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What caused the February 2021 Texas electric supply crisis?

Prolonged, unexpected cold weather created unexpectedly high electric and gas demand. Supply systems could not keep up.

If farmers grow too much wheat, you get a big pile of wheat. If utilities generate too much electricity, overproduction does not create a big pile of electricity. It just heats up the transmission wires. Electric storage systems exist, but Texas does not have the elevation changes required for large scale hydroelectric storage. Utility scale battery systems are a developing technology and have not been widely deployed.

Generation utilities do not run power plants unless the system operator has requested that they do so. Such requests usually require at least a few hours of advance notice. Several large generation systems were down for scheduled maintenance, because Texas needs more generation capacity in the hot summer months. Large-scale maintenance and repairs are winter projects. Once it became apparent that more electricity was required, generation plants that were closed for maintenance, or because demand is lower, could not restart instantly.

Price is the usual signal for demand reduction in a well-functioning free market, but consumers have no way to see, or react to, electric price signals. Electric meters in Texas’ homes and businesses are not set up to automatically lower thermostats if the electric price suddenly increases from fourteen cents to $1.40 per kilowatt-hour.

With no way to draw down previously generated inventories, no way to produce more electricity and no way for consumers to immediately reduce demand, grid operator ERCOT initiated rolling blackouts in most of Texas early on Monday, Feb. 15, 2021, forcing demand down to avoid a complete system shutdown.

Early conversations attributed the lack of electric supply to low wind generation. Wind turbines are designed to stop during extreme weather, to keep the blades from throwing off ice. However, not all the turbines in Texas stopped operating at the same time, and they recovered quickly. Wind production dropped in the early hours of the crisis, but wind generation was over forecast (about 6,000 megawatts [MW] to start with) by the time rolling blackouts started. Solar panels produce more in cold weather. ERCOT credited solar power availability with helping to restore service more quickly than anticipated within four days.

The crisis was caused by legacy generation systems failing on a large scale. About 80% of Texas’ winter electric generation capacity comes from gas, coal and nuclear power. About half of that went offline. Gas usage for heating increased, reducing gas supplies for electric generation, just as gas production declined by as much as 50% because wells were too cold to produce. Pipelines froze and gas pressures declined in the system due to the cold. As electric generation declined, gas system pumps that use electricity did not have electricity. About 30,000 MW of gas-fired electric plants may have been offline, relative to anticipated (pre-crisis) demand of about 70,000 MW. Coal plant instrumentation froze and at least 1,000 MW of coal power went offline. Even nuclear power, which is usually extremely reliable, failed. A 1,300 MW nuclear generating station went offline when ice blocked its cooling water pump’s intake, causing the reactor’s safety systems to shut the plant down.