Indirect Cost Estimation of Winter Storm–Induced Power Outage in Texas

Abstract

In February 2021, Texas was hit by a severe winter storm. The extreme cold weather triggered an unprecedented increase of electricity demand and simultaneous failure of multiple electricity grid components. The dual effect caused a widespread power outage that left millions of Texans without power for days. This paper estimates the indirect economy-wide cascading impact of that power outage. It utilized historical make and use tables between 1997 and 2019 in an inoperability input-output analysis–based economic impact assessment model to quantify the expected indirect cost of the power outage in terms of the loss of gross domestic product of Texas. This research found that expected loss to be approximately $664 million in 2019 values. It also found that in Texas industries such as oil and gas extraction, petroleum, coal products, and so on are particularly vulnerable to such weather-related prolonged power outages. The outcomes of this paper can be used in planning for strategies to make the grid robust, reliable, and resilient to severe weather events. The identification of vulnerable industries can also help in planning for auxiliary capacities so the cascading economic impacts of the weather-related power outages can be reduced.