At the same time, ERCOT faces a challenging capacity crunch caused largely by “low natural gas prices, an influx of low marginal cost wind power, increased wholesale market efficiencies, low wholesale power prices, tight credit markets” and other issues according to TXU Energy.  With limited ability to invest new capital given the current market conditions, and over 11,000 MW of power dependent on water sources at historically low levels, Texas needs to tap into resources that can be deployed rapidly and require less capital and much less water.

Demand Response – Low Cost, Zero Water Resource
Fortunately Texas has ample resources to meet these needs with demand response.  If allowed to participate fully in Texas’ energy markets as it does in other regions, demand response can benefit customers and increase grid reliability.  Unfortunately Texas continues to lag behind other states and regions, which have seen market-competitive demand response grow rapidly as market barriers have been removed. 

• The definition of “demand response” is “end-use customers reducing their use of electricity in response to power grid needs or economic signals from a competitive wholesale market.”
• The potential for cost competitive demand response is tremendous – according to the Federal Energy Regulatory Commission (FERC) Texas could add as much as 19 GW in capacity by 2019 if we open up our electric market to allow customers to compete alongside generators.

Texas currently is among the lowest states in terms of load management, despite having the highest potential by far according to FERC and the Brattle Group. 

Source: FERC

Why Does Texas Lag the Nation in Demand Response?

• In 2011, demand response amounted to 9% of the PJM’s (a grid operator in the Mid-Atlantic/Midwest) system peak demand, greatly benefitting customers and improving reliability. 
• At ERCOT, despite great potential, demand response only amounted to just over 2% of peak demand, limited by unnecessary market barriers. 
• Texas leads the nation in smart meter deployment, intended by the legislature to “facilitate demand response initiatives.”  Why is ERCOT so far behind?

Market Barriers Prevent Customers from Competing in ERCOT

• ERCOT’s legacy demand response program is capped at 1150 MW and is effectively limited to large industrials within ancillary services markets.
• ERCOT’s Emergency Reliability Service is the only program in the market that allows any customer to participate if they qualify.  The program is limited in scope (it can only be called on twice per year) and to date has been unable to reach the original goal of 500 MW.  Despite these limitations, the program helped avoid rolling blackouts last summer.

Source: NERC

Regulators are Focused on Building New Power Plants

• Instead of looking to all possible solutions, regulators seem focused only on how to get new power plants built.
• Other grid operators have successfully created programs for smaller commercial and residential customers to compete through aggregation.  In Texas, residential and small commercial customers have been put on the back burner.
• Despite the PUC’s reluctance to act on other clean energy opportunities, such as the 500 MW non-wind RPS or increasing the energy efficiency standards, it is clear that these programs have been successful in creating clean, “water-proof” power.
• In the midst of a capacity crunch caused by extreme drought and market structure problems, demand response provides an opportunity to address both by enabling cheaper, water-free capacity by simply opening markets to customers.

This commentary was originally posted on the EDF Texas Clean Air Matters Blog.

It seems like only yesterday that ERCOT was issuing dire warnings of rolling blackouts as a direct result of regulations required by the court system to ensure cleaner, healthy air for Texans and our neighboring states.  Well, maybe not yesterday, but at least as recently as this month.  Buried deep within the report was ERCOT’s tacit acknowledgement that they have allowed companies to idle more than 1,000 MW of power plants because those plants are not economic in today’s hyper-competitive market.

Source: Texas Tribune

Of course, no announcement made as much news as Luminant’s claim that they were shutting down two of their Monticello lignite power plant units in response to EPA regulations.  Those claims have been pretty well debunked over the last few months as people began to realize that market economics and poor planning were responsible for Luminant’s decision.  As we discussed in September, it was as convenient for Luminant to blame the EPA as it was reflexive of Texas politicians and regulators to threaten rolling blackouts as a result of Luminant’s decision.  ERCOT’s decision to let other power plants shut down for economic reasons calls those claims into serious question, and their recent decision (password required) that idling the Monticello units at the heart of this debate  does not threaten system reliability will hopefully end this cycle of unfounded recrimination and backtracking.

As ERCOT has made clear, the real threats to system reliability are of our own making: market failures have lead to a lack of proper signals to encourage the building of new power capacity; and this year’s record breaking drought, made more extreme by climate change, has threatened to shut down more than 11,000 MW of power plants.  What all of this means is that ERCOT’s reliability issues are far more complicated than a political slogan, and getting rid of sensible regulations that protect our children, elderly and general population from real health risks will do nothing to solve our problems. 

Instead of focusing on the easy political score, our leaders should be looking for real solutions that don’t pose risks to human health or to our water supply.  The solutions are out there: dry-cooled power plants, energy efficiency programs like demand response, as well as wind, solar and other non-water consuming renewable energy. 

