As Texas shifts toward solar and battery storage for electricity generation, Republican state senators are considering imposing standards for gas plant construction and revising the state’s electricity market. The Electric Reliability Council of Texas (ERCOT), the state’s grid operator, reported that 70% of the 460-gigawatt interconnection queue is from solar and battery storage, while natural gas facilities account for less than 17%.
State Sen. Phil King of Weatherford questioned ERCOT and the Public Utility Commission of Texas (PUC) at a hearing about setting quotas for fossil fuels in new grid connections. He suggested a requirement for a percentage of new generation to be dispatchable, referring to gas plants’ ability to ramp up or down on demand.
ERCOT CEO Pablo Vegas noted that such a policy change would be significant. He and PUC Chairman Thomas Gleeson emphasized the need for long-term incentives for gas projects. Unlike other systems, ERCOT pays power plants for energy delivered, not just capacity. With solar and wind having zero fuel costs, they are favored in the market.
Vegas explained that current market design dispatches the lowest cost resources first, affecting gas plant operation hours. Even without new renewable projects, Texas maintains the largest renewables fleet in the U.S. For gas and coal plant growth, ERCOT and the PUC need to ensure profitability for these facilities to cover investment costs.
The proposed increase in gas plants is partly due to data centers and other energy-intensive industries building their own capacity. However, over 90% of new resources are renewables and batteries. As electricity demand grows, scarcity events could increase.
On July 22, when demand exceeded 91 gigawatts, there was over 20 gigawatts of available capacity. ERCOT managed record-breaking demand due to renewables, but future reliance on them could strain fossil fuels, which fulfill demand once solar is unavailable.
Bill Barnes, senior director of regulatory affairs at NRG Energy, highlighted ERCOT’s market challenges. The market suggests oversupply, yet with more grid connections, this could change in three years. Barnes described a “dance” in managing summer demands with solar and batteries, raising the question of long-term resource adequacy.
Sen. King sees a pause in renewables as beneficial while gas plant capacity catches up. The oil and gas sector remains a significant economic contributor, benefiting from increased gas plant construction.
Katie Coleman, representing industry associations, noted that the state’s deregulated market has favored reliability and cost outcomes. However, some express discomfort with market forces, preferring more control.
Sen. Lois Kolkhorst highlighted renewables’ growth, attributing it to tax credits. She advocated leveraging Texas’ gas resources. Legislators have proposed limiting renewable expansion, facing opposition from the oil and gas sector, which uses renewables for cost-efficient operations.
Original Story at insideclimatenews.org