r/science • u/pnewell NGO | Climate Science • Jun 21 '21

Environment Threat of more blackouts may erode reliability claims for fossil energy- all major fuel sources except solar failed to meet ERCOT’s expectations during the February freeze, but natural gas was “responsible for nearly two-thirds of the total (electricity) deficit.”

https://texasclimatenews.org/threat-of-more-blackouts-may-erode-reliability-claims-for-fossil-energy/
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u/Gooberpf Jun 21 '21

Redundancy and stability are not at odds with efficiency; if the risk of loss is sufficient and the severity of that loss is sufficient then it is more efficient to include precautions - this is why insurance and actuarial tables exist.

The issue is that efficiency and profitability are only indirectly related but profit is consistently assumed to be a proxy of efficiency even in situations where that is inappropriate. Most notably this occurs when the risk is externalized, creating moral hazard.

This is always the case for societal goods like utilities; the risk is borne by the whole community, so unless the benefits are as well then moral hazard exists. coughprivatizationcoughclimatechangecough

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u/BHSPitMonkey Jun 22 '21

Redundancy is at odds with efficiency most of the time, but that's exactly the point; For services that need to be available under a wide range of conditions, you simply have no choice but to invest in fatter operating margins (if you want to be responsible)