This week, starkly contrasting extreme weather events in the United States and Australia highlighted a universal challenge for energy systems. In the US, Winter Storm Fern drove up heating demand during freezing temperatures, while in Australia, record summer heatwaves spiked demand for cooling. These situations underscore that as countries increasingly face extreme weather, maintaining a diverse and resilient energy mix is critical.

Weather-Driven Stress on Diverse Energy Sources

Recent years have shown how climate conditions strain energy supplies during the transition to lower-carbon generation. In southeast Australia, gas-fired and other thermal generation were required to supplement substantial wind and solar output to meet cooling demand. Conversely, in Texas, wind power—the state has the largest installed capacity in the US—worked alongside dominant gas-fired generation to meet heating needs. These events demonstrate the complementary role different energy sources play during weather extremes.

Vulnerabilities Across the Energy Spectrum

The transition exposes vulnerabilities in various power sources. The German term 'dunkelflaute' describes periods of still, cloudy weather that slash renewable output, often coinciding with high heating demand and causing sharp power price spikes, as seen in Australia. Nuclear power is also vulnerable; last year, hot conditions in France and Switzerland warmed reactor cooling water sources, forcing facilities offline during high air-conditioning demand, which drove up prices. Furthermore, droughts and floods associated with extreme weather challenge hydropower, a source many countries rely on for steady, clean energy.

The Critical, Yet Vulnerable, Role of Gas

These examples underscore the importance of natural gas as a highly flexible component of energy systems, whether as a transition fuel or a replacement for coal. However, gas supply itself is vulnerable to weather. This week in the US, the storm hit an estimated 11% of natural gas production, doubling prices. This impact rippled globally due to the US's role as a major LNG exporter, amplified because the supply disruption occurred when domestic and international demand was particularly high.

The Imperative for System Resilience

While consumers bear short-term price costs, a resilience deficit poses long-term risks for producers, especially in a global market where competitors may not face similar weather challenges. Texas's improved ability to keep power on during this freeze, aided by winterization efforts after previous events, shows the value of learning from past failures. As the push for energy independence and a shift to low-carbon energy continues, demand for oil and gas will eventually decline. Until that time, it is critical to build resilience into all energy systems—whether powered by renewables, gas, or other sources—to withstand extreme weather and other challenges.