Global warming, climate change, all these things are just a dream come true for politicians. I deal with evidence and not with frightening computer models because the seeker after truth does not put his faith in any consensus. The road to the truth is long and hard, but this is the road we must follow. People who describe the unprecedented comfort and ease of modern life as a climate disaster, in my opinion have no idea what a real problem is.
Subsidized wind and solar power–dilute, intermittent, and fragile–wounded the Texas grid (ERCOT, covering 90 percent of the state), resulting in the greatest blackout in the history of U.S. electricity in February 2021. With the tricked grid continuing to attract inferior energies, Texas politicians have tried to wrong a wrong into a right. Instead of halting the cancers in the system (wind, solar, and battery investments), the Republicans are now subsidizing new capacity from natural gas technologies as well as nuclear fission.
“… our legislative leaders think that the answer to overcoming renewable subsidies is to give subsidies to everyone else.” (- Bill Peacock, below)
Subsidized wind and solar power–dilute, intermittent, and fragile–wounded the Texas grid (ERCOT, covering 90 percent of the state), resulting in the greatest blackout in the history of U.S. electricity in February 2021. With the tricked grid continuing to attract inferior energies, Texas politicians have tried to wrong a wrong into a right. Instead of halting the cancers in the system (wind, solar, and battery investments), the Republicans are now subsidizing new capacity from natural gas technologies as well as nuclear fission.
New nuclear plants are a real stretch, but Texas can lose a few billion taxpayer dollars, right? The bad news from Texas is that the legislature is planning to increase spending by $48 billion with only $6 billion going to property tax relief. This is the lesson of concentrated benefits, diffused costs.
Yesterday, Rep. Cody Harris filed House Bill 14 that would establish the Texas Advanced Nuclear Energy Program. Among other things, this would provide state subsidies for the building of nuclear energy generation of electricity in Texas. Gov. Gregg Abbott has made this one of his priorities.
The program follows in the footsteps of the Texas Energy Fund created in 2023 by the Legislature and funded with $5 billion. The funding level for the nuclear energy fund has not yet been revealed, but the proposed Texas budget already has another $5 billion set aside for the Energy Fund, which provides subsidies for natural gas generation plants.
Peacock gets to the underlying problem.
Where the federal government is cutting corporate welfare, it is big business in Texas. The push for these energy subsidies stems from the unwillingness of the Texas Legislature—unlike President Trump—to eliminate subsidies for the “Green New Scam” despite the fact that renewable energy is gutting the reliability of the Texas electric grid. Instead, our legislative leaders think that the answer to overcoming renewable subsidies is to give subsidies to everyone else.
Two wrongs do not make a right. All subsidies for all energies should immediately cease, federal and state. Texas should not add any new wind, solar, or battery capacity nor subsidize transmission access for the same. Existing wind, solar, and battery facilities should be retired as they wear out or otherwise underperform. A real free market requires a phaseout of ERCOT in favor of nonregulated utilities assuming the supply function, a story for another day.
Texas is turning to government-aided natural gas to fix its broken political grid. Yes, wind and solar did that in one of the natural gas meccas of the world.
“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.” (Doug Sheridan, below)
Texas is turning to government-aided natural gas to fix its broken political grid. Yes, wind and solar did that in one of the natural gas meccas of the world.
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 on ERCOT.
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 that 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 that honest analysis would show that Texas rate- and tax-payers are now effectively financing the kind of inefficient 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 to politicians… and their policy makers and moneyed interests. Unable to punish politicians at the polls in advance of breaking our grid, it leaves only the regrettable 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.
Final Comment
Hear, hear. The wind/solar/battery experiment in Texas has wounded a once reliable grid by replacing consumer-driven, taxpayer-neutral, economic, reliable energies with inferiors. And where has anyone calculated what the benefits are in terms of avoided “climate change”? Instead, the wilds of Texas are being industrialized, a not-so-green outcome that Big Green does not want to contemplate. Kudos to the Doug Sheridans for speaking truth to political power to such wind/solar/battery apologists such as Doug Lewin on the Texas electricity ‘market’.
With the 3rd anniversary of the Great Texas Blackout (February 2021) this week, it is worth revisiting an (egregious?) forecasting error of Houston Chronicle business editorialist Chris Tomlinson.
