The market-driven transition to Texas-produced clean energy—Part 2

In part one of of this blog series, I discussed how market forces are transitioning Texas to a cleaner electric grid that relies on Texas-produced clean energy from wind, solar power, and natural gas. Due to Texas's abundant low-cost natural gas and the increasing amount of wind and solar power in the state, coal-fired power plants are under economic strain that may be too great to overcome, regardless of possible federal actions attempting to save the U.S. coal industry.

As I wrote, recent studies by The Brattle Group and Electric Reliability Council of Texas (ERCOT) studies have forecasted that due to these factors, some coal plants in ERCOT may shut down over the next few years. New wind, solar, and natural gas power will likely be added to replace coal plants that may retire and to meet additional electricity demand. 

As Texas continues this market-driven transition to clean energy, the reliability of the ERCOT grid is important. So TCEC asked the Brattle research team to investigate whether the ERCOT electric grid might suffer from power outages or blackouts during the next few years as older, dirtier coal plants retire and new cleaner power comes online.

The Brattle researchers concluded that coal plant retirements are unlikely to impact ERCOT's reliability. ERCOT already has a variety of tools it can use to ensure that our electric grid will stay reliable during this transition. 

One of the big advantages that Texas has during this transition to clean energy is that ERCOT is currently oversupplied with electric power. The Brattle team found that forecasted additions of even more electric power from natural gas, solar, and wind generation should provide an extra cushion to absorb many of the coal plant retirements that are expected in the next few years. 

For example, analyses by researchers at The Brattle Group and ERCOT have found that up to 13 GW of new solar capacity may be added by 2022. The Brattle team found that the Competitive Renewable Energy Zones (CREZ) transmission system, which brings wind and solar power from West Texas to cities along the Interstate 35 and Interstate 45 corridors, can carry up to 11 GW of new solar power.

On top of that, ERCOT's deregulated, energy-only electric market is designed to handle the changing power needs of Texas and has been successful at maintaining a reliable electric grid in the past. In an extreme scenario, such as a large number of coal plants retiring almost simultaneously, power could briefly become more scarce on the ERCOT grid. However, the Brattle researchers found that even that unlikely situation more than likely would not cause significant electric outages for customers. 

And, as an added failsafe, the US Department of Energy can order a power plant to keep generating to ensure grid stability under Section 202(c) of the Federal Power Act.

ERCOT rules require only three months' notice before a power plant shuts down, which is not long in the electric grid world. If several coal-fired power plants gave their three months' notice all at once, ERCOT could face some localized transmission issues near the closing plants. However, ERCOT has been able to handle past local transmission reliability problems, even when the electric generator gave the minimum 90-days' notice. 

ERCOT has a number of short- and long-term tools they can use to ensure that the electric grid stays reliable, even in localized "hot spots" near the site of retiring coal-fired power plants.

In the short term, ERCOT's first line of defense would be to ink an agreement with the coal plant owner to keep the plant running for a short time while other solutions are being implemented. This is called a Reliability Must Run (RMR) agreement. 

By using an RMR agreement to delay a plant's retirement, ERCOT can ensure grid reliability while they explore cheaper, effective options to maintain the supply of electricity, called Must-Run Alternatives (MRA).

Some common MRAs include finding short-term transmission solutions if the problem is localized; increasing demand response programs that incentivize electric customers to reduce their electric usage during periods of peak electric demand; using distributed generation that puts electric generation close to where it's needed, as with solar panels on rooftops or in a shared community solar array; and executing short-term contracts for new electric power.  

In the longer term, ERCOT's electric grid will likely be reinforced with a combination of new electric power from Texas-produced wind, solar, and natural gas; the increasing economic viability of electric storage technology; expanded demand response programs that allow customers to manage their electric usage; and upgrades in the network of electric transmission lines. 

The bottom line: the market-driven transition to a cleaner electric grid powered by Texas-produced wind, solar, and natural gas is well under way—and the ERCOT electric grid is ready to bring clean power to Texas consumers.

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Elizabeth Lippincott, J.D., is executive director of the Texas Clean Energy Coalition, which supports a clean energy economy in Texas based on diverse technologies including renewable energy, energy efficiency, and increased use of natural gas and other clean fuels. She has 25 years of experience at the intersection of law and public policy. Elizabeth holds a B.A. in Politics and American Studies from Princeton University and a J.D. with Honors from The University of Texas School of Law. For more information please visit TCEC's website at www.TexasCleanEnergy.org.

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Editor's note: This is Part 2 of a two-part series by Elizabeth Lippincott, executive director of the Texas Clean Energy Coalition. The views expressed by contributors to the Cynthia and George Mitchell Foundation's blogging initiative, "Can Texas's approach to sustainability inform a path forward for the U.S.?," are those of the author and do not necessarily represent the views of the foundation. The foundation works as an engine of change in both policy and practice, supporting high-impact projects at the nexus of environmental protection, social equity, and economic vibrancy. Follow the foundation on Facebook and Twitter, and sign up for regular updates from the foundation.

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