(Bloomberg) – Texas Governor Greg Abbott is pushing regulators to strengthen incentives for fossil fuel and nuclear power generators in an effort to prevent a repeat of the deadly blackouts seen this winter.
Abbott directed the Texas Public Utilities Commission to redesign parts of the power market to maintain and build more dispatchable supplies fueled by coal, natural gas and nuclear power, according to a letter Tuesday. Generators that cannot guarantee their availability, such as wind and solar, should bear the costs of failures, he said.
Without those costs, it creates “an uneven playing field between renewable and non-renewable energy generators,” Abbott said in the letter.
Texas is struggling to revamp its energy markets as the grid becomes increasingly strained by climate change. In February, an Arctic freeze paralyzed the state for nearly a week and left more than 100 dead amid catastrophic blackouts that left millions in the dark. This summer, the region faces the threat of more power outages as scorching heat increases the use of air conditioners.
But while other network operators, such as in California, are emphasizing batteries and other ways to support renewable energy sources, Abbott’s order appears to double the network maintenance of the past that relies on nuclear and fossil fuel plants more. large.
The PUC is already reflecting on some of the changes Abbott ordered, such as how to ensure adequate resources and stimulate transmission line development. The difference is that the governor appears to be focused on picking the winners rather than letting the market dictate those shifts across the mix of generations, though the language in their order leaves room for interpretation, said Josiah Neeley, Texas director at R Street Institute.
Texas had enough power generation capacity in February, but “the problem was that the capacity that we had could not be used due to the weather,” Neeley said.
“This approach of trying to pit fuel types against each other has nothing to do with the February event and is inconsistent with the basic configuration of the market, which is to deliver the necessary energy at the lowest price.”
Texas Avoids Radical Grid Changes After Deadly Freeze
Abbott said wind and solar should be costed for their reliability, but it’s unclear whether fossil fuel, coal and nuclear power operators would also have to bear the costs of their own plant failures. During the February freeze, natural gas was in short supply after pipelines and equipment froze and power outages forced production to slow down.
The governor also asked the PUC to order the state’s main grid operator to accelerate the construction of transmission lines tied to dispatchable resources, such as existing and new nuclear and fossil fuel plants.
In the letter, Abbott said the PUC should direct the state’s grid operator to establish a maintenance program for natural gas, coal, nuclear and other non-renewable electricity generators. The February crisis took generators by surprise, hitting at a time when many were down for maintenance.
© 2021 Bloomberg LP