Needlessly Reducing Supply Risks Another Grid Failure
Nine months after the Great Freeze of 2021, after a full legislative session, three special sessions, resignations from the Electric Reliability Council of Texas (ERCOT) and a complete leadership turnover at the Texas Public Utility Commission (PUC), the powers that be in Austin have still not learned the right lessons or taken sufficient steps to prevent a repeat of that unnecessary disaster.
By now most Texans are aware that, as (then) ERCOT CEO Bill Magness testified earlier this year, the state’s power grid was “less than five minutes” away from a total grid failure that would have meant blackouts lasting weeks or months in a historically catastrophic failure. In other words, as bad as it was, it could have been much worse.
The Legislature’s solution, Senate Bill 3, requires electric generators, natural gas facilities and pipelines to weatherize their plants to ensure they can handle extreme weather, with a fine of $1 million per day for plants in violation. And as if on cue, political hurrahs followed its signing.
But in a hint that demands for cold-weather winterization might not be enough, just a few days after Governor Abbott signed SB 3 into law, ERCOT asked Texans to conserve energy due to the combination of several power plans being offline for repairs and a period of extreme heat.
Other than the tragic death of over 200 Texans and enormous property damage, perhaps the most disheartening feature of the freeze was the rush of politicians and opinion-shapers to force their preferred narratives onto the disaster.
Many were quick to blame renewables for dropping the ball. But this rush to spin and score political points was undermined by the embarrassing revelation that a nearly a third of power plant failures were due to an inability of natural gas plants to get fuel.
Attempts to blame renewables also overlooks that ERCOT’s grid forecasts did not heavily rely on renewable energy to meet electricity needs in February. Texas’ policy choices recognize that while wind and solar make sense in Texas, for the near future at least they are not going to support the bulk of Texas’ energy demands. Most of Texas’ electricity comes from so-called thermal plants (coal, natural gas, and nuclear), which is why widespread outages at those plants were so devastating.
But blaming renewables isn’t simply wrong—it also establishes a wrong narrative that leads to wrong or at least incomplete solutions.
Because the Texas grid is largely unconnected to other regional grids, and thus can’t tap into them in a pinch, it is doubly important that Texas has an abundant portfolio of energy sources to ensure adequate electrical generation.
And while SB 3 will help in extreme situations, our state needs to focus more directly on ensuring an abundance of electrical generation and increasing that supply to meet growing demand and a growing population. That means encouraging more of everything—gas, wind, solar, geothermal, nuclear, and other new and innovative technologies like mass battery storage.
The good news is that there is new generation in the works, mostly focused on renewables. But we need new gas plants as well in order to have a diversified portfolio of generation to meet seasonal circumstances. It is reasonable to assume that improved management by ERCOT, streamlined permitting processes and reasonable incentives to invest will result in an increase in generation and better coordination among generators.
Mostly, we need to ensure that we are not doing anything policy wise to reduce supply. The wrong lesson to take from the freeze is that we need fewer renewables, and the wrong solution is to punish renewables. It’s a policy misjudgment to pit one energy source for electrical generation against another. Defending fossil fuels doesn’t require trashing renewables, or vice versa. In other words, we need an “all of the above” strategy for generation and distribution, and no policy should be designed to take a single megawatt of generating capacity out of the marketplace, regardless of technology.
Our current abundance in fossil fuels was driven by innovation, and policy should encourage continued innovation in all forms of energy generation. We need more of everything, all of the above, to ensure Texas’ continued economic leadership and dynamism going forward.