Energy Alliance policy director: Legislature ‘didn’t do a very good job’ with addressing energy issues

Energy Alliance policy director: Legislature ‘didn’t do a very good job’ with addressing energy issues_60f581bcce0b7.jpeg

The reputation of the wind and solar industry took a hit in the Lone Star State after Winter Storm Uri battered Texas in February and left millions without power. With the demand for energy only increasing, the state needs its Texas Legislature to address the wind and solar energy problems in the grid, critics argue. However, Austin’s energy-related moves have dissatisfied many so far.

“[The legislature] didn’t do a very good job because they had two things to deal with,” Energy Alliance policy director Bill Peacock told Dallas Express. “One was the cause of the blackouts so they wouldn’t happen again, and the other was the aftermath.”

In Texas electricity costs $32 per megawatt hour on average. Uri’s blackouts and strain on the grid drove those costs to the moon, and Texans will be forced to shoulder the tens of billions of dollars that the blackouts cost, Peacock said, over the next 20 to 30 years.

“The aftermath of the blackouts was the billions of dollars that had been charged for electricity during the storm,” Peacock said. “The storm increased costs for everybody, but what really did it was when the Public Utility Commission increased prices from about $2,000/megawatt-hour to $9,000/megawatt hour. They essentially quadrupled the price of electricity and for no good reason.”

The energy analyst said that the Texas Legislature could have protected households from this massive expense.

Instead, energy companies were able to securitize the money lost through longtime bonds issued based on the state’s credit, the cost of which will eventually trickle down to Texas consumers.

According to the Texas Public Policy Foundation (TPPF), Texas’ February grid crisis was caused by a variety of renewable-related factors. These included no requirement for wind and solar to bear any intermittency costs they impose on the rest of the grid, decades of multibillion-dollar subsidies for wind and solar that make it difficult for reliable power plants to compete, and the inability of scarcity pricing and limited ancillary services to counterbalance the 50% variability of wind and solar reliability when they are most in demand.

Peacock said renewable energy is to blame for the blackouts that plagued Texas for days if looking beyond the obvious, proximate cause of cold weather. Houston Republic reported that Texans see that the recent winter storms exposed the danger of energy policies that make the state too dependent on wind and solar energy.

Many news sources have pointed out that Texans rely on renewable energy sources for less than one-third of their power needs.

Peacock explained that 80% of all new energy generation in the last three years has been wind or solar, which he considers significantly less reliable sources than natural gas.

Will the increasing reliability on renewables be inversely related to the cost of cooling homes for Texans? A study from the Energy Policy Institute at the University of Chicago found that rates for electricity bills rose 11% when renewable energy sources increased 1.8%, and prices increased 17% when the renewable share increased 4.2%.

The study concluded that “These cost estimates … likely reflect costs that renewables impose on the generation system, including those associated with their intermittency, higher transmission costs, and any stranded asset costs assigned to ratepayers.”

The renewable giants carry the most buying power in Texas’ electricity market, the Texas Public Policy Foundation says. A TPPF analysis shows that subsidies in the form of federal tax credits and state property tax abatements have significantly distorted the electricity market in Texas to the point where “wind generators, some owned by foreign governments, can pay the grid to take their power and still make money.”

Peacock said that although all energy sources experienced problems during Uri, wind and solar problems were the worst. According to the Houston Republic, the extreme cold and snow caused the wind turbines to freeze, leading to power outages during a time of overwhelming demand for energy.

Further, the blackouts began at about 1 a.m. on the first day, a time when the sun wasn’t shining so the solar generators weren’t generating.

“Between the two of those they weren’t there. They didn’t show up,” Peacock said of wind and solar sources. “Wind and solar failed at much larger proportions to their capacity than natural gas, nuclear or coal did. Much larger failure.”

Peacock has been critical of Chapter 313 abatements, noting the program essentially takes taxpayer dollars and uses them to subsidize large corporations. When 313 is used to subsidize renewable energy projects, there is additional harm to the Texas energy grid, Peacock said.

These projects create instability in the grid and are an unreliable source of energy production. Peacock notes that heavy reliance on renewables has led to blackouts in California. Texas experienced something similar during Winter Storm Uri.

A commentary to Real Clear Energy from Brent Bennett recommends that Texas prioritizes reliable energy above renewable energy to make sure “California-style blackouts don’t become the norm.”

Peacock said many members of the Texas Legislature, no matter the party, are too infatuated with the façade of being environmentally friendly, or are too intimidated by the renewable energy lobby, to see wind and solar’s shortcomings in true light.

“The renewable energy lobby spends millions of dollars in Texas to keep the subsidies coming,” Peacock stated. “Nobody is willing to take on wind and solar during the legislative session, so they basically did nothing to address the problem, which is the unreliability of renewable energy.”

Recent policy changes to update building codes, raise energy efficiency goals and require backup power facilities have made little progress except making electricity more expensive, Peacock said.

“The problem with renewable energy is that it’s intermittent,” Peacock said. “It only works when the sun is shining or the wind is blowing. And, unfortunately, the wind blows the least in Texas on hot summer afternoons when we really need the electricity. It’s not built to work when we need it.”

On a 90-plus-degree summer afternoon, households across the state are turning on fans and air conditioning units, and the energy demand reaches an annual high.

“And as we saw this winter, we’re probably at the greatest risk of winter blackouts in the in the middle of the night, and the sun isn’t shining in the middle of night,” Peacock said. “Solar can’t be counted on there. This intermittency of the renewable energies means they can’t be counted on. And the more we have, the less reliable the grid is going to be.”

According to the Reuters News Agency, capacity markets, the alternative to Texas’ competitive system, pay power generators in advance at a set price. Generators are paid again by the consumer as the electricity is used. A Reuters article notes that in a capacity market, “Generators get paid whether they produce power or not.”

Where the renewable companies’ checks increase, so do household electricity costs across Texas. According to the Energy Alliance, a form of capacity market already exists in Texas in the form of the Operating Reserve Demand Curve (ORDC). The ORDC is described as a tool used by energy regulators to artificially increase the cost of electricity, often to due unreliable renewable generators. Peacock’s research indicates that the ORDC increased the price of electricity by $3.6 billion in 2019, an increase completely outside of the control of consumers.

With the Public Utility Commission not holding renewable sources accountable for the harm done to the grid and no action from Texas Gov. Greg Abbott, Peacock said that the Lone Star State may be stuck with the current energy circumstances until the legislature is back in session.

“If Gov. Abbott doesn’t put something on the call, then essentially we’re just sitting here for the next year and a half, praying that it doesn’t get too hot or it doesn’t get too cold, and everything goes right,” Peacock said. “Because if we have even small problems and it gets real hot, then we’re going to be in trouble.”

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