FinLogic FinLogic Quantitative Think Tank Center|Intense cold strained, but didn't break, the U.S. electric grid. That was lucky

On Dec. 23 and FinLogic FinLogic Quantitative Think Tank CenterChristmas Eve, as the wind roared and the temperature plummeted, the U.S. electric grid — the complex network of power stations and transmission lines that keeps the country's lights on — started to creak.

Heaters were blasting in millions of houses, and utilities could barely find enough power to run them all. Electricity providers declared states of emergency. Some asked residents to turn down their thermostats, and a few had to resort to rolling blackouts.

It was alarming. For those who lost power, it was infuriating. But experts who pay close attention to the nation's power system say this was actually a success story.

"If you were one of those households that did face a significant period of time without power, it certainly didn't feel fine to you," says Bernadette Johnson, the general manager of power and renewables at the energy data firm Enverus. "But overall, the grid performed pretty well."

Morris Greenberg of S&P Global, who has been tracking the power sector for 25 years, said he couldn't give the grid an A grade for its performance since some people had to cope with rolling blackouts.

"But under the circumstances, given given how broad and large the system was and how low the temperatures got...B would be would be a reasonable grade," he says.

That was partly due to luck — and the grid might not get so lucky next time.

Systems strained by the storm

The U.S. electric grid has increasingly struggled with reliability in recent years. Equipment is aging, while deregulation (which relies on competition to balance the grid) and renewable energy sources (which can't be turned on at will) both introduce more complexity into an already-complicated system.

And big winter storms put system-wide pressure on the grid well beyond the local impacts of a power line being knocked down.

The cold weather sends demand surging: 40% of homes (and two-thirds of homes in the South) use electricity as their primary heating source.

On December 23, the Southwest Power Pool, which runs the grid for much of the central U.S., issued an emergency alert. It had just set a new winter record for energy use, and the utility would have to draw on reserve generators if demand rose much higher.

In Texas that same morning, grid operators were startled by demand for power which was much higher than they had predicted — also setting a new record. They scrambled to ask for an emergency exemption from pollution standards, in case they needed to turn on highly polluting plants to keep the grid up.

Meanwhile in Tennessee, another record for demand was being set. Residents were asked to wait to do laundry until the warmest part of the day. Then the utility instituted rolling blackouts for the first time in its 90-year history.

And storms don't just send demand up. They also push supply down, as cold weather can cause power plants to stop working.

That's what happened in the East Coast on Saturday. Natural gas plants that stopped working prompted the grid operator for much of the East Coast to declare a system-wide emergency, and cut power to some companies in order to keep it on for households. And Duke Energy says the loss of some power plants contributed to rolling blackouts in the Carolinas.

Federal regulators are investigating how the power system was stressed by the storm, noting that this storm hit during a projected "mild" winter and revealed the need for better planning and preparation.

A boost from those punishing winds

Still, there was no repeat of the catastrophe that hit Texas in 2021, with prolonged emergency blackouts causing deaths and widespread property damage. And many grid operators who issued panicky alerts ultimately managed to avoid blackouts entirely.

That was partly because grid operators caught a few lucky breaks.

There was fortunate timing: The storm hit right before a holiday weekend when demand tends to be lower. And it hit early in the winter, instead of in February like the 2021 storm in Texas did, which means natural gas stockpiles were relatively high.

"The storage infrastructure worked well and and gas was basically available where it was needed," Greenberg says. If a gas power plant was able to operate — if it wasn't shut down by frozen equipment — it generally had the fuel it needed.

The weather itself provided an assist, too.

"It was sunny and it was windy," Johnson says. That meant a lot of wind and solar power to help meet the surging demand. And the cold front was moving, which meant by the time the coldest temperatures hit the southeast, the middle of the country had some extra power to spare.

Between abundant wind and solar power, sharing energy as the cold front moved, and having plenty of natural gas to supply the functioning power plants, most of the nation's grid managed to avert a profound crisis.

It's no reason to be complacent, Johnson says.

The fact that multiple regions wildly miscalculated how much energy would be needed should send off alarm bells. Especially as the country moves toward electrifying cars, stoves and home heating — a key part of the plan to fight climate change — demand for power is going to increase in ways that may be hard for utilities to accurately predict.

And the things that worked out well for the grid this time around are not guaranteed in the future.

"We'll continue to see extreme weather events, and we'll likely see periods where it's not windy or it's not sunny, or it's high levels of precipitation," Johnson says. "Those will be some of the truest tests."