Texas public policy foundation
The Cautionary Tale of Wind Energy in ERCOT
 
RESEARCH
 

Recently, there has been a wave of cities (and companies) making pledges that they are “powered by 100% renewable energy.” Some states are getting in the game, too. Two years ago Hawaii pledged that its electricity would be entirely renewable by 2045. California's Governor Brown recently signed a bill setting the same goal, while moving up the state’s timeline to get half its electricity from renewables from 2030 to 2025. All of Colorado’s Democratic gubernatorial candidates have made a pledge for that state to be “100% renewable” by 2030.

Key Points

• The Texas electricity market and its experiment with wind offer a real-life, cautionary tale on the real effects of relying on renewable energy.

• When Texas needs electricity the most, wind proves most of the time to be a “no-show” while fossil fuels keep on powering the state.

• Large subsidies spread across Texan and American taxpayers hide the true cost of wind energy to ratepayers.

• Because renewable energy is essentially driven by subsidies, it is quickly destroying the competitive marketplace for energy in Texas by creating negative pricing, hence discouraging investment in new gas-fired capacity.

• ERCOT now predicts a reserve margin possibly dropping close to or below its preferred level, creating risks of increased price volatility and rolling outages and brownouts.

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