Understanding the Texas Energy Predicament

By Institute for Energy Research.

"Texas is being hit with record temperatures and escalating energy prices as cold weather has caused over 4 million customers to be without power and the Electric Reliability Council of Texas, the state’s independent system operator which manages about 90 percent of the state’s electric load, has found itself unprepared for the onslaught, losing wind turbines to icy conditions and gas lines to freezing temperatures. Furthermore, natural gas for heating homes and businesses is given priority over electrical generation and industrial supply needs, which limits natural gas supplies available to generating units.

About 30 gigawatts of capacity in Texas is not operable due to the weather conditions, and downed distribution lines are adding to the problem of getting electricity to customers. Nuclear and coal plants could help save the people in Texas from the freezing weather, but there is insufficient capacity as competition from subsidized renewable technologies and low cost natural gas force existing coal and nuclear plants to retire. Competition from heavily subsidized wind power and inexpensive natural gas, combined with stricter emissions regulation, resulted in coal’s share of Texas’s electricity to drop by more than half in just a decade to 16 percent. Just a few years ago, then Secretary of Energy Rick Perry, a previous Governor of Texas, warned that coal and nuclear power were needed to keep the electric grid resilient, but environmentalists and politicians did not want to hear it, believing that a zero-carbon future is the way to go and that nuclear power is unsafe.

Texas Electricity Mix

Texas produces more electricity than any other state, generating almost twice as much as Florida, the second-highest electricity-producing state. Natural gas-fired power plants supplied more than half of the state’s electricity generation in the first 11 months of 2020. Since 2016, about 5,000 megawatts of Texas coal-fired generating capacity have retired. As a result, coal-fired power plants supplied just 16 percent of the state’s generation in the first 11 months of 2020, down from about one-third in 2014. The state’s two operating nuclear power plants typically supply almost one-tenth of the state’s electricity generation.

Wind-powered generation in Texas increased rapidly during the past two decades, providing almost one-fifth of Texas’s generation in the first 11 months of 2020. Texas leads the nation in wind-powered generation, producing 28 percent of all the U.S. wind-powered electricity in 2019. Solar power produced 2 percent of Texas’s generation in the first 11 months of 2020. The state has encouraged renewable energy use through its renewable energy mandate and by authorizing construction of transmission lines to bring electricity from remote wind farms to urban market centers. Texas was the first state to reach 10,000 megawatts of installed wind generating capacity. At the end of 2018, Texas had 24,185 megawatts of wind capacity installed, and, by the end of November 2020, installed wind capacity was 29,230 megawatts. Most of the generating capacity added in Texas since 2010 has been fueled by either natural gas or wind.

The Public Utility Commission of Texas first adopted rules for the state’s renewable energy mandate in 1999 and amended them in 2005 to require that 5,880 megawatts, or about 5 percent of the state’s electricity generating capacity, come from renewable sources by 2015 and 10,000 megawatts of renewable capacity by 2025, including 500 megawatts from resources other than wind. Texas surpassed the 2025 goal in 2009, primarily because of the generating capacity provided by the state’s wind farms, prompted by generous federal production tax credit subsidies.

Texas’s current energy problem is reminiscent of California’s problems last summer—another state with a renewable energy mandate. Last August, California had to institute rolling blackouts during a heat wave when it had insufficient power to deal with the increased demand from air conditioning and the lower output from its solar plants, which were hampered by smoke from the state’s wildfires. Normally, California would purchase power from neighboring states when it runs short but those states were also affected by the heat wave and needed their excess power to meet their own increasing demand. Also, due to California’s renewable energy standard, its electric utilities were focused on renewable investments and not maintaining their generating units and distribution system.

Texas’s Recent Change in Power Mix

Wind turbines at times this month generated over half of the Texas power generation. As wind generation dropped off and demand surged, fossil-fuel generation increased and covered the supply gap. Between the mornings of Feb. 7 and Feb. 11, wind as a share of the state’s electricity fell to 8 percent from 42 percent, according to the Energy Information Administration. Gas-fired plants produced 43,800 MW of power Sunday night and coal plants chipped in 10,800 MW—about two to three times what they usually generate at their peak on any given winter day.

Between 12 a.m. on Feb. 8 and Feb. 16, wind power plunged 93 percent while coal increased 47 percent and gas 450 percent. Nuclear dropped 26 percent due to a reactor shutting off because the sensor could not relay that the system was stable—a safety feature. The past week in Texas shows that the state’s electricity grid that depends increasingly on subsidized, intermittent wind and solar energy needs baseload power to handle surges in demand. Natural gas helps but reliable coal and nuclear power are also needed.

Source: Wall Street Journal

Energy Security vs. Electrification

The Texas and California situations indicate that energy security and resilience are serious issues that need to be addressed to ensure that Americans have enough reliable and affordable energy. These recent experiences prove that during extreme weather, solar panels and wind turbines are of little value to the electric grid, especially when investment flows to them because of subsidies and mandates at the expense of grid reliability and resilience.

Energy security and resilience is the opposite of what Joe Biden and other politicians want for our future when they advocate for a “green new deal” or something similar by indicating that the United States should stop consuming hydrocarbons and use only carbon free sources. They want electricity to be almost entirely generated by renewable energy and for all sectors of the economy to be supplied solely by electricity. This means if cars and trucks and other vehicles become all electric, the increased electric demand will be supplied mainly by renewable energy, which will also need to replace the retiring hydrocarbon capacity—capacity that would last for decades if it was not forced to prematurely shutter, and which supplies 62 percent of our electricity. According to Elon Musk, an all-electric vehicle fleet worldwide will double the global demand for electricity. Given what has occurred in California and Texas, an all-electric energy future supplied mainly by renewables seems very unlikely to be successful.

Further, in line with a no carbon future, dozens of cities across the country are imposing bans on the use of natural gas for heating and cooking in new buildings. In addition to being bad for energy security, the bans are a form of regressive tax on the poor and the middle class because they compel consumers to use electricity, which costs four times more than natural gas on an energy equivalent basis. Despite what has occurred in California and Texas, the efforts to ban hydrocarbons and to electrify everything will continue because politicians say so, rather than responding to consumer needs.

Conclusion

The ongoing weather threats indicate that the United States should not rely on electricity alone to provide the country’s energy needs—particularly electricity produced mainly by intermittent renewable energy, which relies upon China for its manufacture and/or foundational minerals. American society needs to be more resilient to threats of all kinds and a diverse energy sector would provide that resiliency. Electrifying everything will result in the opposite effect. But that is what President Biden plans to do with his energy schemes."