AUSTIN — For about five hours on Feb. 25, there was no power for much of Texas.
Wind and solar generated electricity at an unprecedented rate as the sun shone on a banner day of perfectly sunny, mild and breezy weather across the state.
At its peak, renewable energy produced nearly three-quarters of Texas’ electricity that day — a record that pushed the real-time price of power to $0 for five hours as nuclear and fossil fuel plants bid lower and lower prices to stay competitive. rather than making the more expensive decision to close their operations.
It was a record based in part on four years of construction that has seen solar capacity increase eightfold over the past five years.
Political Points
Late last year, Texas overtook California to become the No. 1 state for solar energy, marking the second renewable energy boom in Texas since the recent boom in wind power. More than anywhere else in the country, Texas has used renewable energy over the past decade.
“It’s an exciting time,” said Judd Messer, vice president of renewable energy group Advanced Power Alliance. “It looks like we’ll be breaking solar records a few times a month from now on.”
Advocates hope that solar can provide daytime renewable energy that complements wind power’s tendency to produce more actively after sunset. But it is not without obstacles.
Solar power is currently the fastest-growing energy sector in Texas, and while it rivals wind for its share of power generation, critics say renewable energy can make the grid less reliable because it can be limited by cloudy days and calm winds.
Others include the hidden costs of solar energy that outweigh the benefits of a clean energy source.
While solar power — like wind — has the inherent advantage of zero-cost fuel compared to its non-renewable counterparts like coal or natural gas, consumers have seen little in the way of energy cost savings.
“Renewables can serve to lower the cost of electricity,” said Joshua Rhodes, a researcher with the Webber Energy Group at the University of Texas at Austin. “I’ve done research that shows that and shows the effects of renewable energy and how much money they save.”
But Rhodes said the amount of money spent on electricity has increased even with the rise of low-cost renewable energy.
“In the last couple of years, we’ve seen more income in the market,” he said
Record production
Solar has set new electricity production records five times this year. This pace is not unheard of in the growing energy sector.
According to market-tracking website GridStatus.io, the current record was set on February 19, when solar generated 17,200 megawatts of power, a 50% increase in a year. In four years, under ideal conditions, solar energy production has increased from enough electricity to power half a million homes to enough electricity to power 3.4 million homes.
Wind power still dominates solar power on the ERCOT grid, but its growth has slowed in recent years. According to ERCOT, which oversees most of Texas’ electric grid, solar has seen huge year-over-year increases over the past decade, rising from about 1% of renewable energy in 2013 to about 36% in 2023.
More than 150,000 megawatts of solar projects are in the planning stages across the ERCOT grid. That’s four times more than wind power projects and about 10 times more than natural gas projects in the early stages of development.
The only sector approaching this level of growth is battery storage, which is poised for big growth in Texas. According to Ben Gaffney, vice president of the Electric Companies Association of Texas, a trade group, solar is playing a role in the industry’s rise, as some developers have integrated battery storage into new and existing solar arrays.
“Twenty years is a very short time in the electrical world, and that’s a really impressive amount of change,” Gaffeney said.
Solar power and batteries are also supported by federal incentives under the Inflation Reduction Act, as well as large reductions in the cost of the materials that make up solar arrays.
But Texas is trying to level the playing field.
Market tilt towards natural gas
The 2021 winter freeze that caused blackouts in Texas and killed more than 200 people prompted changes in key regulatory policies.
While problems with all energy sources play a role in power outages, ERCOT, the Public Utilities Commission and the Texas Legislature have taken measures to make natural gas plants in Texas more cost-effective to operate in the name of increasing grid resiliency.
Together, they have provided billions of taxpayer dollars and are revamping the state’s energy market to encourage the construction of more gas-fired power plants.
The legislation took the most direct approach by creating the Texas Energy Fund, a $5 billion taxpayer money dedicated mostly to low-interest loans and cash compensation for companies that quickly add new natural gas power plants to the system. Voters approved the fund in November.
The Public Utilities Commission is ironing out details of the loan program and could be approved Thursday.
According to Rhodes, if Texas is to turn away from a future in which renewables and batteries become the main source of electricity, then regulators and ERCOT will have to create conditions that allow fossil fuel plants to make a profit.
Lt. Gov. Dan Patrick and investment giant BlackRock rolled out the red carpet for natural gas power producers at a daylong summit in Houston earlier this year to launch the Texas Energy Fund. Attendees who spoke to The News described a warm welcome, and at the Public Utilities Commission’s Feb. 15 meeting, Commissioner Jimmy Glotfelti said interest in the fund seemed high.
Glotfelty advised natural gas power producers to put their “best foot forward” when applying to participate in the fund.
“Everything I’ve heard about the energy fund is that we’re going to have absolutely too many subscribers,” he said.
In response to the proliferation of renewable energy, ERCOT last year introduced the ERCOT Emergency Backup Service – or ECRS – which is designed to encourage “dispatchable” energy sources to start generating electricity when energy supplies are depleted.
The dispatcher generally applies to natural gas plants because they can start generating power when they are running.
A few months after ECRS was introduced, the state’s independent market monitor released a scathing report estimating that the utility cost consumers $8 billion by creating an image of energy scarcity. This number has increased to 12 billion dollars.
The Public Utilities Commission is also overhauling the ERCOT market. In late 2022, the regulatory board approved a plan to create a separate energy market that would allow power producers to bid for performance credits under the promise that they will be supplied with electricity if demand increases.
Although regulators say they are “agnostic” about what types of power plants might be involved, the design favors natural gas-fired units. State lawmakers capped the market at $1 billion during last year’s legislative session amid doubts about its effectiveness.
“These types of off-market activities just add cost after cost,” said Doug Lewin, an energy expert who publishes the influential Texas Energy Power Newsletter. “These advantages do not reach consumers. On the contrary, invoices are actually rising.”
Obstacles weaken the future of the sun
Although solar power has gained significant capacity in recent years, its growth may be limited by the grid’s ability to transport solar-generated electricity to homes and businesses.
The power grid saw a bottleneck in September on transmission lines from the Rio Grande Valley to San Antonio, power generated in South Texas.
This prompted ERCOT to declare a state of emergency and is the closest the grid has been to rotating lights since the 2021 winter storm.
Messer, head of Texas defense at the Advanced Power Alliance, said new transmission lines being built in the Permian Basin, where much of the renewable energy is located, will be close to capacity as soon as they are finished. Without the ability to move electrons from sun-warmed West Texas to population centers hundreds of miles away, investing in solar energy becomes less attractive.
“If you build more cars but don’t build more roads, people can’t move,” Messer said. “I think if we don’t do something to upgrade our existing transmission lines or build new ones, unfortunately that could happen.”
Critics also focus on the indirect costs of solar power.
Brent Bennett at the Texas Public Policy Foundation, a conservative think tank, pointed to the $892 million ERCOT project to build power inverters that address how renewable energy can destabilize the grid.
“This is another challenge that becomes exponentially more difficult when you have more wind and solar in the system,” said Bennett, the foundation’s director of energy policy.
The industry could also face legislation designed to slow or stop its growth in Texas.
Among the high-profile proposals during last year’s legislative session were bills that would subject renewable energy projects to onerous zoning requirements, costly environmental studies and tough investment restrictions that would have sharply limited plans for new wind and solar projects if they could be implemented today. .
Several of these proposals passed the Senate but died in the House.
“If the other side’s response makes already cheap energy more expensive … I think the only people who are going to suffer there are Texas consumers,” Messer said.