

Yes and no—it depends on how you define "this."

Power plants obviously operate much farther north than Texas, in areas where the conditions Texas is facing now are normal for weeks or months at a time. There are ways to cold-proof various systems; wind turbines, for example, can have heaters embedded in the blades to shed ice when needed, intake pipes can be heated by exhaust from power plants, etc. But all of these measures cost additional money, which may be difficult to justify if the conditions they're needed for are extremely rare.

It turns out that these conditions are rare in Texas, but not extremely so; Texas faced something similar a decade earlier, in 2011, when its grid suffered similar failures. In the wake of these earlier problems, the Federal Energy Regulatory Commission (FERC) issued a report suggesting changes to the grid in order to prevent a recurrence. Obviously, if there's a similar event today, it must mean those changes weren't made, right?

Not quite. Dagle told Ars that the earlier event was probably not as cold as the conditions Texas has faced this week. Even if the people operating power plants had made changes that would have gotten them through the 2011 event, those changes might not have been sufficient to handle this week. In addition, the Texas grid, like the rest of the US, has become increasingly reliant on natural gas supplies over the last decade. According to the FERC report, in 2011, Texas lost over a million Megawatt-hours to frozen hardware and mechanical failures; it lost only 120,000 Megawatt-hours to fuel supply problems. The reported problems with natural gas supplies this time around suggest that those numbers will now look very different.

Enlarge / While bad weather can damage transmission hardware, so far, most of Texas' problems appear to be on the generation-side.
Ron Jenkins / Getty Images

Finally, Dagle noted that, in the absence of actual cold weather, it's hard to test whether the hardware you've put in place to protect against it is actually effective. "It's kind of hard to find all these problems when you can't test it," Dagle said. In Minnesota, you will know if things work in the next winter. In Texas, you might have to wait a decade for a stress test.

"Clearly, they didn't do enough," Dagle told Ars, "but I don't know how fair it is to be too critical."

What do we do now?

Over the course of Wednesday, ERCOT seems to have brought roughly 7 Gigawatts of generating capacity back on line, and supplies have continued to ramp up on Thursday. Its measure of demand has also gone up, but that's not an indication that actual demand is lagging supply; instead, it means more areas of the grid are receiving power. In other words, ERCOT is still managing demand by keeping power cut off to many locations.

Demand has to be kept well below supply because ERCOT plans to start shifting back to rolling blackouts and away from permanent shutdowns. This presents a big challenge, because lots of appliances—heaters, refrigerators, and such—will immediately shift to operating at maximum levels the moment that power is restored. Doing this safely, by ensuring that there's enough excess power to cover this surge, requires building lots of models based on a neighborhood's typical usage—a process that grid operators have hopefully been engaged with since the blackouts began in earnest.

Enlarge / A utilities truck drives down the street in front of darkened homes in McKinney, Texas.
Bloomberg / Getty Images

There's good news on the way, though, with our own Eric Berger indicating that warm weather should take hold on Friday, reducing power demand, potentially restoring more hardware to service, and hopefully getting more natural gas into the pipelines. For those who have been suffering in the dark for days, Friday remains a long way off, but the end is at least in sight.

Key steps will still need to be taken months from now. That's when the data should be gathered to analyze what went wrong and figure out how to build a more resilient—and necessarily more expensive—grid. It may also involve Texas giving up a bit of its "go it alone" attitude and forging deeper connections with neighbors, possibly accepting a greater degree of federal oversight. Dagle told Ars that the North American Electric Reliability Corporation, which sets standards for the combined US-Canadian grids, has new standards out for cold-weather operations. These might provide a useful guide for how to avoid events like this in the future, but the standards aren't mandatory yet.

Dagle highlighted the concept of resilience. "Resilience is imagining the things that could go wrong and making sure that we're prepared to accommodate that," he said. That means thinking beyond simply matching the last major cold wave. "Maybe we could have done a better job envisioning temperatures even more extreme than what we saw last time," he said. "Have we put enough counter measures there to handle that?"

While such resilience might make electricity somewhat more expensive, it's also a strong insurance policy against the staggering losses that are being incurred with most of the state shut down entirely.

