It has been 4 days since one of the worst grid blackouts in U.S. history began in Texas early Monday morning on February 15th, 2021.

The blackouts caused an avalanche of suffering for Texans that endured into Thursday as we write this post. The event left more than 5 million residents without power for days during the record-setting winter storm. As the catastrophe continued to unfold, shortages of electricity, heat, potable water, fuel and even food pushed Texas populations to the brink.

Satellite imagery shows just how complete the devastation was with nearly the entire state of Texas blanketed in snow and sub-freezing temperatures – leaving many residents with no way to keep warm.

Southeast US during the Texas blackout, satellite image
Southeast U.S. Satellite Imagery (Source: NOAA GOES-16 Satellite)

The electrical blackout that precipitated the crisis left many government officials, state agencies and industry participants casting blame variously at renewable (wind, solar) or thermal (coal, natural gas, and nuclear) energy sources as the root causes of this disaster.

It turns out that each energy source played a unique role in the crisis – and while the unfolding drama led to charged emotions on the issue, we felt compelled to add a more data-driven interpretation to the discussion.

The electrical systems that power Texas are a complex and interconnected collection of generation, transmission and distribution elements overseen by ERCOT (The Electric Reliability Council of Texas), an independent system operator in charge of dispatching power to majority of the state. They operate as a non-profit composed of system stakeholders as members, and are overseen by the Public Utility Commission of Texas and Texas State Legislature.

The State of Texas (and the ERCOT system in particular) is notable for its diverse mix of generation sources and the deregulated nature of the wholesale electricity market. Below you can see many these sources and transmission lines denoted (with yellow indicators showing continued disruptions as of this writing).

Texas Electricity Generation & Transmission
Texas Electricity Generation & Transmission (Source: EIA, yellow denotes disruption)

Texas generates more electricity than any other U.S. state by a factor of more than 2, with Florida the closest runner-up. This unique position as the top producer is driven by a wealth of natural resources including over 25% of the country’s marketed natural gas production and 28% of the country’s wind-generated electricity.

As of October 2020, Texas produced electricity primarily from four key sources:

 Texas Electricity Generation by type of Source, October 2020
Texas Generation by Source, October 2020 (Source: EIA Texas Grid Data)

Texas’ October 2020 electricity by source breaks down as follows, in descending order of magnitude:

  1. Natural Gas-Fired Generation: 19.8 GWh, (52%)
  2. Nonhydroelectric Renewables: 8.6 GWh (23%)
  3. Coal-fired Generation: 6.6 GWh (17%)
  4. Nuclear Generation: 3.1 GWh (8%)

Natural gas carries an outsized load in Texas and functions as the swing producer to balance supply and demand. Relative to the rest of the country, on an annual basis the ERCOT generation mix is heavier on Natural Gas (48.7% vs. 38%) and Renewables (20.6% vs. 17.5%), and lighter on Coal (20.1% vs. 23%) and Nuclear (9.4% vs. 20%). Sources of electricity generation for the entire U.S. are detailed below.

Sources of U.S. Electricity, 2019
Sources of U.S. Electricity, 2019 (Source: EIA)

Natural gas use for electricity has grown significantly since the advent of widespread unconventional oil and gas development in the U.S. that began in the early 2000s. The EIA time series data below shows the progression of this growth over the last 7 decades.

U.S. Electricity Generation over Time
U.S. Electricity Generation by Source over Time (Source: EIA)

To get a better idea about the demand ERCOT needed to satisfy Sunday night as the cold weather invaded Texas, it’s worth investigating the historic nature of this spike in electricity demand over a longer time horizon. The below graph shows the ERCOT North-Central area electricity demand over a 20-month time horizon:

ERCOT North Central Zone electricity demand
Electricity Demand, ERCOT North Central Zone (Source: EIA)

The level of demand on the ERCOT system during this time period cannot be understated. Investigating the system-wide profile over a 7-day period leading up to the blackout, we begin to see the breakdown in the grid after demand peaked at > 69.2 GW, a new wintertime record for the ISO. Around this same time, local grid operators like Centerpoint began experiencing difficulty maintaining the proper line frequency and loading due to high residential heating use, putting generator assets at risk for more severe damage.

ERCOT overview during Texas blackout

Although ERCOT data is opaque and breaks generation down only by Renewable and Thermal categories, an investigation of trailing EIA data reveals an interesting sequence of events and observations:

  1. First, a weather-related decline in renewable generation (primarily wind) beginning February 8th and lasting over the course of 7 days leading up to the outage
  2. Concurrently, a corresponding increase in natural gas generation as a response to the energy shortfall during the same time period
  3. At 1:25 AM on Monday morning, grid instability driven by high load and shortfalls in incremental thermal generation led ERCOT to shed 10.5 GW of demand and force 30 GW of power off the system to maintain integrity, leading to a widespread blackout (Sources: ERCOT Feb 15 Press Release, CenterPoint Alerts)
  4. Trailing cold weather-related failures at Coal and Nuclear plants widened the supply shortfall (Source: NRC Reactor Status Feb 16)

Below we show this phenomenon over several time periods and in different formats to get the proper effect, courtesy of U.S. Energy Information Administration (“EIA”) (Source: EIA Lower 48 Electricity Grid Monitor)

First over a 29 day period:

ERCOT electricity generation during Texas blackout
ERCOT Generation by Source, 29 days (Source: EIA Lower 48 Electricity Grid Monitor)

ERCOT Generation by Source, 29 days (Source: EIA Lower 48 Electricity Grid Monitor)

And now in the 3 day period surrounding the major incident at 2AM on 2/15/2021:

3 days ERCOT generation during Texas blackout
ERCOT Generation by Source, 3 days (Source: EIA Lower 48 Electricity Grid Monitor)

3 days ERCOT generation by type of source during Texas blackout
ERCOT Generation by Source, 3 days (Source: EIA Lower 48 Electricity Grid Monitor)

The data makes it clear that there was a week-long trendof natural gas generation picking up the slack from wind generation (which didn’t perform well in inclement weather); however, there was a major natural gas shortfall and demand shedding event that occurred at around 2AM CST Monday, February 15th, putting millionsin the dark abruptly.