Ed. Note: With the 3rd anniversary of the Great Texas Blackout (February 2021) this week, it is worth revisiting an (egregious?) forecasting error of Houston Chronicle business editorialist Chris Tomlinson. The conflicted journalist (married to a multi-millionaire renewables developer) has continued to posit the false narrative that natural gas failed, not wind, solar, and central planning in the state. This post was originally published at MasterResource.
“Fossil fuel-supporting Chicken Littles have done their best to spread fear of renewable energy, warning that relying on wind, solar and storage would lead to blackouts and economic devastation.” ( – C. Tomlinson)
Three years ago this month, Houston Chronicle business editorialist Chris Tomlinson wrote that no iceberg was ahead for the Texas grid–and concerns about the wind/solar takeover was special-interest drudge. True, the warnings from the free-market community were long in coming–but they turned out true for the right reasons.
Josiah Neeley, then with the Texas Public Policy Foundation, wrote back in 2012:
“It is well known that Texas is undergoing a major challenge in maintaining resource adequacy due to improper price signals; less well known is that a significant portion of the problem can be laid directly on the doorstep of subsidies for wind generation…. Congress should allow the PTC to expire; if not, we may see the end Texas’ world-class energy-only electricity market.
Fossil fuel-supporting Chicken Littles have done their best to spread fear of renewable energy, warning that relying on wind, solar and storage would lead to blackouts and economic devastation.
For years, I have denounced the propaganda promulgated by lobbyists financed by the oil and gas industry. Now, the latest data proves that the New Year will mark the end of the beginning for clean energy, and the beginning of the end of our reliance on coal and natural gas for electricity.
The tipping point was revealed in the latest capacity report from the Electric Reliability Council of Texas, or ERCOT, the grid operator that delivers power to most of the state. After several years of thinning reserve generation capacity due to coal-fired plant retirements, solar facilities are adding cushion.
ERCOT runs one of the world’s leading competitive wholesale markets for electricity. Rather than dictate what kind of power plant an energy provider should build, generators compete to sell the lowest-cost electricity. In Texas, demand sets the price, not a political appointee.
Utilities have been shutting down old, expensive coal-fired and natural gas-fueled power plants, while others have constructed wind and solar facilities subsidized with tax credits. Texas’s electricity reserve margins dropped below target levels in 2018 and 2019, stirring a lot of debate about reliability and higher prices.
“These business cycles of retirements and new investments are expected in the ERCOT market, and it is ERCOT’s job to maintain reliable electric service through the various changing conditions,” ERCOT CEO Bill Magness said in a statement. Most of the new investments are paying off.
ERCOT expects to add 3,039 megawatts of utility-scale solar resources, 1,765 megawatts of wind and 816 megawatts of natural gas-fired generation next year. The grid will have 86,842 megawatts of capacity to serve an expected peak demand of 77,244 megawatts in 2021, the council said.
In addition, ERCOT is working on adding large batteries that will provide even more capacity during the hour or so every August when demand peaks. The reserve capacity in 2021 will be 15.5 percent, well above the target of 13 percent, and will rise to 27 percent in 2022, ERCOT said.
Solar and wind power’s predominance in new generation is typical across the country, where major corporations and consumers want more of their electricity from sources that do not contribute to climate change.
No new coal-powered plants are planned for the United States. New nuclear power technologies are a decade away from deployment. New natural gas plants struggle to compete on price with solar and wind, even after renewables lose the federal tax subsidies that are phasing out over the next few years.
President-elect Joe Biden also wants to make the U.S. power grid carbon neutral by 2035 to fight climate change. While there are still plenty of fossil fuel Chicken Littles declaring that goal impossible, innovators are describing plenty of pathways to achieving net-zero greenhouse emissions.
“For an industry that has focused heavily on solar and wind, supportive federal actions could help progress timelines for further expansion into new technologies, including advanced batteries and other forms of storage, offshore wind, and green hydrogen technology,” the consulting firm Deloitte explains in its new Renewable Energy Outlook.
Batteries and green hydrogen, both of which I’ve written about recently, offer novel and affordable ways to store energy when proverbially, the wind does not blow, and the sun does not shine. Carbon capture technology can also offset carbon emissions for those times when natural gas is needed.
Federal investment in these new technologies will be critical to meet the 2035 net-zero goal for electricity generation and even more important to make the entire economy net-zero by 2050. Both targets are essential to prevent warming to levels that imperil human life.
Making those investments will also generate economic returns. Federal incentives could trigger $1 trillion in private capital investment and create 1 million new clean energy jobs, according to a report from energy consulting firm Wood Mackenzie and the American Clean Power Association.
