EnergyCalifornia Blackouts Highlight Contrast with Texas Energy, Provide Forewarning

Last summer, Texans nearly experienced similar rolling blackouts to what Californians faced just a few weeks ago.
September 7, 2020
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Driving north from San Antonio to Austin on I-35, a billboard towers over passing traffic broadcasting a simple message: “Don’t California our Texas.” In California’s recent rolling energy grid blackouts, Texans might recognize a warning for its own power supply.

Californians faced rolling blackouts in mid- to late-August as the summer’s heat sweltered, leading to unsustainable electricity usage. Its energy grid is primarily powered by a mix of 35 percent natural gas and 31 percent renewables, like wind, solar, and geothermal sources.

Democratic politicians in California have mandated that 60 percent of the state’s grid be made up of energy generated by renewables by 2030. Similarly-aligned but more vague proposals have been made at the national level including by Democratic presidential nominee, Joe Biden.

The unreliability of the state’s renewables spurred the dearth in supply and was made worse by surrounding states from which California imports ancillary power also experiencing high demand.

This perfect storm was compounded by the state’s concerted effort to shutter natural gas and nuclear plants which can provide power on demand, especially for emergency situations.

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California is even on course to close its last nuclear plant, Diablo Canyon, by 2026, which generates 10 percent of the its in-state electricity generation. When imports are accounted for, Diablo Canyon makes up 6.4 percent of the state’s grid.

Kenny Stein, policy director with the Institute for Energy Research, told The Texan, “Not only did this ideological fixation on wind and solar and against natural gas and nuclear create this emergency, but so did the poor administrative planning for such an emergency.”

Becoming heavily reliant on wind and solar, Stein emphasized, is incredibly expensive as two to three times the infrastructure must be constructed in order to generate a proportional amount of power as traditional sources.

But in California, Stein added, “the grid they want, they cannot achieve without passing the cost onto consumers, as opposed to the heavy subsidization they provide now.”

Texas has a minimum renewable grid-makeup requirement but does not subsidize its wind and solar producers to the degree that California does. Despite that, renewable producers in Texas still have benefited from an estimated $19.6 billion in subsidies since 2006. California has 212 different renewable energy subsidies or tax incentives on the books.

California found itself in an alarming situation during peak hours — typically the early evening as commercial and industrial sites are still operating but residential use picks up, and solar becomes more non-existent as the sun sets — of their supply failing to meet demand.

Texas, meanwhile, experienced a similar emergency last summer, again because electricity use skyrocketed as Texans retreated indoors to escape the blistering heat.

The Electric Reliability Council of Texas (ERCOT), the nation’s largest non-capacity energy market in which producers are paid by consumers based on their usage, rather than paid upfront for a contractually set amount of production, warned of possible blackouts last summer, but ultimately avoided them.

That close call was caused by a deficiency in the projected wind and solar production and a fossil fuel-powered energy plant malfunction.

Contrasting with the West Coast giant, Stein stated, “In Texas, the state regulator makes an effort to incentivize extra capacity.”

One example of this was cogeneration, in which industrial sites that have their own generation were paid to funnel some of that electricity back into the state grid, inflating the cushion against a shortage.

Whereas, California must rely on discouraging electricity use.

Stein also pointed to the use of nonrenewable sources. “Texas isn’t prejudiced against natural gas and nuclear.”

“It’s very important that Texas is cautious about becoming too reliant on renewables and the intermittency risk which accompanies them — and where they are used, there must be a way that wind and solar compensates for the intermittency,” he concluded.

One example is requiring wind to have backup sources on-site in case their generation is halted or cannot meet its share of the demand.

Jeff Clark — CEO of the Advanced Power Alliance, an organization which advocates usage of renewables and natural gas — juxtaposed the two states, telling The Texan, “Texas is an energy state, and Texas knows how to make energy delivery and energy markets work efficiently for the benefit of consumers, including our important state industrial consumers. A key has always been infrastructure.”

“We’ve made visionary commitments in power transmission that have enabled our growing state, with growing power demands to embrace and use all of the energy resources found in all corners of the state,” he added. 

This year, ERCOT projected record energy usage for the summer — due to both the heat and COVID-19 keeping more people indoors. To accommodate for this, ERCOT increased its reserve margins to 12.6 percent from the previously slotted 10.6 percent.

Bolstering that increase are seven new generation projects which began operation earlier this year, adding 979 megawatts (MW) to the grid. One megawatt of energy can power the average home for 1.2 months.

Renewables make up nearly a quarter of the total output of Texas’ energy grid, while natural gas accounts for over half of the electricity generation. A big reason California bolstered its renewable grid share at the expense of natural gas was to eliminate emissions.

Texas far outpaces California on total carbon dioxide emissions — producing 13 percent of the U.S.’s emissions and 22 percent of its energy, compared with California’s 3 percent in generation and 7 percent in emissions.

And while renewables share of California’s grid is higher than Texas’, our state generates about 3,000 MWh more electricity from its renewables. That’s enough to power nearly 2 million more homes at any given time.

About Texas’ transition away from coal and toward natural gas and increased renewable energy, Clark said it has “enabled a hybrid, market-driven system that encourages all participants to bring their best product and their best prices to the market.”

“By continuing to build the infrastructure our energy industries need to compete and to deliver essential power to a growing economy, Texas will stay at the forefront with cleaner, cheaper electricity made using the energy resources with which we’ve been richly blessed. California could unlock it’s potential by investing in markets and transmission, and we’re here to help as an example,” Clark concluded.

California and Texas are both high-population, high-usage states. However, being an energy hub positions Texas much better to avoid the supply woes that have roiled the Golden State.

As California’s officials undermine their state’s own ability to provide electricity to its citizens, Texas’ leaders have embraced a more market-based approach. But some see the California episode as a forewarning containing the same message as that billboard towering over I-35.

Editor’s Note: A clarifying statement has been added to further contextualize the impact of the impending elimination of the Diablo Canyon plant would have on California’s total energy production.

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Brad Johnson

Brad Johnson

Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad watching and quoting Monty Python productions.