When the Electric Reliability Council of Texas (ERCOT), the operator of most of the Texas electric grid, declared an Energy Emergency Alert 2 on Sept. 6 for the first time since Winter Storm Uri, it exposed how renewable energy and renewable energy subsidies are rapidly undermining the reliability of the Texas electric grid.
Despite efforts of promoters of renewable energy to deflect blame in the aftermath of the emergency, the recent phenomenon of near grid failure despite declining demand points directly to wind and solar generation as the cause behind the grid’s reliability problems. Where only a few years ago modern natural gas peaker plants would have been called on to meet peak demand at 5:55 on Sept. 6, solar generation is now filling much of that role. The problem with this is that the ability of solar generation to meet demand, unlike natural gas generation, rapidly diminishes as the sun goes down.
By 7:25, demand on the grid had dropped by 4,680 megawatts (MW) from peak. But solar output declined by almost twice as much, 8,498 MW. Wind generation, already operating well below expected capacity during the day, also declined by 592 MW. At that point, there was nothing left for ERCOT to do but declare an emergency when the margin between demand and available generation capacity dropped to 1.6 percent.
ERCOT said earlier this year that Texas has 146,719 MW of installed generating capacity. Yet only 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 on Sept. 6 when renewables failed to show up.
This problem can be attributed directly to renewables. 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 growth in renewables 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 (PT) 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.
The Texas grid did not almost fail on Sept. 6 because it was too hot outside. The Texas grid did not almost fail because Texans were using too much electricity. The Texas grid almost failed because $29 billion of federal, state, and local subsidies over the last 18 years have left Texans relying on renewable energy sources that cannot generate electricity when it is most needed.
Texas 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.
