Ft Worth Times

Some things are uncertain right now. It’s an unprecedented time in the world.

However, there are things that you can depend on. Politicians will squabble and posture. Movie stars will be paid millions of dollars for box office flops.

And it will be hot in Texas this summer, says Bill Magness, president and CEO of the Electric Reliability Council of Texas (ERCOT).

Bill Peacock | Submitted

“There is a lot of uncertainty in today’s world, but we are confident that Texas will still be hot this summer,” Magness said in the agency’s final Seasonal Assessment of Resource Adequacy (SARA) for the upcoming summer season.

“Texans will need electric power as they do every summer, and ERCOT is prepared to do our part to keep it flowing reliably,” he said.

Increasingly, that will mean more dependence on wind and solar power in a summer with a projected record demand for June, July, August and September. According to ERCOT’s Fuel Mix Report for 2020, wind produces 26 percent of power, coal 16 percent. Last year, both reached 20 percent.

The current record demand is 74,820 megawatts set on Aug. 12, 2019.

ERCOT adjusted its peak load forecast to 75,200 megawatts to account for economic impacts related to COVID-19. The new forecast is 1,496 megawatts less than that reported in the preliminary summer SARA and increases the summer 2020 reserve margin to 12.6 percent, up from 10.6 percent.

Perhaps the greatest risk this summer will be low wind input. If that occurs at a period of higher-than-normal generation outages, an Energy Emergency Alerts would have to be declared. It happened last summer.

Jason Isaac, senior manager of the Texas Public Policy Foundation’s Life: Powered project, said far too many Texas energy decisions are being driven by politics.

“With cities like Houston, San Antonio, Dallas, Austin, San Marcos, and Smithville (Hope doesn’t float after all), it’s because they’ve signed on to a nationwide initiative supporting the Paris Climate Accord,” Isaac said. “This is a purely political move that has taken root since President Trump signaled his intention to withdraw from the Paris Climate Accord.”

He said the people pushing this aren’t exactly Lone Star State residents.

“The political drivers are well-funded environmental groups like the Sierra Club and liberal city politicians seeking to satisfy their motivated base and major donors,” Isaac said. “On a broader scale, these actions are designed to put pressure on state and federal governments to make more substantial moves to force emissions reductions.”

Georgetown is a somewhat unique case, he said.

“In 2014, their city leaders forecasted that new wind and solar would be cheaper than forward market prices. They gambled on prices in ERCOT rising and bought far more energy than they needed, thinking they would be able to sell the excess for a profit — behind closed doors with no transparency into the contracts,” Isaac said. “They were then able to claim their utility was 100 percent renewable. Now their vast excesses of wind and solar are being sold for big losses. The bet turned out to be a major failure, and the citizens of Georgetown and the ratepayers served by the utility are left footing the massive bill.”

He said cities that have looked to wind power may come to regret their choice.

“Right now, cities can get a free ride on the rest of the ERCOT grid,” Isaac said. “They can sell excess wind or solar into the grid and buy energy from fossil fuel plants when their wind and solar plants are not producing enough. This can work when there are plenty of fossil fuel plants to buy from, but when they have to build expensive energy storage to keep adding wind and solar, cities will not find it so easy to make these moves.”

But he said there is no reason to be optimistic things will change. Proponents of wind power have set their sails and are not looking back.

“No doubt. Over 400 U.S. cities have signed on to the Climate Mayors initiative supporting the Paris Accord, which is a purely political move that will do nothing to help the environment,” Isaac said. “Using the same models that the United Nations IPCC uses, if we were to eliminate ALL U.S. emissions of CO2 by 2030, as called for in the Green New Deal, the reduction in temperature would be less than two-tenths of a degree by 2100."

“Yet these same politicians ignore the fact that America is a world leader in environmental protection,” he said. “We have reduced harmful air pollution 74 percent in the last 50 years and are the only large country to meet the World Health Organization standards for air quality.”

The ERCOT grid could be vulnerable because of these decisions.

“They are certainly threatening the reliability of ERCOT, and if more cities’ plans are actually implemented, there will be a big impact on grid reliability, especially from San Antonio and Austin, which have municipally owned utilities that can be forced to go 100 percent renewable,” Isaac said. “We already saw two emergency situations in August 2019, where demand on the ERCOT grid was close to exceeding supply and blackouts were narrowly avoided. This has happened due to the closure of several old coal and gas plants and their replacement with nothing but wind in recent years.”

He said the fact is, we can’t control nature.

“The wind is unpredictable and often doesn’t produce much on hot summer afternoons when demand is the highest,” Isaac said. “If more major cities close their old coal and gas plants in the next few years without replacing them with reliable power, this situation will likely become worse.”

Longtime Texas energy analyst Bill Peacock of Austin said betting on wind just might be a losing investment.

“Texas has plenty of electricity most of the year. The only time we need most of our generation capacity is hot summer afternoons,” Peacock said. “With our reserve margin hovering around 12 percent, it is easy to see the problem when wind is generating as much as 26 percent of our wind. On a really hot day, if the wind stops blowing, we could be in trouble.”

He thinks Texas has made a large enough investment in reliable generation going forward to keep the lights on.

“If we let the market work, it will. Unfortunately, subsidies for renewables and excessive regulations on the market have created a situation of uncertainty,” Peacock said. “Investment has declined so much that the PUC imposed a $4 billion electricity tax on consumers last year with the hopes that the money would convince generators to invest. So far, it hasn't worked.”

Many observers want to know what will happen to grid reliability when wind power grows in Texas.

“When wind holding about a 26 percent market share, we are already seeing problems with reliability. It is only going to get worse as wind’s market share grows,” Peacock said. “It will force the grid operator, ERCOT, to spend even more of our money to keep the lights on. But at some point, wind will run into physical limitations that can't be overcome, even with expensive batteries. When that happens, we'll start seeing rolling blackouts.”

The reality is, he said, alternative energy has not paid its way.

“If it were not for subsidies, we would have almost no wind or solar generation on the grid,” Peacock said. “It simply can't compete with natural gas, coal, or nuclear when it comes to price or reliability. The longer the subsidies keep going, the greater the risk of blackouts.”

Isaacs agrees with that assessment.

“If it were not for subsidies, we would have almost no wind or solar generation on the grid,” he said. “It simply can't compete with natural gas, coal, or nuclear when it comes to price or reliability. The longer the subsidies keep going, the greater the risk of blackouts.”

ERCOT Communications Manager Leslie Sopko said it is meeting the challenge of maintaining reliability despite the state’s growing reliance on wind.

“ERCOT has evolved its technical requirements and market rules, as well as developed new analytical and monitoring tools, to manage a diverse resource mix while maintaining system reliability and market efficiency,” she said. “The grid operator procures operational reserves called Ancillary Services to ensure reserve capacity is available to address variability that cannot be covered by the five-minute energy market. ERCOT continues to focus on evolving its Ancillary Services to ensure the grid operator remains efficient, technology-neutral and takes advantage of the capabilities of newer resources.”

Sopko declined to comment on why wind power was growing in popularity in Texas.

“I would recommend reaching out to the cities that you are interested in covering,” she said. “We work with transmission and generation owners, but we do not own the assets.”