The Electricity Reliability Council of Texas (ERCOT) released projections last week indicating that intermittent wind and solar generation will continue to dominate the Texas grid for the next decade. The projections were contained in ERCOT's annual Report on the Capacity, Demand and Reserves, which predicts the growth of electric demand and the amount of generation available to power Texas' growing economy.
ERCOT manages the grid that supplies electricity for about 27 million Texans. The grid connects more than 54,100 miles of transmission lines and 1,250 generation units, covering about 75 percent of Texas and 90 percent of the state's electric load.
In recent years, wind and solar have displaced coal, nuclear, and natural gas as the primary source of new generation in Texas. According to ERCOT's projections, this trend will continue. Over the next five years, ERCOT forecasts that only 972 megawatts of new generation from coal, nuclear, and natural gas will come online, while 29,000 megawatts of renewables are scheduled. Solar makes up 96 percent of the scheduled growth of renewables.
The primary reason for the rapid growth of renewables in Texas is federal and state subsidies. According to the congressional Joint Committee on Taxation, federal subsidies for solar will total about $55 billion over the next four years. About $8.4 billion of that will go to solar generators in Texas. Subsidies for wind will be about $33 billion, with about $9 billion flowing into Texas.
Renewables also receive significant subsidies from Texas, particularly from local property tax abatements through the now-defunct Chapter 313 program. According to the Texas Comptroller, wind generators are currently receiving property tax abatements totaling $2.5 billion under the program, while abatements for solar generators will receive about $3.3 billion. The abatements typically are received over a 10-year period.
Bill Peacock, policy director for The Energy Alliance, points to reliability problems caused by the growth of wind and solar for the Texas grid. "While ERCOT projects large reserve margins due to renewables," he said, "as we have seen even this week Texas continues to experience problems with maintaining enough electricity to keep the lights on." Peacock added: "This is because the intermittent nature of both wind and solar means that we can't count on them being available when we need them most."
