Texas generates more renewable energy than any other state. But a bill that has passed the Texas Senate could undercut the profitability of renewable projects in the state by requiring them to pay for their own backup power generation. This comes as Texas electricity demand grows and reliability remains a challenge.
Renewables have kept the AC running on hot Texas days, but one big problem remains: The wind doesn’t always blow and the sun doesn’t always shine.
“There need to be other resources available to the grid to effectively back them up,” said Ken Medlock, Susan G. Baker Fellow in energy and resource economics at Rice University’s Baker Institute for Public Policy.
If this bill passes, Medlock said it could incentivize the building of natural gas plants and other sources of steady or “firm” power that are pricier to build and run. “This bill is trying to build insurance.”
But making wind and solar companies pay for their own backup generation hurts the industry, according to Doug Lewin, a renewable energy consultant and author of Texas Energy and Power newsletter.
“You would see a wave of renewable energy plant retirements,” he said.
And Ed Hirs, University of Houston Energy Fellow, said that while Texas needs to solve its firm power problem, “[this legislation] will not accomplish the goal.”
The state needs a systematic approach to paying for backup power and putting it all on renewable companies isn’t the answer, he added.
