New research from the Texas Public Policy Foundation reveals that 2021 Winter Storm Uri exposed predictable problems in the state’s electric grid. The paper, “Pushed to The Brink: The 2021 Electric Grid Crisis and How Texas Is Responding,” shows that after decades of overinvestment in unreliable renewable energy generation and underinvestment in reliability measures, the electric grid was strained beyond its ability to provide Texans with steady power supply.

“Over $60 billion in private investment, plus over $10 billion in subsidies, have flooded into new wind and solar generation in Texas over the past decade, and almost no investment is going into new dispatchable generation,” says TPPF’s Brent Bennett, Katie Tahuahua, and Mike Nasi, the paper’s authors. “Until this investment problem is corrected, the reliability of the ERCOT grid will continue to degrade.”

The research also covers the efforts of the Public Utility Commission and ERCOT over the past year to study and learn from what happened during the storm, as well as their near-term actions to strengthen the grid.

“[The PUC’s] work sessions and the results of the process are a clear statement that the PUC commissioners recognize, as stressed in this paper, the urgent need to address the growing resource adequacy problem in the ERCOT market,” the authors write.

However, the authors conclude, “Unless Texas changes the way the ERCOT market is structured to account for the reliability costs that wind and solar generators impose on the grid, more outages are going to be likely in the future.”

Key points

  • While the weather during Winter Storm Uri was unprecedented in recent Texas history, the problems experienced by the electric grid were predictable based on years of overinvestment in unreliable generation and underinvestment in reliability measures.
  • More than $60 billion in capital investment has flowed into wind and solar generation since the outages in 2011, and those generating resources produced less than 1 GW of power at the height of Winter Storm Uri on the night of February 16, 2021.
  • While weatherization and other measures to improve the winter availability of gas and coal generators are necessary, those measures are counterproductive if not done in concert with market reforms that properly compensate those generators for their greater availability relative to wind and solar generation
  • Any new measures the PUC takes to procure or incentivize more backup generation should be paid for by generators that are causing the need for the extra backup power. Requiring ratepayers to pay for those costs will fail to fix the imbalances in the market and lead to spiraling costs.

Read the full publication here.