According to the EIA data, the following sources were negatively impacted during the load shedding event over the span of 1 hour:

  • Natural gas from 40.4 GW to 33.0 GW (-7.4 GW, -18.3%)
  • Coal from 11.0 GW to 9.3 GW (-1.7 GW, -15.4%)
  • Wind from 5.2 to 5.1 GW (-0.1 GW, -1.9%)

Nuclear and coal plants would go on to experience further losses as the morning progressed, with the South Texas Nuclear Power Station losing power at two reactors at ~5AM CST contributing another ~1.4 GW and coal generation dropping another ~1.7 GW off the grid through the afternoon on the 15th.

While it is true that renewable sources were contributing less energy than normal to the generation mix at the time of outage, it is important to consider average output for those sources in a given year. For instance, wind energyproduced an average of 9.8 GW in Texas the prior 12 months (22.4% of total) versus 5.2 GW at the time of the outage, and even operating at average output could not have made up the shortfall Texans experienced Monday morning.

The biggest question remaining about the root cause for the crisis stems from the massivethermal generation outage that caused the blackout Monday morning.

Here we posit hypotheses on the root causes that could have contributed to this crisis:

  1. Physical Flow Constraints:
    • Oil and gas field-level shut-ins driven by frozen water in upstream well equipment and natural gas hydrates in midstream pipelines contributed to the significant lack of natural gas flows out of areas of production and into regions where it could be utilized for generation fuel. This hypothesis is supported by data from operators and early field-level intelligence that suggests significant shut-ins created a lack of supply for generators.
    • A spike in residential heating demand (which utilized natural gas) exacerbated shortages, competing for gas with the plant operators as Texans tried to heat their homes.
    • Natural gas generators may not have had the proper weatherization to stay online during the extreme and unprecedented temperatures. This may be compounded by a lack of incentives to encourage capital spending by private entites on upgrades for rare weather events.
  2. Economic Constraints:
    • Natural gas generators, faced with soaring spot prices over the weekend in anticipation of a major shortage, may have been unwilling or unable to meet demand at negative ‘Spark Spreads‘ (defined as the margin between sold gas-fired electricity and unit cost to generate the electricity). After natural gas prices reached a level above the cap on electricity prices, generators with unhedged feed gas demand realized running their plants would be unprofitable and shut down. There is some leading edge evidence to suggest ERCOT filed emergency orders to ensure producers were paid to stay online. More may become known on this point as investigations proceed, although it seems secondary to physical constraints at this time.

It is plausible that both physical and economic dynamics existed concurrently, forming a dangerous confluence that worked in unison to destabilize the grid. Moreover, many oil and gas field operations require electricity to run equipment to produce natural gas – a circular reality that could have made overnight losses more acute and difficult to remedy.

So how do we prevent this outcome in Texas going forward?

Many areas in the U.S. have become increasingly dependent on natural gas as a primary generation source, even with the dramatic growth in renewable energy. This is due in large part to the fuel’s economic and environmental attractiveness relative to coal-fired generation, which has been in decline for a decade. Natural gas functions well as a ‘swing source’ given its relative abundance, widespread transmission infrastructure and low cost.

As the penetration of renewable grid power rises, it will become imperative that we address both physical and economic barriers to natural gas production, distribution AND generation.

On the physical side, this could include duel fuel initiatives, plant weatherization and pipeline protections for gas plants specifically. On the economic side, it is possible the State could backstop feed gas purchases, implement tax credits for improvement of natural gas plant reliability, or invest directly in co-located gas storage, rather than relying on the market to solve time-sensitive supply issues. 

Considering solutions beyond fortifying our natural gas systems, construction of more High Voltage Direct Current (“HVDC”) interconnections between Texas and other grids is critical. ERCOT documented failures of the existing DC ties during this crisis that led Texas to further unnecessary grid isolation. Other market-based solutions include proactive demand-reduction incentives to manage load in times of high system utilization.

Texans must also consider that as wind and solar power grow, it will challenge incremental investment economics for thermal generation (natural gas, coal and nuclear), a paradox which may lead to less spare dispatchable capacity in the near future. The pace of renewables development must be matched by construction of utility-scale storage projects or slowed to prevent grid destabilization if none of the other outlined steps are taken.

The human suffering during this event was certainly tragic and avoidable. The elderly, infirmed and young went without warmth and water. We should expect more from our service providers, especially with respect to regular, accurate and coherent communication on the staus of their power.

Texans must come together to insist upon a reliable electric grid that keeps our most vulnerable populations out of hazardous conditions and has the resilience to meet future demand in all environments.

Andrew Schaper is a professional engineer and principal of Schaper Energy Consulting.  His practice focuses on advisory in oil and gas, sustainable energy and carbon strategies.

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