Free Markets, Infrastructure Give Texas Cleaner Power Grid

Monday, June 03, 2019

Jeff Clark and Steve Everley | Midland Report-Telegram | June 3, 2019

For many years, policymakers in Washington have struggled to manufacture a workable policy that addresses the serious challenges we face from our changing climate without raising Americans’ energy bills. They could learn a few things from Texas.

The Lone Star State has demonstrated how to increase production of affordable and reliable power by embracing markets, technology, infrastructure development, and all of its energy resources.

In 1999, Texas deregulated much of its power grid. Since then, clean energy has taken off.

Since deregulation, wind power output in Texas has grown more than 1,600 percent, and today provides nearly 20 percent of our state’s generation capacity. Texas is not only the largest wind producing state; if it were its own country, it would be the fourth largest producer in the world.

Texas is also known for natural gas production, and we are the largest natural gas consuming state as well. Since 2002, Texas power generators have increased their use of natural gas by approximately 30 percent, and today the fuel accounts for half of our total generation capacity.

The simultaneous growth of wind and natural gas was no accident. In 2017, researchers from the National Bureau of Economic Research concluded that renewables and natural gas are “highly complementary,” and they “should be jointly installed to meet the goals of cutting emissions and ensuring a stable supply.”

That’s exactly what has happened in Texas.

Our residential electricity rates are lower than the national average. The Baker Institute at Rice University found that since deregulation, average power prices declined in all competitive markets in the state. These savings can be attributed to the shale gas revolution and the growth of renewable energy that occurred over roughly the same period.

Wind and natural gas helped Texas slash energy prices, and at the same time, they have cut air pollution. Over the same period covered by the Baker Institute report, per capita energy-related carbon dioxide emissions in Texas declined by 27 percent. Nitrogen oxide emissions declined by 26 percent, and sulfur dioxide emissions declined by nearly 60 percent.

But is the electricity grid any less reliable? No. According to a study from the U.S. Department of Energy, the increased use of renewable energy is not a threat to grid reliability. Statements from the Electric Reliability Council of Texas (ERCOT), the Texas Reliability Entity, and the ERCOT Independent Market Monitor are in agreement with the study. The bigger threat is inadequate infrastructure, which is where Texas has also been ahead of the curve.

Texas has the country’s most extensive pipeline network, with 466,000 miles of pipeline crisscrossing the state. We understand infrastructure’s role in facilitating energy development, including the shale energy revolution. Amid the current energy boom, we’re seeing a wave of new pipeline projects come online, and for good reason: if we want reliable energy, we need the infrastructure to bring it to market.

But it’s not just pipelines. Texans recognized nearly two decades ago there was massive potential for wind energy in West Texas and the Panhandle. Governors George W. Bush and Rick Perry both championed the installation of transmission lines to connect our large cities to these areas that were ripe for renewable energy development, which became known as Competitive Renewable Energy Zones (CREZ).

The U.S. Department of Energy’s aforementioned grid study highlighted the success story of the Texas CREZ projects, holding them out as “an example of an approach to quickly develop generation and transmission” to expand access to clean energy.

ERCOT has observed that the CREZ infrastructure investments “combined economic development, development of in-state energy resources, and development of green energy.” ERCOT also cited the “large fleet of flexible natural gas” that has helped integrate increasing amounts of wind energy into the Texas grid, reinforcing the symbiotic relationship between these two clean energy options. CREZ has helped to power the Permian Basin, and this Texas infrastructure has helped to meet the power needs of our growing state.

There is a policy current running through the Legislature in 2019 that would harm the ability of Texas to continue to push forward on the successful vision laid out by Republican leaders in 1999 and during subsequent sessions. That would be most unfortunate.

Jeff Clark is president of the Advanced Power Alliance in Austin, and Steve Everley is spokesman for Texans for Natural Gas in Houston.