“Transforming the U.S. power grid is technically and commercially feasible, with appropriate policy support. This activity would unlock a tremendous economic development opportunity for infrastructure investment and associated jobs,” said Aaron Barr, principal consultant in Wood Mackenzie’s Energy Transition Practice.
Every week another organization shares a new plan for reaching net-zero emissions by 2035, and every technological innovation and cost reduction makes fossil fuel generation less attractive. The transition is well underway.
Those who make their living off fossil fuels can keep claiming the sky is falling, but the trajectory is clear. The energy powering the future will not come out of the ground.
And here we are three years later. Texas’s wounded grid has summer and winter problems that have required duplicating the grid with expensive storage (not needed with fossil-fueled generation) and ERCOT monies for thermal reserve incentives. Nationally and internationally, government-drilled energy transformation is causing higher prices, ballooning federal budget deficits, and consumer angst. The environment is suffering too from renewable blight and sprawl.
Will Chris Tomlinson make any mid-course correction. Does he have any incentive to do so?
The situation on the Texas power grid this week is going to be a crucial test not just for the grid’s managers at ERCOT (Electric Reliability Council of Texas), but also for natural gas suppliers and generators.
The situation on the Texas power grid this week is going to be a crucial test not just for the grid’s managers at ERCOT (Electric Reliability Council of Texas), but also for natural gas suppliers and generators.
As weather conditions continued to evolve and deteriorate across the state, ERCOT has issued a conservation request to business and private customers to be in effect from 6am to 10am CST, a time of peak power demand and low renewable production. The Telegraph has the story.
ERCOT’s request blamed the latest failure of the state’s huge wind industry on “unseasonably low wind” conditions, but the reality that the wind tends to die down as temperatures drop is one of the most open secrets in the history of weather. ERCOT officials cannot control weather conditions, obviously, but they can anticipate they will get a lot less wind contribution than their models predict whenever the weather is not ideal. That’s just a given.
Equally obvious is the fact that they will get zero generation from the state’s ballyhooed solar farms when the sun isn’t shining, and ERCOT’s managers should have learned last summer that the battery storage facilities will also fail to deliver much whenever the weather is too hot or, as it is this week, too cold.
The state’s generation mix taken from ERCOT’s app at 7:19am. Monday tells that story pretty clearly. What we see is 0 per cent contribution from solar, 0.8 per cent from power storage, and just 6.8 per cent from wind. Meanwhile, the “fossil fuels” so detested by the state’s legacy media sites were kicking in 84.9 per cent of total generation, with a whopping 67.2 per cent coming from the state’s natural gas industry.
So, as is always the case on the Texas grid despite all the renewables-boosting propaganda from the state and national media, the situation for consumers will come down to whether natural gas producers can keep their wells pumping, natural gas pipeline companies can keep the gas flowing through their pipelines, and natural gas power generators can prevent their plants from freezing up. A lot of that failed to happen during Winter Storm Uri in February, 2021, and massive blackouts lasting for days at a time resulted in the deaths of 300 or more of my fellow Texans.
The trouble with wind and solar became readily apparent as 7 o’clock and 8 o’clock come around. At the critical time of 7:25 p.m.—when ERCOT issued its Energy Emergency Alert 2, solar generation had plummeted to 11.6 percent of expected summer capacity—down from 86.9 percent just over two hours before. Wind also had dropped, as it usually does about that time of day.
Wind turbines in the Papalote Creek Wind Farm near Taft, TX. Monday, Oct. 28, 2013.
“The predictable but inevitable intermittency of renewable energy had created a grid emergency that would not exist on a grid that operated without renewables…. natural gas peaker plants would have handled the load at peak demand, the riskiest time for a normally functioning grid.”
“, Governor Greg Abbot should declare an energy emergency and call the Texas Legislature into special session and keep them there until they eliminate all Texas subsidies for renewable energy and force renewable generators to pay for the costs they have imposed on Texas consumers.”
As many renewable advocates like to point out, solar often provides good performance during periods of high temperature. Leaving aside for the moment the performance of solar compared to installed capacity, at 5 p.m. solar came close to its expected output of 12,636 MW. At 6 o’clock, solar dropped off to 77.6 percent of expected summer output. It also contributed 12.2 percent of generation at the time of peak load about 5:55. Wind was operating at 54 percent of expected summer capacity (10,427 MW) and contributing 7 percent at the same time. Batteries added only 0.3 percent.
