ENB Pub Note: Doug Sheridan on LinkedIn writes a fantastic post about the Texas ERCOT need for speed and growth for new power plants. He also points out that wind and solar may not be the best solution. We are seeing that businesses really need to design their own behind-the-meter microgrids to protect themselves no matter where they are in the United States, but especially if you’re in the Data Center business.
Bloomberg writes, Texas needs to build power plants at an astonishing speed and scale to keep its economy humming. So many data centers, crypto-mining operations and factories are planned for the state that its peak electricity demand is poised to surge in the next five years perhaps even double.
The vast majority of new power capacity planned there would utilize the sun, the wind or batteries. But Trump’s One Big Beautiful Bill kills tax credits for renewable projects starting in 2028, making them more expensive to build.
“We’re in an energy crunch,” said Joshua Rhodes, an electricity expert and research scientist at the University of Texas at Austin. “We should be doubling down on everything we can build right now. Making things more expensive is antithetical to that.”
Our Take 1: Hey, Dr. Rhodes, in a normal world, the prospective massive increase in demand is what would induce the market to build, not the continuation of endless subsidies. This is America, not Soviet Russia.
Renewables are expected to continue growing across the US, despite Trump’s tax and spending bill. But the legislation will cut the amount installed. BloombergNEF forecasts annual deployment of new solar, wind and energy storage facilities in 2035 will be 23% lower than it would have been without the bill.
Oil and gas get most of the attention in the state, but green energy has been the Texas economic boom’s secret ingredient. All but 6% of new electric capacity added to the state’s grid since 2020 has come from renewables or batteries.
Our Take 2: Secret ingredient? C’mon. There’s no credible indication that absent the gorging at the public tough for certain land owners that came with installing inferior renewables development of dispatchable thermal generation wouldn’t have easily met the demand of recent years.
Our Take 3: Texas has put out the word that it will connect as many taxpayer-subsidized renewables projects as it can… as quickly as it can. The result has been that the state has too much of the wrong kind of intermittent generation that it doesn’t need, and not enough new gas-fired generation capable of running 24/7 that it does need. Cool, huh? Unfortunately, the economic well’s now too poisoned to easily fix the problem. Texas, it seems, is in a pickle of its own making.
Our Take 4: With its renewables-laden grid, Texas policy makers have effectively demonstrated that—given enough taxpayer money and political favoritism—dogs and cats can be taught to walk backwards. While novel, it’s hardly a better system than what it replaced. Pretending otherwise is the whole game here—both in Austin and in the media. But it’s all pretend. Don’t forget that.
Our Take 5: The truth is there’s no indication the Texas grid is better off today because it went all-in on renewables. But there are indications it’s hurting the state’s ability to meet growth. And that’s a very real problem.
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