![]() Of course, those claims omit the fact that Texans are all paying for backup power to support the grid when the wind and sun aren’t available - meaning they’re not really 100 percent renewable.Īnd therein lies the problem that the Texas PUC must solve. In contrast, wind and solar generators are being built because they benefit from massive federal subsidies and often have guaranteed offtake contracts with large commercial and industrial users or municipal power utilities, all of whom want to claim they are 100 percent powered by renewable energy. Power plant developers cannot predict their revenue from year to year, much less 20 years into the future, and ensure that they can get a return on their investment. ![]() Given these massive and unpredictable swings in prices, it’s no wonder that Texas, which sits on an ocean of natural gas, is not building gas-fired power plants to stabilize its grid. Wholesale electricity prices in ERCOT often fluctuate from more than $1000/MWh to negative in the span of a few days, depending on whether wind output is outpacing demand or not. What matters most to the long-term health of the ERCOT market is electricity prices, and the problem with the high variance of our wind and solar output is that it is leading to more variance in prices. Unlike the wind, which may produce only 2 percent of its installed capacity, as it was during its nadir on July 13, but could easily produce more than 50 percent during the next heat wave, Texas can count on gas and coal to be above 90% during the hottest days. While those outages are occurring at a higher rate than ERCOT expects during the summer, our dispatchable fleet has still operated at well above 90 percent of its rated summer capacity with far less variability than wind and solar. Much of the mainstream media and “expert” commentators are focusing on outages of gas and coal generators. Wind generation has often been below 6,000 megawatts during the hottest hours of the afternoon this summer, less than 20 percent of its installed capacity and much less than the 9,363 megawatts ERCOT expects from wind during peak summer periods. The second factor is our increasing reliance on wind generation that does not line up with demand. The previous demand record of 74,820 megawatts, set in August 2019, was broken repeatedly this summer, with demand reaching 78,419 megawatts on July 12. The first factor in play is growing demand. The heat waves of the past two months illustrate exactly why the Texas grid is becoming less reliable. ![]() The threat of outages will continue to increase until the Public Utility Commission of Texas (PUC) requires wind and solar generators to pay for the reliability costs they impose on the grid. However, the long-term picture shows that dispatchable capacity declining precipitously and being replaced entirely by wind and solar generation that is not being held to any reliability standard. The ERCOT grid may be fine for the rest of this summer because the past two years have not seen substantial retirements of dispatchable gas and coal generation that the grid relies upon to meet peak demand as was seen in the prior five years.
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