The trouble with wind and solar became readily apparent as 7 o’clock and 8 o’clock come around. At the critical time of 7:25 p.m.—when ERCOT issued its Energy Emergency Alert 2, solar generation had plummeted to 11.6 percent of expected summer capacity—down from 86.9 percent just over two hours before. Wind also had dropped, as it usually does about that time of day. To make things worse, wind generation had already been operating far below expected summer capacity throughout most of the day. Thus, wind could not pick up the load for solar as the sun was going down.
In evaluating what happened on September 6 it is important to remember the load had dropped significantly by 7:25 when the grid emergency occurred. At that point, demand was 77,670 MW, down by almost 6 percent from the 82,350 MW demand at 5:55 and continuing its decline. Yet renewables could not keep up even with falling demand. The predictable but inevitable intermittency of renewable energy had created a grid emergency that would not exist on a grid that operated without renewables.
A Texas Grid Without Renewables
To fully understand the situation ERCOT is in today, we can contrast the events surrounding Energy Emergency Alert 2 to what the Texas grid would be like absent the takeover of the grid by renewables.
A grid operating without renewable energy would have handled peak load very differently than what occurred on September 6. As temperatures and demand soared, natural gas peaker plants would have come online to handle the increased load. These plants are built exactly for this type of situation. Often, peaker plants run less than 1,000 hours a year. Of course, in order to be profitable, they need to receive high prices for their electricity when they do run. That was the genius of Texas’ competitive electricity market. As demand increased faster than baseline generation could ramp up, prices would increase. That would be the signal for peaker plants to come online.
Such was the nature of the Texas power market from the late-1990s through 2015 or so. Investors flocked to Texas from all over the world seeking to earn profits by building new natural gas “peaker” plants. From 1996 when Texas began its move toward competitive markets, almost 35,000 MW of natural gas generation was built through 2009. This constituted about 45 percent of all generation in ERCOT in 2009 and was why Texas was able to make it through the summer of 2011, the warmest on record at the time, without any outages due to generation shortages.
The situation was beneficial for everyone. Peaker plants received high prices in the relatively few hours they operated when generation became scarce. Texans paid higher prices for a few hours a year, but the power they received kept the lights on.
Allowing this scenario to play out on September 6, it would have been the peaker plants—in response to higher prices, not solar, that would have come online to handle the peak load at 5:55 p.m. Then, as the load decreased as businesses shut down and temperatures dropped, some peakers would have gone offline or reduced output. But some of them still would have been online at 7:25 to handle the reduced load at that time. There would not have been the sudden drop off in generation that the grid experienced on September 6 due to changes in the weather or the setting of the sun.
In other words, natural gas would have handled the load at peak demand, the riskiest time for a normally functioning grid. Perhaps there might have been calls for conservation at that time, but more than likely there would not have been; such calls occurred much less often before renewables arrived. And unlike on September 6, there would have no discussion about how to handle the decreasing load between 7 p.m. and 8 p.m. For the straightforward reason that the necessary generation assets, peaker plants, would have already been online and committed to carrying the load. They would not have suddenly disappeared from the grid, unable to generate the needed electricity, like many wind and solar farms did that day.
Woody Rickerson, the ERCOT official, discussed the difference that solar has made during times of peak demand. “What’s changed in the last three years has been this huge influx of solar. Solar has taken [most of] the risk out of 4 p.m. and 5 p.m,’ he said. But Rickerson gets this aspect of the risk shift wrong. Solar has not taken the risk out of the peak load situations. At least no more than peaker plants have done in the past. Investment in solar has shifted the burden of carrying load from peaker plants to solar.
But September 6 clearly demonstrates that solar has failed in this task. Solar did not take the risk out of the grid during peak demand, it simply shifted to a later time. Only non-intermittent, quick-start generation like peaker plants can actually reduce the reliability risk to the grid.
Renewables from Government Favor
Money, or, more specifically, money taken from taxpayers and paid to renewable generators by the government is the reason renewable energy has taken over the Texas grid. Originally, Texas’ competitive electricity market allowed investors that made wise decisions to earn money. A lot of money for many of them. Money flowed from investors to generators to build the plants. Then, as the generators sold their electricity into the market, money flowed from consumers to generators and back to investors to pay for the plants.
