Source: Zhitong Finance

Electricity prices in Texas soared nearly 100 times as a number of power plant outages raised concerns about a possible nighttime power shortage. According to data from the Texas Electricity Reliability Commission, the spot price of electricity jumped to more than $3,000 per megawatt-hour before 7 p.m. local time, compared to around $32 for the same period on Tuesday.

Texas power grid operator Ercot released an “observation report” on Wednesday, saying there may be a shortage of electricity reserves from 7 p.m. to 9 p.m., which means that backup supply buffers may drop to a low enough level to require backup power generation, cancel or delay power outages, or restrict use.

The current supply situation is the tightest since this year, increasing the risk that the price will rise to the upper limit of $5,000. The region's unusually hot weather increased cooling requirements and reduced the efficiency of many power plants. Wind power generation has also declined from the previous day, and power outages have also increased.

High electricity prices could force big consumers, including Bitcoin miners, to cut back on their business within a few hours. Batteries are also expected to increase to keep the grid stable.

The impact of soaring electricity prices on consumers will depend on their retail contracts, and local governments require families to choose third-party suppliers and decide in advance whether to lock in prices for a month or even a few years. From February 2021, retailers are prohibited from fully disclosing wholesale prices to residential consumers.