In June 2023, at the start of a summer in which Texas experienced record electricity demand and came to the brink of rolling outages on Sept. 6, I wrote a warning about the upcoming winters, noting that “…the Texas grid is moving toward a situation where the winter period, not the summer period, will see the greatest likelihood of electricity shortages, even after the winter resiliency measures enacted after February 2021 are fully implemented.”
This week, Mother Nature sent Texas a friendly warning shot to that effect, and Texas leaders should heed it.
I say it was a friendly warning shot for three reasons. First, temperatures were similar to Christmas 2022, with lows in Central Texas reaching 16 degrees and in Dallas 10 degrees. That is 10 degrees warmer than Winter Storm Uri in February 2021. Nevertheless, electricity demand in the Electric Reliability Council of Texas (ERCOT) region topped 77 gigawatts (GW) twice, exceeding the forecast demand at the height of the Uri storm and smashing the official record from Christmas 2022 of 74 GW.
Winter demand is growing rapidly in Texas, even faster than summer demand, as newer homes are usually equipped with heat pumps that are efficient in mild weather but become electricity hogs when the temperature drops below freezing. Environmental groups pushing to end the use of fossil fuels want every building to switch away from gas toward electric heat, but doing so will make winter electricity demand grow even faster.
It is also important to note that these demand records were set despite the implementation of “demand response” measures from manufacturers, wherein ERCOT, using fees it extracts from Texas ratepayers, paid them to shut down during the storm. While shutting down some flexible manufacturing facilities is better than rolling outages, someone at the Public Utility Commission of Texas (PUC) should be counting the economic cost of these measures and weighing that cost against the cost of bringing on additional electricity supply in ERCOT.
Second, this storm did not bring significant snow and ice to Texas. While the Dallas and Houston airports were shut down by small amounts of freezing rain, the state’s power plants kept humming. Gas and coal power plants had a similar 90+% availability rate as they do in the summer, and the iced-over wind turbines and solar panels of Winter Storm Uri were not a problem this time. The 10 degree-higher temperatures meant much lower risk of outages due to frozen parts and fewer problems with natural gas delivery. While this storm showed that some of the weatherization and operational improvements following Winter Storm Uri are producing benefits, it was not a true test of those measures.
Finally, the wind blew and the sun shone just enough at the right times this week to keep the all-important measure of net load, which equals demand minus wind and solar output, below the records set this summer, when the grid was right on the brink of being short. Net load determines how much gas, coal, and nuclear generation is needed at any given time and is the most important measure for determining whether the grid is under stress or not. Bottom line: Because net load did not exceed the available supply of gas, coal, and nuclear power this week, outages were avoided.
However, what is striking about this event and the event last September is that net load exceeded the previous winter and summer records despite the addition of 10 GW of wind and 15 GW of solar over the past four years. Net load on Sept. 6 exceeded 70 GW, surpassing the record of 69 GW set in August 2019, and net load during this storm came within a whisker of beating that same 69 GW record.
At the peak demand hour, Tuesday morning from 7 a.m. to 8 a.m., wind was producing 9.5 GW, far below ERCOT’s forecast average of 15.3 GW during peak winter hours, and solar produced almost nothing. If gas, coal, and nuclear had performed at 60-70% of their expected value instead of 90+%, the grid would have collapsed. This level of variability and uncertainty continues to impose a cost on the system that ratepayers are bearing.
Net load also exceeded 68 GW during that same hour Monday morning, at which point combined wind and solar (almost all wind) was only 5 GW. And net load was nearly 68 GW Tuesday night from 7 p.m. to 8 p.m., when there was no sun and wind was only producing 3.2 GW. If the wind Tuesday morning was as low as it was Monday morning or Tuesday night, the ERCOT grid likely would have been short of supply. There’s nothing to say that won’t happen next time, and while the outages would have been only a few hours, it’s easy to see from this storm how variable wind and solar are and how Texas’s increasing reliance on those resources is increasing the likelihood of outages.
Given that most of what is being built right now in ERCOT is solar, which contributes almost nothing during winter peaks, it is likely that we will see an all-time net load record set in the winter sometime soon. At that point, winter will supersede summer for having the highest risk of electric grid outages, even if all the winterization and other measures taken after Winter Storm Uri work perfectly. And given that winter demand is rising faster than summer demand, we can say that winter is officially becoming the new summer.
What this means is that despite adding copious amounts of wind and solar to the Texas grid, those resources aren’t even able to keep up with demand growth, and additional dispatchable generation is still needed. Fully $100 billion in private investment and tens of billions in taxpayer subsidies have been spent on wind and solar infrastructure in Texas, and that investment is not entirely displacing the need for additional natural gas generation. It’s no wonder our electricity bills are still going up. Despite low natural gas prices and “cheap” wind and solar fuel, we are paying an arm and a leg for two generation systems.
What’s needed to fix this problem is for wind and solar to be required to always provide a certain amount of power. Texas Gov. Greg Abbott called for this reform in a July 2021 letter to the PUC, but the PUC has so far failed to act on it. While the Texas Legislature mandated such a requirement for new generation starting in 2027, it won’t be enough if the existing 55 GW of wind and solar in the system is grandfathered in. The requirement must be universal to shore up the grid and to fix the unbalanced flow of investment and revenue in the ERCOT market.
In addition, wind and solar must shoulder some of the costs of keeping the grid frequency stable, a function gas, coal, and nuclear generators perform by default but wind and solar cannot do. ERCOT is planning to spend nearly a billion dollars on equipment to do that in the next few years, and more will be needed soon thereafter as more wind and solar is added. And ERCOT’s actions to manage the uncertainty in wind and solar output on a day-to-day basis this past summer, some of which was necessary and some not, added billions of dollars in costs.
Texas ratepayers cannot continue to foot the bill for these costs. As long as the system remains unbalanced, Texas ratepayers will have to subsidize baseload and backup power, as Texas will start doing this year and as California has been doing.
Chasing wind and solar subsidies with subsidies for reliable power is not market reform. It is a stopgap measure that will send costs soaring. True market reform must require wind and solar generators to pay for some of these costs, thereby putting the costs on a single balance sheet and forcing a proper reckoning of them.