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Economy

Renewable Energy Is So Far Passing Its Texas Test

Wind and solar power are having a remarkable heat wave.

Texas energy production.
Heatmap Illustration/Getty Images

The past few days have shown that, at least so far, Texas’s deregulated, renewable-and-gas heavy electric grid can stand up to the extreme summer heat.

Late Thursday afternoon, wind and solar were providing 40 percent of the power on operator ERCOT’s grid — around 30,000 megawatts, about even with the amount of power coming from natural gas. At the same time, prices in Texas stayed relatively low. This impressive production from solar and wind comes amid a heat wave that, earlier this week, caused record-breaking demand on the Texas grid. While Texas has a unique combination of systemic electricity reliability issues and high renewables usage, the question of if and how renewables can shoulder the load of spiking electricity demand is one being asked across the country as the grid begins to decarbonize.

Despite its fossil-fuel-friendly reputation, Texas is one of the leading states for renewable energy. Last year, renewables accounted for about a quarter of Texas’ electricity, according to the Energy Information Administration. Around 15 percent of all the United States’ renewable generation comes from Texas.

Since Winter Storm Uri knocked out power in much of the state, grid reliability has been a concern in America’s most deregulated and isolated electricity market. For conservatives, the issue was clear: There was not enough dispatchable, fossil-fuel generation on the grid. For those who favored renewable energy, the need was for more storage and resiliency investments, given the demonstrated risk of coal and gas going offline during extreme weather — and some power plants indeed went offline during the heat wave.

The Texas legislature ended up rejecting some proposals that would have kneecapped Texas’ further renewable generation, but did set up a program to provide low-cost loans to fossil plants that provided dispatchable electricity.

But right now, wind and solar is doing much of the work to keep the air conditioning on and prices low. “They are really cranking,” Joshua Rhodes, a research scientist at the University of Texas, told me. They were also holding costs down for consumers, especially compared to last week when prices spiked to above $4,400 per megawatt-hour last week. "Wind and solar have saved tens of billions over the past decade when it comes to electricity prices," Rhodes said.

“Last week was a financial disaster for consumers and a windfall for generators,” explained Ed Hirs, a consultant and lecturer at the University of Houston.

“Wind is doing quite well, sometimes it’s better to be lucky than good,” Hirs said. “This high pressure that’s sitting on top of the state right now has good circulation on West Texas wind farms. That has played to our advantage. Without wind and solar they don’t have enough power on the grid. Thankfully, on the hot days we have peak production of solar.”

Texas has by far the most installed wind capacity of any state and more solar capacity than any state save California. Taking advantage of federal tax credits and Texas’s famously permissive regulatory environment, developers have found a welcoming environment for putting “steel in the ground,” whether it’s wind farms in North Texas or utility-scale solar in sunbeaten South and West Texas. While California far outpaces the rest of the country in energy storage, Texas is number two, with 14 percent of the country’s installed storage capacity.

Texas’s experience of high demand and high performance from its renewables may be a preview of what the rest of the country will face this summer and in the coming years. Due to a combination of fossil power plants being shut down and the rise of wind and solar across the country, the electric grid can no longer rely entirely on fossil fuels to keep the lights on when demand is high, according to the North American Electric Reliability Corporation. Across the Southwest and Midwest, NERC projects that wind will be a “key factor” in keeping the grid up this summer.

But while Texas’s grid is performing well now, it may get tighter farther into the summer.

“The real test for the ERCOT system is probably going to be late July through August,” Rhodes said.

Matthew Zeitlin profile image

Matthew Zeitlin

Matthew is a correspondent at Heatmap. Previously he was an economics reporter at Grid, where he covered macroeconomics and energy, and a business reporter at BuzzFeed News, where he covered finance. He has written for The New York Times, the Guardian, Barron's, and New York Magazine.

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