The Texas Public Utilities Commission (PUC) has indicated that the state's electricity infrastructure and market will face significant adjustments in the aftermath of February's widespread outages, according to a report by Energy Wire.
The new grid adjustments likely will favor natural gas over wind and solar, due to the state's growing demand for dependable electricity, according to Peter Lake, chairman of the PUC. He said the energy market in Texas could experience significant changes next year.
“We are not tweaking on the edges or making marginal changes," Lake said during a public hearing, "We are taking a blank-slate approach for a full overhaul and redesign of this market to drive reliability.”
Lake also said that by the end of 2021, the PUC should have a clear strategy for redesigning the Texas energy market, with reliability and affordability as top priorities.
“We need to have a market designed so that you provide reliability," he said. "That’s where the financial incentive is presented.”
Robert Michaels, a retired Cal State Fullerton economics professor and energy analyst, told the Dallas Express that he thinks wind and solar subsidies "factor into" current grid stability and volatility problems in Texas.
"What's happened is you've had a lot more investment in plants, which by their nature are less-reliable intermittent sources," Michaels stated, “Normally in a power system, you add some extra generation capacity to it, you're going to be strengthening it. Here the problem is that when you add intermittent capacity like wind or solar, you could very well be weakening the grid because it basically gives it another contingency that might go out."
Also Texas Railroad Commissioner Wayne Christian told Austin News in an interview that the state's excessive reliance on renewable energy was to blame for the outages caused by Winter Storm Uri, noting that "electricity generated from wind and solar decreased 52% while the electricity from natural gas increased 72%."
Most studies show that Texans rely on renewable power sources for less than one-third it their energy needs.
According to Energy Alliance data, switching to a capacity market, in which generators are compensated once for their existence and then compensated again when they sell power, will raise the cost of electricity for Texas customers between $4 billion and $8 billion per year.
Bill Peacock, policy director for the Energy Alliance, also noted that if Texas adopts a full capacity market for energy, Texans would have an "electricity grid that looks much like those of California and New York. No more reliable, but a lot more expensive."
A Real Clear Energy (RCE) report found that Texas companies spent approximately $66 billion on solar and wind energy prior to the February blackouts. The RCE report also notes that renewable energy companies in Texas were only able to spend this much because “the wind and solar sectors collected approximately $21.7 billion in local, state, and federal subsidies and incentives.”
Additionally, RCE reported that, as a result of taxpayer money, Texas wind and solar businesses received an artificial 32.9% discount on their purchases compared to the rest of the market, indicating that taxpayers funded 33 cents of every dollar spent.