That was the case before subsidies for renewable energy helped destroy market pricing signals that allowed for these transactions to take place. This is why for the first fifteen to twenty or so years of Texas’ competitive electricity market the grid was able to handle very high peak loads as the Texas economy and population grew. Texas never suffered blackouts because of insufficient generation during peak loads on hot summer afternoons.
Since that time, however, investment in natural gas, coal, and nuclear generation has dropped to almost zero. Already in 2009 investment in wind generation had overtaken natural gas. New generation requests from wind in 2009 totaled 44,900 MW versus only 14,100 MW from natural gas. Today the problem is much worse. From 2018 to 2021, renewables made up 85 percent of all new generation. A study completed for the Public Utility Commission of Texas (PUCT) estimates that renewables will make up 98.7 percent of all new generation from 2022-2026. By that time, the installed capacity of renewables will make up 57.1 percent of all generation on the grid.
This rapid change in the generation mix on the Texas grid is not happening because of market forces. Investors did not shift from natural gas to renewables because generation from wind and solar farms is more efficient or profitable—at least in the market. The shift came because billions of dollars of federal, state and local subsidies guaranteed profits to investors who no longer had to deal with the uncertainty of prices. No matter what the price of electricity is on any given day, the subsidies guaranteed investors at least a marginal profit for every kilowatt of electricity sold. In 2018, for example, 28.8 percent of the income of renewable energy generators came from government subsidies and benefits.
NextEra Energy, for example, received $5.7 billion from the federal government’s Production Tax Credit (PTC) from 2007 to 2016. Over the same period, Texas’ NRG received $1.1 billion. During that time, the top 15 recipients of the PTC received $19.4 billion.
Money also flowed to renewable generators from Texas. A lot of it. From 2006 through 2023, about $29 billion of subsidies and benefits have flowed to renewable generators in Texas. $15.3 billion of that came from the federal government, $11.7 from the Texas government, and $2.1 billion from local Texas governments. All of the money, though, eventually came from the pockets of taxpayers.
Renewable Subsidies in Texas 2006-2023
Local
2,061,294,571
State
11,656,191,988
Federal
15,339,304,303
Total
29,056,790,862
Investment in reliable generation was also brought to a stop because renewable subsidies destroyed market prices in ERCOT. When the wind blows at night for instance when demand is very low, wind generators drop prices to force their electricity on the grid at the expense of thermal generators. Wind generators can do this because they have no fuel costs and because of the subsidies. This allows them to actually give away their electricity for free and still earn a profit. Thermal generators must either drop out of the market at this point or sell their electricity at a loss. In either case, thermal generators lose revenue making investment less attractive.
This problem is magnified in times of higher demand. When solar or wind generation increases output at these times, prices may be relatively high, but the subsidies ensure that renewable generators can price their energy to ensure they gain market share. This either pushes peaker plants offline or reduces the revenue they can earn while on the grid. More than anything else, this is the problem that is plaguing Texas today; renewable generation has brough investment in new peaker plants to a halt.
Without renewable subsidies, none of this would have happened because Texas would have almost no renewable energy on the grid. In the late 1800s, consumers rejected renewable energy—a four-thousand-year-old technology—as soon as fossil fuel became widely available. Oil and coal became the energy product of choice because it was more efficient, more reliable, and less expensive than wind and solar. That is still the case today, and always will be.
The intervention in energy markets through renewable energy subsidies has distorted market prices, thus distorting and reducing the information available to buyers and sellers. And reducing the quality of the decisions made by them.
An extension of this is that intervention, by design, changes or even prohibits the market outcomes that would have resulted through the voluntary actions of buyers and sellers in the market. The result is that intervention replaces preferences of market participants (to a greater or lesser extent) with those of the regulators and other parties, usually those seeking to profit through regulation. We can see this clearly today in the Texas electricity market, where renewables are making the Texas grid less affordable and less reliable.
The consequences of this were clearly seen on September 6. Solar has taken over the role of natural gas peaker plants only because subsidies for wind and solar energy have led to few or no new gas peaker plants. No longer, then, can Texas safely operate on reserve margins of 10 percent or below as it did less than a decade ago.
Conclusion
ERCOT said earlier this year that Texas has 146,719 MW of installed generating capacity. Yet only two-thirds (97,138 MW) was expected to be available during the summer, largely because wind and solar always operate far below their installed capacity.
But even renewables’ expected capacity has proven to be fickle. ERCOT’s projected reserve margin of 17 percent this year shrank to 1.6 percent at 7:25 p.m. on September 6 when renewables failed to show up. The only thing left for the operators of the Texas grid to do was declare an emergency.