So far, the signs for change aren't good. In addition to Perry's quip about Texans being willing to suffer through blackouts to avoid any oversight, the present Texas governor, Greg Abbott, is busy blaming renewable power for failures that disproportionately affected fossil fuel generation.

Why a predictable cold snap crippled the Texas power grid

By Tim McLaughlin, Stephanie Kell

(Reuters) - As Texans cranked up their heaters early Monday to combat plunging temperatures, a record surge of electricity demand set off a disastrous chain reaction in the state’s power grid.

Wind turbines in the state’s northern Panhandle locked up. Natural gas plants shut down when frozen pipes and components shut off fuel flow. A South Texas nuclear reactor went dark after a five-foot section of uninsulated pipe seized up. Power outages quickly spread statewide - leaving millions shivering in their homes for days, with deadly consequences.

It could have been far worse: Before dawn on Monday, the state’s grid operator was “seconds and minutes” away from an uncontrolled blackout for its 26 million customers, its CEO has said. Such a collapse occurs when operators lose the ability to manage the crisis through rolling blackouts; in such cases, it can take weeks or months to fully restore power to customers.

Monday was one of the state’s coldest days in more than a century - but the unprecedented power crisis was hardly unpredictable after Texas had experienced a similar, though less severe, disruption during a 2011 cold snap. Still, Texas power producers failed to adequately winter-proof their systems. And the state’s grid operator underestimated its need for reserve power capacity before the crisis, then moved too slowly to tell utilities to institute rolling blackouts to protect against a grid meltdown, energy analysts, traders and economists said.

Early signs of trouble came long before the forced outages. Two days earlier, for example, the grid suddenly lost 539 megawatts (MW) of power, or enough electricity for nearly 108,000 homes, according to operational messages disclosed by the state’s primary grid operator, the Electric Reliability Council of Texas (ERCOT).

The crisis stemmed from a unique confluence of weaknesses in the state’s power system.

Texas is the only state in the continental United States with an independent and isolated grid. That allows the state to avoid federal regulation - but also severely limits its ability to draw emergency power from other grids. ERCOT also operates the only major U.S. grid that does not have a capacity market - a system that provides payments to operators to be on standby to supply power during severe weather events.

After more than 3 million ERCOT customers lost power in a February 2011 freeze, federal regulators recommended that ERCOT prepare for winter with the same urgency as it does the peak summer season. They also said that, while ERCOT’s reserve power capacity looked good on paper, it did not take into account that many generation units could get knocked offline by freezing weather

“There were prior severe cold weather events in the Southwest in 1983, 1989, 2003, 2006, 2008, and 2010,” Federal Energy Regulatory Commission and North American Electric Reliability Corp staff summarized after investigating the state’s 2011 rolling blackouts. “Extensive generator failures overwhelmed ERCOT’s reserves, which eventually dropped below the level of safe operation.”

ERCOT spokeswoman Leslie Sopko did not comment in detail about the causes of the power crisis but said the grid’s leadership plans to re-evaluate the assumptions that go into its forecasts.

The freeze was easy to see coming, said Jay Apt, co-director of the Carnegie Mellon Electricity Industry Center.

“When I read that this was a black-swan event, I just have to wonder whether the folks who are saying that have been in this business long enough that they forgot everything, or just came into it,” Apt said. “People need to recognize that this sort of weather is pretty common.”

This week’s cold snap left 4.5 million ERCOT customers without power. More than 14.5 million Texans endured a related water-supply crisis as pipes froze and burst. About 65,000 customers remained without power as of Saturday afternoon, even as temperatures started to rise, according to website PowerOutage.US.

State health officials have linked more than two dozen deaths to the power crisis. Some died from hypothermia or possible carbon monoxide poisoning caused by portable generators running in basements and garages without enough ventilation. Officials say they suspect the death count will rise as more bodies are discovered.

THIN POWER RESERVE

In the central Texas city of Austin, the state capital, the minimum February temperature usually falls between 42 and 48 degrees Fahrenheit (5 to 9 degrees Celsius). This past week, temperatures fell as low as 6 degrees Fahrenheit (-14 degrees Celsius).

