[Note: Doug Sheridan is the Principle at Energy Point Research in Houston. He’s also one the most prolific and astute energy commenters at LinkedIn. Below is a commentary he posted this morning about issues with the Texas power grid managed by ERCOT. It’s a great read.]
It was big news last week that the Texas PUC received 125 applications for 56 GW of new gas-fired generation. The legislation behind the initiative—which appropriates $5B in state grants and loan guarantees to the plants—was intended to spur 10 GW of new gas-fired capacity.
We've seen commentary about what the supposedly massive “oversubscription” means, with plenty of energy industry insiders hailing it as a rebuttal to the massive buildup of renewables on the state's increasingly shaky grid. We're not so sure.
The subsidized fund for gas-fired generation is far from a solution to the grid’s large and growing problems. More likely it's a political fig-leaf to cover up poor grid management by state leaders—that is, a way to say, “Don't blame us, we tried to fix it” should the system suffer catastrophic failure due to the non-performance of renewables.
The truth is many of the same state politicians who championed this particular law have actually enabled the very situation on the grid they now supposedly decry. We say supposedly because, to be clear, there’s absolutely no *mea culpa* here—from anyone. We don't get those anymore.
We suspect analysis of political contributions from renewable energy interests to Texas politicians would show there’s too much in the way of donations flowing to the political class to expect they’d ever disallow more damaging renewables on the system. Again, we may be wrong on this point, but we doubt it. In time we hope to do the analysis.
Leaders in Austin seem determined to tempt fate in other ways as well. As reported by David Blackmon, Lt. Gov Dan Patrick is now referring to a “Texas Miracle”... presumably of economic growth and prosperity. Careful Sir, there are too many problems lurking on the Texas grid to be claiming miracles at this point.
When it comes to the 125 applications for new gas-fired capacity, many questions remain. Certainly more honest and complete math needs to be done. Our sense is an honest analysis would show that Texas rate- and tax-payers are now effectively financing the kind of inefficient and duplicate backup generation capacity critics of renewables have been warning about for years.
The lack of public understanding of what’s going on as it relates to the Texas grid is also a concern. That’s because it limits the public’s ability to act as a governor in real time on politicians, policy makers and moneyed interests. Unable to punish politicians at the polls in advance of breaking our grid, it leaves only the lesser option of punishing them after the fact.
Our affection for Texas runs deep, but so does our concern over its grid. It’s time for a candid conversation about the state’s energy policies—one that acknowledges the true costs and challenges of a blindly pro-renewables approach and seeks solutions that ensure the resilience of the grid and the well-being of Texans.
[End]
That is all.
I wouldn't characterize the issues with the Texas grid as being driven by mismanagement of the grid, but more driven by market design. ERCOT is more or less an energy only market with no market for capacity and only lip service to ancillary services. If capacity would be offered and sold separately from energy, there would be no need for the State of Texas to offer financial incentives to spur development of reliable natural gas generation. Those buying energy from wind and solar would get just that, MWh's delivered when and if the wind blows and/or the sun shines. Try running a data center on that.
Sheridan didn’t like the low interest loan bill from the outset warning it was only low interest loans not a solution. The full solution to meet tge demand capacity of the Texas Grid is to implement nukes (a longer than shorter term to generation date) and natural gas and coal generation - at the expense of the install base of solar and wind. The cost of electricity in Texas has risen dramatically with the addition of solar and wind and batteries. We can’t just add to the generation limitations with more intermittent and reliability issues from solar and wind - I don’t care how many batteries you say can be installed to counter the intermittency - it’s not the most economic for the end user. If solar and wind are so inexpensive as advertised then let the end user address the intermittent issue at their consumption site. Suddenly the cost and affordability leave the discussion for the emotional arguments against hydrocarbons. So much for sound economic evaluation and management.
Improvement in the management of the Texas Grid will likely take removal of several currently elected politicians. Every election counts - vote wisely.