The third and final installment in the energy horror trilogy may leave viewers feeling like they’ve seen this movie before. It’s repetitive and follows the same formula of its predecessors: bad policy, hidden agendas, rigid ideology, and demotion of science. But the formula keeps producing new versions of energy horror.
Environmental ideology trumping science and engineering in energy policy may not be shocking when it manifests in California or Boston. But surely, such shenanigans would never happen in the energy soul of our nation, Texas. Well, history taught us that energy stupidity is replicable and scalable.
It is well known that Texas has the largest wind capacity in the nation, at over 28,000 MWs. The popular rationale as to why Texas has such a massive wind fleet is that the state is windy and windmills are now economically competitive. The first part of the rationale is certainly true, but the second part is tricky.
It depends on how one defines competitive.
Head-to-head, wind generation at scale is not competitive with natural gas generation. The reasons are many, but perhaps the two biggest drivers are low cost and prolific supplies of natural gas coupled with the problem of the wind not always blowing when you need it to. The intermittent, unreliable nature of wind generation requires backup, redundant generation that is, ironically, typically carbon-based. That makes wind generation costly.
Yet Texas saw its wind capacity grow by over 100% in five years while its solar capacity grew by an astounding 2,000% in the same period. Over those five years natural gas generation capacity grew a paltry 3.5%. With Texas bureaucrats and regulators betting the ranch on wind and solar, they managed to achieve the absurd: growing generation capacity while simultaneously killing grid reliability.
So, what drove Texas to install such a massive wind and solar generation footprint? The answer: subsidy. Government, from federal down to state and local levels, year after year shoveled billions of dollars in various subsidies, tax credits, and protective market incentives to allow corporations, private equity firms, and utilities to feed at the taxpayer trough. The numbers speak for themselves: over $9 billion in federal subsidy for renewables in Texas since 2006, over $7 billion in state subsidy for renewables through boondoggles like Competitive Renewable Energy Zones, over $1 billion in local subsidy since 2006 for renewables through county and school district tax abatements.
Wind turbines were not constructed to save the planet. Windmills weren’t installed to increase grid resiliency. No, this massive investment was to simply maximize profit under a rigged system. Texas experienced the same racket that governments the world over are imposing upon the citizenry. Sadly, much of the subsidy via local tax abatements is shouldered by the poorer, rural regions of Texas so that the affluent elite in Austin and other big cities can virtue signal and enjoy subsidy.
Letting government dictate capital allocation instead of the free market also ensured investment was reduced in equipment weatherization, pipeline infrastructure, and carbon-based generation. Texas didn’t just bet its grid future by incentivizing the addition of unreliable wind generation. It also did so by encouraging foregoing investment in these other critical areas of the grid.
When the state grid went from one built on a portfolio designed for reliability, cost competitiveness, and resiliency to one designed for sucking subsidy, it would only be a matter of time before bad things happened. That time came this winter when a cold front moved over the Lone Star State.
When it gets cold, equipment runs into issues. Especially equipment that is not properly weatherized for the elements. Or windmills placed hundreds of miles away from urban demand centers and linked by an exposed, extended, and vulnerable transmission line. Cold weather also increases demand for energy. So, when the windmills stopped spinning due to the cold and the demand for energy kept growing, Texas suffered a Texas-sized blackout (solar never showed up when it counted, contributing zero to the grid during the crisis).
You will hear the disingenuous blame natural gas or deregulation as the culprits of this failure. That’s a desperate attempt to shroud the true root causes: climate ideology superseding grid science, poor policy instituted by government, subsidy driving malinvestment in place of the free market capital allocation, and irrational reliance on unreliable wind and solar.
Let’s hope Texans have become wise to the game. Fool Texas once, shame on the elite. Fool Texas twice, shame on Texans.
Rumors of a Fourth?
As frightening as this energy horror trilogy is, there are rumors that policy makers and environmentalists are planning a fourth installment. Although we don’t know yet where the location will be or the specifics, we do know the tried and true plot lines. Expect them to keep going to the grid until it goes dark.
Here’s to hoping you are able to keep the lights on tonight.