Texas has been experiencing an especially severe winter of late, punctuated by an intense storm. Since the state decided to switch over about a quarter of its total electricity production to wind, it has now learned a harsh lesson in the unreliability of so-called “renewable” energy.
Now that electricity production has collapsed and electricity has become incredibly scarce, the cost to charge a Tesla in Texas—normally about $18—has exploded to a whopping $900.
The Failure of Green Energy in Texas
Green energy sources that have been strongly favored by environmentalists and by the left generally—mainly solar and wind—have grown enormously in Texas lately. This is mainly thanks to some policies that give these energy sources unfair advantages over fossil fuels and give companies tax breaks and subsidies for investing in them.
As a result, Texas now has some of the largest wind farms in the nation, even though wind was a negligible energy source in the state only 10 to 15 years ago. Wind has largely replaced the role that was once occupied by coal, and the result has now proven disastrous.
Wind turbines across the state have been frozen and rendered useless by the cold weather. Therefore, a significant portion of the state’s wind energy is totally unusable, and millions of people are without power.
The Electric Reliability Council of Texas said, “We are dealing with higher-than-normal generation outages due to frozen wind turbines and limited natural gas supplies available to generating units.” This fact has caused the Council to initiate rolling blackouts across the state.
The Root of the Problem
The true root of this energy problem, however, lies in the utterly insane RTO auction policies that control energy sales and distribution not only in Texas but across the whole nation. An RTO, or Regional Transfer Organization, issues a projection for how much electricity the area under its jurisdiction will need for the next five minutes. It then holds an auction to supply electricity for those five minutes.
Power plants give bids to supply that demand until it is met. They each offer different rates. The RTO then decides to pay all of the plants involved in meeting demand during the auction the highest rate that is suggested by any of them. This ends up rewarding inefficient plants. It also jacks up electricity prices on consumers and actually encourages inefficient behavior.
Not only that, but the fact that the auctions occur every five minutes strongly disincentives power plants from planning for the future. A plant in Texas would normally buy extra oil or gas that it doesn’t immediately need, save it for the future and then burn it to generate more electricity when disasters happen like this cold snap. But under the RTO auction policies, it can’t do that. There’s effectively no market for oil or gas supplies over the next six months or the next year. Everything is broken into five-minute intervals.
Until this is ended, the energy grid—not only in Texas but everywhere in America—will be extremely vulnerable.