We Have the Power

Texas should focus on increasing natural gas generation and supply, not abandoning it.

By Matt Patterson, July 26, 2021

There is an abundance of natural gas in Texas. So much so that Texas leads the nation in natural gas production with around 23 percent of the nation’s reserves.[i] Furthermore, Texas produces more electricity than any other state, generating almost twice as much as Florida, the second-highest producing state.[ii]

After Winter Storm Uri in February 2021, there was much discussion centered around the state of electricity production in Texas, which generation sources failed during the storm, and what energy sources Texas should focus on moving forward. But in the conversation about protecting the grid and ensuring that there is enough power to supply an ever-growing population, we must look at the facts.

During Winter Storm Uri, power generation units of all types experienced outages. This includes natural gas, wind, solar, coal, thermal, and even nuclear generation. Texas lost significant natural gas production while demand increased. However, even with the outages and issues, natural gas production increased its percentage of the Texas power generation mix by more than 12 percent during the storm. An analysis conducted by Enverus, an energy data company, revealed that natural gas supplied more than 60 percent of electricity generation every day during the storm and supplied as much as 67 percent at the coldest moments.[iii] Renewable sources like wind and solar, which Texas has invested heavily in, performed poorly by comparison. The Electric Reliability Council of Texas (ERCOT) reported that although wind and solar account for a small share of the state’s overall energy production, they made up 40 percent of the capacity shut down by the storm.[iv] In other words, power generation failed across the board. But natural gas was the most reliable source of fuel during the storm.

Renewables can and should be viewed as a valuable component of Texas’s generation portfolio. Development of efficient, cost-effective sources of energy are always welcome to boost the nation’s largest energy producing state. But if Texas is serious about ensuring that the lights stay on during extreme weather events or other disasters, additional investment in natural gas production – and weatherizing generation units – should also be pursued. Writing in the New York Post, Kevin D. Williamson put it rather succinctly: “Gas-fired electricity plants are much cleaner than coal-fired plants, and they rely on a fuel that we have in abundance. We should be adding gas-fired generating capacity on a large scale.”[v]

Several bills passed in the 87th Legislative Session to protect natural gas facilities as “critical infrastructure”. House Bill 3648 (Geren) requires the Railroad Commission (RRC) and the Public Utilities Commission (PUC) to work together to designate gas entities and facilities as critical infrastructure during an emergency. Additionally, on July 6, 2021, Governor Abbott gave several directives to the PUC to improve electric reliability. The governor directed PUC to take action that would require renewable energy companies to cover the costs of purchasing reserve power when wind and solar are unable to provide power to the grid. Governor Abbott also expressed an interest in incentivizing companies to build and maintain nuclear, natural gas, and coal power generation and to better schedule when power plants go offline for maintenance.[vi]

Even with these directives, however, ensuring that the grid has adequate capacity to meet Texas’ growing demand is critical. ERCOT states that the forecasted peak demand for summer 2022 is 78,855 MW, and that demand is expected to grow at a rate of around 1 percent through 2025. To meet these demands, ERCOT expects to have a planned resource capacity in the summer of 2022 of 16,513 MW, with utility-scale solar generation representing 74 percent of that total.[vii] This is what ERCOT expects to be available on an average basis during peak demand hours.[viii] Meanwhile, natural gas generation accounts for only eight percent of planned summer 2022 resource capacity. This means that of the reserve resources available to cover future demand, nearly two-thirds of that reserve power are expected to come from solar generation. While solar capacity has certain clear benefits for the electric grid, relying so heavily on renewable forms of energy to the detriment of proven and consistent resources like natural gas is concerning.

In the coming weeks TCCRI will continue to explore Texas’s electricity market, discussing solutions and shortcomings alike. But if Texas is seeking energy reliability, one thing is clear: Relying on proven resources that the state has in abundance, like natural gas, to power new generation capacity is prudent.

[i] https://stateimpact.npr.org/texas/tag/natural-gas-production-in-texas/ [ii] https://www.eia.gov/state/print.php?sid=TX [iii] https://docs.txoga.org/files/2646-winter-storm-uri-natural-gas-analysis-one-pager.pdf [iv] https://nypost.com/2021/02/20/texas-reliance-on-renewable-energy-has-led-to-this-winter-mess/ [v] Ibid. [vi] https://www.texastribune.org/2021/07/06/texas-electricity-grid-greg-abbott/ [vii] http://www.ercot.com/content/wcm/lists/219841/CapacityDemandandReservesReport_May2021.pdf [viii] http://www.ercot.com/gridinfo/resource