In November, ERCOT assured that the grid was prepared to handle such a dire scenario.

“We studied a range of potential risks under both normal and extreme conditions, and believe there is sufficient generation to adequately serve our customers,” said ERCOT’s manager of resource adequacy, Pete Warnken, in a report that month.

Warnken could not be reached for comment on Saturday.

Under normal winter conditions, ERCOT forecast it would have about 16,200 MW of power reserves. But under extreme conditions, it predicted a reserve cushion of only about 1,350 MW. That assumed only 23,500 MW of generation outages. During the peak of this week’s crisis, more than 30,000 MW was forced off the grid.

Other U.S. grid operators maintain a capacity market to supply extra power in extreme conditions - paying operators on an ongoing basis, whether they produce power or not. Capacity market auctions determine, three years in advance, the price that power generators receive in exchange for being on emergency standby.

Instead, ERCOT relies on a wholesale electricity market, where free market pricing provides incentives for generators to provide daily power and to make investments to ensure reliability in peak periods, according to economists. The system relied on the theory that power plants should make high profits when energy demand and prices soar - providing them ample money to make investments in, for example, winterization. The Texas legislature restructured the state’s electric market in 1999.

LOOMING CRISIS

Since 2010, ERCOT’s reserve margin - the buffer between generation capacity versus forecasted demand - has dropped to about 10% from about 20%. This has put pressure on generators during demand spikes, making the grid less flexible, according to North American Electric Reliability Corporation (NERC), a nonprofit regulator.

That thin margin for error set off alarms early Monday morning among energy traders and analysts as they watched a sudden drop in the electrical frequency of the Texas grid. One analyst compared it to watching the pulse of a hospital patient drop to life-threatening levels.

Too much of a drop is catastrophic because it would trigger automatic relay switches to disconnect power sources from the grid, setting off uncontrolled blackouts statewide. Dan Jones, an energy analyst at Monterey LLC, watched from his home office in Delaware as the grid’s frequency dropped quickly toward the point that would trigger the automatic shutdowns.

“If you’re not in control, and you are letting the equipment do it, that’s just chaos,” Jones said.

By Sunday afternoon about 3:15 p.m. (CST), ERCOT’s control room signaled it had run out of options to boost electric generation to match the soaring demand. Operators issued a warning that there was “no market solution” for the projected shortage, according to control room messages published by ERCOT on its website.

Adam Sinn, president of Houston-based energy trading firm Aspire Commodities, said ERCOT waited far too long to start telling utilities to cut customers’ power to guard against a grid meltdown. The problems, he said, were readily apparent several days before Monday.

“ERCOT was letting the system get weaker and weaker and weaker,” Sinn said in an interview. “I was thinking: Holy shit, what is this grid operator doing? He has to cut load.”

Sinn said he started texting his friends on Sunday night, warning them to expect widespread outages.

‘SECONDS AND MINUTES’

Early Monday morning, one of the largest sources of electricity in the state - the unit 1 reactor at the South Texas Nuclear Generating Station - stopped producing power after the small section of pipe froze in temperatures that averaged 17 degrees Fahrenheit (9 degrees Celsius). The grid lost access to 1,350 MW of nuclear power - enough to power about 270,000 homes - after automatic sensors detected the frozen pipe and protectively shut down the reactor, said Victor Dricks, a spokesman for the U.S. Nuclear Regulatory Commission.

About 2:30 a.m. (CST), the South Plains Electric Cooperative in Lubbock said it received a phone call from ERCOT to cut power to its customers. Inside the ERCOT control room, staff members scrambled to call utilities and cooperatives statewide to tell them to do the same, according to operational messages disclosed by the grid operator.

Three days later, ERCOT Chief Executive Bill Magness acknowledged that the grid operator had only narrowly avoided the calamity of uncontrolled blackouts.

“If we hadn’t taken action,” he said on Thursday, “it was seconds and minutes (away), given the amount of generation that was coming off the system at the same time that the demand was still going up.”

Reporting by Tim McLaughlin and Stephanie Kelly; additional reporting by Nichola Groom; editing by Simon Webb and Brian Thevenot