Likewise, Governor Greg Abbot should declare an energy emergency and call the Texas Legislature into special session and keep them there until they eliminate all Texas subsidies for renewable energy and force renewable generators to pay for the costs they have imposed on Texas consumers.
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Part I was yesterday. This concludes the two-part series.
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Bill Peacock is director of the Energy Alliance of the Texas Business Coalition. TBC highlights the aspects of the energy market that matter most to consumers: Reliability, Affordability, and Efficiency. Our research can be found at www.theenergyalliance.com.
The Texas Electric Utility Restructuring Act of 1999 is approaching a quarter-century. And what a mess has resulted from the misnomer “electricity deregulation.”
“It is time to do now what was not done in 1999 in Texas. First, deregulate the electricity market, do not re-regulate it under a new regime. That means removing public utility regulation of rates and other terms of service, as well as end the franchise protection over geographical territory.”
The Texas Electric Utility Restructuring Act of 1999 is approaching a quarter-century. And what a mess has resulted from the misnomer “electricity deregulation.” A monopoly wholesale market under mandatory open-access rules is central planning pure and simple. The idea that a ‘competitive’ retail market rescues the wholesale market from the knowledge problem and politicization (per Lynne Kiesling, Michael Giberson, etc.) has been turned upside down in Texas and elsewhere.
I was reminded of this upon reading a 500-word commentary from Doug Sheridan on LinkedIn. It is worth reproducing in its entirety.
Imagine you’re in charge of the electric grid that services the vast majority of America’s second largest state. You have a problem—demand for power is soaring, and supply is increasingly erratic… even shrinking.
You’re faced with the fact that the wind turbines and solar panels that make up a large chunk of your capacity are often barely producing. And that your underappreciated, overtaxed and undercompensated thermal plants that are supposed to fill the gap are struggling to keep up.
You know you have to do something, but you also know you have to answer to a lot of people who don’t want you to do anything—mostly because they don’t want you drawing attention to the problems on your system, lest their role in creating or enabling those problems makes the front page.
Sheridan continues by identifying culprits.
You have a governor, who has vowed to keep Texas free from a green energy takeover, but seems weirdly happy to help facilitate just that. You have a confused legislature, who’s slashed your budget and oversight after the last blackout fiasco, which was largely enabled by persons of their own ilk.
You have a public utility commission of questionable competence, who appointed your bosses and can fire you at any time. You also have a media who are unabashed cheerleaders for overhyped wind and solar generation. They are also ready to pounce on any hint of mismanagement or corruption.
Finally, you have a demanding public, who are used to cheap and reliable power and who won’t tolerate interruptions.
So what to do? Sheridan ends:
You try to avoid making any hard decisions. You try to squeeze every last megawatt out of the generators on your system, even if it means risking damage or breakdowns. You try to delay any orders to cut power to customers, even if it means risking instability or collapse.
You also position yourself to shift the blame for these circumstances to others than yourself, your organization and your bosses, even if it means ignoring the root cause of your problem—the growing reliance on intermittent and unreliable sources of energy that are incompatible with your grid and its mission.
You hope that somehow, some way, you can get through this crisis without anyone noticing how close things are to the edge. You hope that no one will ask you why you didn’t better plan ahead, why you failed to act with greater urgency, why you didn’t invest in more reliable and resilient infrastructure, why you didn’t stick to reliable, dispatchable, and affordable forms of energy.
You pray that no one will question your competence, your integrity, or your loyalty. Most of all, you hope no one will realize you’re in charge of a massive and growing house of cards—increasingly pressing your luck and that of the state with each passing day.
To Sum It Up: Say hello to Pablo Vegas, president and CEO of ERCOT and the most on-the-spot person in Texas. And wish him luck… he needs every bit he can get.
Commentary
It is time to do now what was not done in 1999 in Texas. First, deregulate the electricity market, do not re-regulate it under a new regime. That means removing public utility regulation of rates and other terms of service, as well as end the franchise protection over geographical territory.
Second, the owners of transmission and distribution assets have the right to use their property as they want without state or federal mandates involving other parties.
Third, intermittent generation (wind, solar, batteries) or related transmission will not be advantaged by taxpayers or under regulated rate designs. Private contracting will settle the exact terms in a truly free market. The what, when, where of electricity in the home or business or otherwise.
This will require new laws to repeal old ones. Ideas have consequences–let the debate broaden.
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