VIEWPOINTS
By Michael Looney
With the Texas summer heat in full swing at the end of June, ERCOT CEO Pablo Vegas told his board members that the risk of emergency on the Texas grid was less than 1% – down substantially from 10% in the summer of 2024, and down even more from 2023 when ERCOT declared a grid emergency, issuing numerous conservation notices for Texas electricity consumers.
This wasn’t by coincidence – reliability and affordability of power in the ERCOT market have progressed significantly in recent years, with Texas leading the nation – by far – in power generation from renewable sources like wind and solar, which accounted for more than 90% of new electricity generating capacity in the U.S. last year.
It’s not a coincidence that, as we’re witnessing enhanced reliability of the ERCOT grid in Texas, renewable energy sources are punching far above their weight when it comes to keeping power online for tens of millions of Texans and their businesses across the state.
In fact, this summer, renewable energy sources often powered between 40-50% of the Texas grid on average each day – which means that, if not for wind and solar, Texas’ grid would have likely entered emergency conditions and experienced rolling blackouts.
At the same time, wholesale electricity prices remained at the bottom end of the cost spectrum when compared to other state and regional grids across the country, thanks in large part to Texas’ competitive market in which generators compete to provide power at the lowest cost.
Yet, during the most recent legislative session, we saw a slew of anti-renewable bills aimed at reining in a clear bright spot in Texas’ power generation mix that is critical for sustained reliability and comparatively lower prices.
There was legislation to bury renewable projects in big government red tape. There was legislation that would have shuttered thousands of megawatts worth of solar and wind farms that even the state’s powerful oil and gas lobby thought went too far. And, of course, there was the proposal that made national headlines for requiring solar plants to provide power at night.
While none of these pieces of legislation ultimately made their way to the Governor’s desk, the dissonance between what the ERCOT market is telling us and the ‘solutions’ emanating from the Legislature points to a larger problem: we have been tied to the concept of ‘one or the other’ source of energy to keep our grid strong, when we should be embracing ‘all-of-the-above.’
Governor Abbott understands this concept well, having embraced an ‘all-of-the-above’ approach to energy, including by launching a ‘nuclear renaissance.” In the future, a robust supply of nuclear power generation will be a key driver in further diversifying. In the meantime, to construct a new, dispatchable natural gas power plant in Texas right now, companies currently have to wait as long as seven years for gas turbines. Meanwhile, cheaper solar and wind energy can begin generating electricity comparatively quickly.
The current market dynamics tell us that, rather than constrain our options, we need to continue to embrace a wide range of different energy sources that can help grid capacity keep pace with ever-rising demand.
Next session, legislators should not seek new ways to distort the free and competitive market that keeps power affordable and reliable. Instead, they need to continue to embrace Texas’ successful ‘all-of-the-above’ approach to energy.
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Michael Looney is the Vice President of Economic Development for the San Angelo Chamber of Commerce. Contact him by emailing michael@sanangelo.org
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