Texas Republicans are getting closer than ever to killing the state性视界传媒檚 renewable energy boom, according to the clean energy industry 性视界传媒 not only by halting new development in its tracks, but also by possibly sending scores of existing projects to an early grave.
Many in the Texas electric power industry were focused on two companion bills, House Bill 3356 and Senate Bill 715, as the Senate version was approved this past week.
The bills would require nearly every solar and wind farm in the state to back up their electricity output with natural gas power plants or a fleet of batteries.
If an existing renewable project doesn性视界传媒檛 have backup power so it can supply electricity when the sun isn性视界传媒檛 shining or the wind isn性视界传媒檛 blowing, its owner would have to pay a steep fine 性视界传媒 or stop operating the project completely.
Such a requirement could be so cost-prohibitive that thousands of megawatts of existing renewable energy projects in Texas might shut down, and companies wanting to develop new ones would go elsewhere, industry leaders say.
性视界传媒淚 cannot recall legislation as damaging to our industry and to the energy market as House Bill 3356 and Senate Bill 715 being considered in both chambers this late in session,性视界传媒 said Mark Stover, executive director of Texas Solar and Storage Association, a trade group.
The reduction in electricity supply would come just as Texas needs more electricity than ever before. Such an imbalance could raise the risk of rotating outages across the state性视界传媒檚 main power grid, energy researchers and consultants warned.
性视界传媒(Electricity) prices would skyrocket. Our grid would become less reliable. Our economic growth would be choked off,性视界传媒 said Doug Lewin, president of Stoic Energy Consulting, who made a video arguing the two bills could 性视界传媒渂reak the Texas grid.性视界传媒
State Rep. Jared Patterson, R-Frisco, author of HB3356, said his goal is to 性视界传媒渓evel the playing field性视界传媒 against 性视界传媒渉ighly subsidized renewable energy性视界传媒 so more natural gas power plants can be built in Texas.
性视界传媒淒o Texans deserve to have power when they need it? Yes, of course they do. But it can性视界传媒檛 happen if we rely too heavily on resources that are on and off with the whims of Mother Nature,性视界传媒 Patterson said during a House committee hearing on his bill last month.
Yet, even companies that build natural gas power plants 性视界传媒 the sector lawmakers say they性视界传媒檙e trying to help 性视界传媒 aren性视界传媒檛 eager to see the bills passed into law.
Changing the rules
The idea of backing up the electricity output of renewable energy resources is not new. In fact, a requirement to do so became law in 2023 性视界传媒 but only for wind and solar farms connected to the Texas power grid after 2027.
The future effective date was a heavily-negotiated compromise, in line with other proposals to regulate future renewable energy projects, not those that already exist.
Now, the 2023 compromise could be trashed. This concerns the Texas Association of Manufacturers because the proposed House regulations would affect existing renewable energy agreements, said Katie Coleman, an attorney representing the influential trade group.
If the two bills became law, owners of existing renewable projects would try to pass on their costs of securing backup power or paying fines to Texas manufacturers, Coleman said. Higher electricity bills could then force manufacturers into a tough spot.
性视界传媒淚t性视界传媒檚 essentially either going to affect pricing that goes into a product that (manufacturers are) making, or they性视界传媒檙e going to make less of that product, or operate elsewhere, or have to go get an alternative power supply,性视界传媒 Coleman said.
Less power, higher energy bills
Renewable energy companies that can性视界传媒檛 pass costs onto their customers might shut down projects instead.
In fact, 15% of the existing wind fleet in Texas could shutter, according to a recent analysis of HB3356 and SB715 from the consulting firm Aurora Energy Research.
The two bills exempt natural gas and coal-fired power plants. In other words, if fossil fuel power plants aren性视界传媒檛 reliable enough per a certain standard, they wouldn性视界传媒檛 have to acquire backup power like their renewable energy counterparts.
However, 性视界传媒渢he retroactive nature of the bills is something that could send a chilling market signal to anybody wanting to do a long-term investment in Texas,性视界传媒 said Walt Baum, CEO of Powering Texans, a trade association representing the largest companies developing gas-fired power plants in the state.
性视界传媒淚t raises a lot of unknowns. No one has really thought through exactly how this is going to work, which is why I don性视界传媒檛 think you性视界传媒檝e seen the thermal generation community rush to support this concept right now,性视界传媒 he said.
The potential loss of existing solar and wind farms, plus a slowdown in building new power plants of all types, would reduce the Texas power grid性视界传媒檚 available supply.
Everyday consumers would see higher electricity bills as a result, according to Olivier Beaufils, a head researcher at Aurora Energy Research.
性视界传媒淚t性视界传媒檚 basic economics. If there性视界传媒檚 less supply, prices are going to get higher,性视界传媒 he said.
性视界传媒楬idden性视界传媒 renewable costs
Still, legislators who support SB715 and HB3356 say the regulations are needed because they say wind and solar farms drive up electricity costs and are unreliable resources.
