Julian Spector, reporting for Canary Media:
Texas legislators have a new plan for their state’s famously competitive energy market, and it looks a lot like the government picking winners and losers.
On Wednesday, the Texas Senate passed SB 388, which would set a target for 50% of new power plant capacity to be “sourced from dispatchable generation other than battery energy storage.” An earlier version of the bill mandated that these plants “use natural gas.” Power plant owners and utilities that don’t invest their money according to this political directive would have to buy credits to comply with the new regulatory bureaucracy, raising the cost of doing business in the ERCOT energy markets.
If passed by the House and signed by Republican Gov. Greg Abbott, the bill effectively would penalize renewables and reward a subset of dispatchable generators that politicians in Austin favor. Such a policy would upend the competitive system that has ruled ERCOT for two decades, one that empowers investors to build whatever power plants they think the market will reward. This design has made Texas a favorite place to do business for power plant developers, and unleashed innovative technologies and business models that are held back in other states by utility monopolies and restrictive regulations.
SB 388 could be particularly impactful because Texas has established itself as the most dynamic clean energy market in the country. Renewables and battery developers have thrived thanks to the wide-open competitive energy market, abundant land, relatively easy permitting requirements, and the nation’s fastest timelines to interconnect projects to the grid. Texas is building more solar and battery capacity today than any other state, California included; on average, developers have connected about 1 gigawatt of new solar and batteries to the grid each month for the last year, noted Austin-based energy analyst Doug Lewin.
Conservatives talk a big game about how free market is the solution to all human perils, until renewables start kicking fossil fuel’s ass in one of the freest, most competitive energy markets. Suddenly, regulations that favour fossil fuels are no longer inefficient market distortions.
In a recent episode of Heatmap News’s Shift Key podcast, co-hosts Robinson Meyer and Jesse D. Jenkins aptly described it as “DEI for gas plants”. How ironic.
An Inconvenient Thought 