In recent years, Texas has become a bellwether for advances in wind turbines and renewable energy. The wide-open, breezy Texas panhandle offers some of the best wind resources in the country. But some surprising shortfalls are emerging in Texas’ electricity production—and that could prove instructive for other states that are looking to ramp up their reliance on renewable power.
New technologies are undoubtedly helping to make wind and solar power more attractive. But Texas is learning that the transition from baseload power plants to weather-dependent renewables brings unintended consequences—including new costs and complexities that pose challenges for reliability.
In recent years, Texas jumped head-first into the large-scale deployment of wind turbines. And as this subsidized wind generation came online, coal plants found they could no longer compete in the region’s electricity market. However, these were coal plants that had long anchored the state’s energy portfolio. And now, Texas is finding that the loss of this coal capacity, along with a greater reliance on wind power, is leading to power shortages. The problem is that these new wind systems are entirely dependent on favorable weather conditions. In contrast, the coal plants they replaced typically ran non-stop for months at a time.
On August 12, a heatwave drove electricity demand in Texas to an all-time high. Electricity prices across the Texas power grid surged 36,000 percent, to roughly $6,537 per megawatt-hour—far higher than the average Texas price of $20 to $30 per megawatt-hour. Not only did electricity demand climb enormously as Texans cranked their air conditioners in 100-degree weather, but electricity generation at Texas wind farms simultaneously fell 50 percent due to lack of wind in the hot, listless air.
Things actually got worse the next day, when temperatures in Dallas climbed past 103 degrees. Electricity prices briefly surged past $9,000 per megawatt-hour. And the region hit an alarm point as available power reserves dwindled to just 2,121 megawatts—a safety margin of less than 3 percent.
With the electricity market in Texas shifting from baseload coal plants to renewables, 20 percent of the state’s power in 2019 is expected to come from wind. It’s now a guessing game of whether or not there will be enough electricity when consumers need it the most. Wind sources are unpredictable, and with greater reliance on weather-dependent power, regulators in Texas and other states need to make sure markets are adequately valuing power plants that support grid reliability. It’s a situation one industry analyst described as “designed to play chicken with blackouts.” The stakes of the game are that high.
As states look to incorporate more renewable energy, they should consider the importance of a balanced, diverse mix of energy sources. They shouldn’t need a crisis, or unexpected outage, to start focusing on reliable electricity production.
Terry M. Jarrett is an energy attorney and consultant who has served on both the board of the National Association of Regulatory Utility Commissioners and the Missouri Public Service Commission. He contributes regularly to LeadingLightEnergy.com.