To that point, both Patterson and Sen. Kevin Sparks, R-Midland, have repeatedly cited a February study from the Texas Public Policy Foundation, an influential Austin think tank involved in Project 2025, as the basis for their bills.
Brent Bennett, TPPF性视界传媒檚 energy policy director, authored the study, which estimated that variability in wind and solar production added $2.3 billion in electricity costs in 2023.
Wind and solar are often cited as cheap energy resources, because they have little fuel or operating costs. But Bennett argued that the 性视界传媒渉idden性视界传媒 costs of wind and solar show up in the higher electricity costs that owners of natural gas and coal-fired power plants have to charge to breakeven.
That性视界传媒檚 because fossil fuel resources are not only used less often, but also have to turn on and off more frequently, which is inefficient, Bennett said. Yet, these plants are still needed on the Texas power grid to supply electricity when renewable energy resources are limited, so consumers are forced to bear those higher costs, he said.
So, the purpose of HB3356 and SB715 is twofold: to create a market signal valuing such reliability, and to allocate the 性视界传媒渉idden性视界传媒 market costs to the renewable resources responsible for them, Bennett said.
If the bills result in less solar and wind on the Texas power grid, that性视界传媒檚 fine, he said.
性视界传媒淲e think it性视界传媒檇 be better if we stopped building wind and solar and built more combined-cycle gas,性视界传媒 Bennett said.
Working in concert
Critics of HB3356 and SB715, however, say the bills reflect a lack of understanding about how all resources on the Texas power grid work together to keep the lights on.
Pablo Vegas, CEO of the Electric Reliability Council of Texas, the organization operating the state性视界传媒檚 primary power grid, told reporters in Austin on Tuesday that the intention behind the two bills 性视界传媒 to help fossil fuel power plants make enough money to survive in the market 性视界传媒 is good.
But efforts that incentivize more gas-fired generation by cutting down on renewable energy are concerning, as ERCOT will need all resources to meet an unprecedented growth in electricity demand in the next five years, Vegas said. That性视界传媒檚 especially true as gas-fired power plants face challenges in the short-term, such as gas turbine shortages.
性视界传媒淐haracterizing renewables as a problem, I don性视界传媒檛 think it性视界传媒檚 helpful to the conversation. I don性视界传媒檛 think it性视界传媒檚 accurate. What we really need is a portfolio that can actually deliver on the resource requirements ahead of us,性视界传媒 he said.
The bills neglect to consider that all resources have their strengths and weaknesses, and all resources fail, said Joshua Rhodes, a research scientist at the University of Texas at Austin specializing in the power grid.
Though not inherently dependent on weather conditions like wind and solar, fossil fuel power plants can suffer high levels of unplanned failures in extreme heat or cold. Fossil fuel power plants are also vulnerable to fuel shortages, as what happened during the 2021 freeze.
Fossil fuel power plants are critical in supplying the power grid during sunset, sunrise and on windless days. But solar can carry the grid through hot summer afternoons and mild sunny days, allowing natural gas and coal-fired power plant owners to perform necessary maintenance.
性视界传媒淚t性视界传媒檚 like expecting a trumpet to play a drum line 性视界传媒 it性视界传媒檚 just not going to work. It性视界传媒檚 not the right tool. But if you put all the tools together, then you can get an orchestra,性视界传媒 Rhodes said.
In that analogy, ERCOT would be the conductor. After all, ERCOT性视界传媒檚 job is to balance the mix of power plants supplying electricity to the grid at any given moment, Lewin and Beaufils said. So, having enough backup power is an issue for ERCOT judge on a system-wide basis, not a problem to fix power plant by power plant, they said.
Watching closely
Drew Darby, R-San Angelo, was one of two Republicans who voted against HB3356 when it was still in committee.
In an April committee hearing, he said the bill could jeopardize eight gigawatts of solar and wind projects planned for his West Texas district that could help inject tax revenue into school districts, volunteer fire departments and other public services.
性视界传媒淲e should be working to protect prosperity in rural Texas, not undercut it. This is a solution in search of a problem that rural Texas quite frankly can性视界传媒檛 afford,性视界传媒 Darby said.
The House bill narrowly passed the committee, shocking renewable energy insiders who性视界传媒檇 come to expect proposals they didn性视界传媒檛 like to die in the House. Now, renewable energy companies anxiously wait to see if the House bill will be voted on by the full chamber 性视界传媒 and how much of their industry survives come June, when state lawmakers adjourn until 2027.
Meanwhile, temperatures will soon start to climb as everyday Texans wonder whether the state power grid holds up through another hot summer.
ERCOT性视界传媒檚 Vegas said he性视界传媒檚 confident the lights will stay on 性视界传媒 and he credited the most hot-button resources of the moment for that assurance.
性视界传媒淲e性视界传媒檙e really continuing to see the benefit of increased resources from the solar and battery perspective. That made a very significant difference in last summer. I think that we性视界传媒檒l see the benefit of that this summer,性视界传媒 he said.