The most recent decision by ERCOT that idling Luminant’s power plants poses no threat to grid reliability should end the cycle of unfounded accusations for political gain.  It should focus our state leadership on solutions that will work instead of distractions that only delay solving the problem.  It should also serve as a signal to those who are all too ready to accept unfounded claims for the sake of a good story or a convenient target. When it comes to ERCOT and reliability, the issues are complicated, but the solutions are out there and it will take real focus and effort to prevent Texas from experiencing the same rolling blackouts we had last winter.  It’s winter again (even if it’s just barely starting to feel like it), and next summer looks to be another scorcher. We don’t have a lot of time, so let’s get to work.

Grover Norquist asks us to “rethink” renewable energy, and I think he may be right.  But we differ on the best way to do that.

He seems to think that Renewable Portfolio Standards (RPS) and similar policies that level the playing field and create markets for renewable energy are “unfeasible,” as opposed to the current subsidies and rules that heavily favor fossil fuels.  In his op-ed, Norquist manages to wax poetic about free markets while dodging the billions of dollars in subsidies for fossil fuels and numerous impartial analyses that illustrate how renewable energy saves money for customers and adds much needed revenue to state budgets.

Obscuring the Facts
A recent analysis found that the five states with the highest amount of renewable energy (states that are encouraged by the policies Norquist asks us to rethink) have lower electric rates than the states with the least amounts of renewable energy.  In 2009 the Texas PUC declared that the state’s national leadership in wind energy, driven by their RPS, “has had the impact of lowering wholesale and retail prices of electricity."  The Texas State Comptroller said, “After the RPS was implemented, Texas wind corporations and utilities invested $1 billion in wind power, creating jobs, adding to the Texas Permanent School Fund and increasing the rural tax base.”

The story is similar in Colorado where, according to the American Wind Energy Association, the state’s RPS supported a total of 5,000-6,000 direct and indirect jobs, generating $7 million in state revenue and $4 million in leasing revenue for landowners who benefit from the policy.  Still, Norquist chooses to focus on a report – not yet released at the time of this writing – by the Beacon Hill Institute, a conservative group founded by Republican politician Ray Shamie, to support some rather speculative claims.  

“Choose Your Own Free Market”
Much like the old “Choose Your Own Adventure” children’s books, the fossil fuel industry would very much like to choose their own free market, one that gives fossil fuels an unfair advantage over all other resources.  Leaving the discussion there would simply perpetuate the junk science cycle that benefits the fossil fuel industry and their attempts to distract from the massive amounts of federal subsidies that these companies claim they need to continue operations.  A discussion on their terms would ignore the very real health impacts fossil fuel use has on infants, pregnant women, the elderly and the general population.   

Source: Reddit

Fossil fuel use directly impacts human health and we subsidize fossil fuels heavily through increasing health care costs and other expenses. A recent report from Harvard Medical School found that these unwitting subsidies cost us $345 billion annually in emergency room visits, health impacts, loss of life and loss of tourism income among other impacts.  A true free market is one in which industry takes responsibility for the costs it imposes on society.  In this sense, the fossil fuels industry has failed miserably.

Growing Faster Than the Rest of the Economy
While fossil fuels have increasingly clear health costs, the ways in which clean energy production helps the U.S. economy are becoming clearer as well.  According to a study from the non-partisan Brookings Institute, renewable energy jobs – and clean tech jobs in general – have grown at a much faster pace than the rest of the U.S. economy, driven largely by state policies like the RPS (the only exception being hydropower).  Solar jobs alone have doubled in the U.S. to 100,000 since 2009; many of these local installation and service jobs cannot be exported.  Last year alone, U.S. solar energy installations created a combined $6 billion in direct value, $4 billion of which was accrued to the U.S.  Furthermore, Jackie Roberts, Director of Sustainable Technologies at EDF, recently wrote that the U.S. was a significant net exporter of solar energy products when the entire value chain is accounted for, with total net exports of $2 billion in 2010.

A Non-Partisan Issue
Perhaps it’s wishful thinking on Norquist’s part, but he certainly knows about renewable energy’s long history as a non-partisan issue – one where nationally recognized conservative Republicans like Texas Gov. Rick Perry and Kansas Gov. Sam Brownback have publicly supported the same policies that Norquist decries.  Polls across the country show strong voter support for renewable energy, reaching across political ideology and party lines.  In fact, the most recent Republican President and the previous Governor of Texas created the most successful Renewable Portfolio Standard in the country and reportedly consider it one of their proudest achievements in Texas.  Speaking in Dallas last year at the American Wind Energy Association’s annual conference, former President Bush noted that “when we diversify our energy supply, we create jobs.”

Mr. Norquist asks us to rethink renewable energy, and I think he may be right. Recently, fossil fuel industry-funded attacks on renewable energy have grown, which makes me think they are beginning to feel the pressure from cleaner renewable energy with no fuel cost.  Pseudo scientific claims like those found in Norquist’s op-ed make front page news while the incredible growth rates of renewable energy projects and jobs in the U.S. barely make the back page, which leads me to believe that the media is more focused on reporting controversy than facts.  The public remains committed to clean energy, while public officials waver, seeking to catch the political wind.  All of this makes me think that we need to recommit to a cleaner energy future with less pollution, healthier children and more local jobs.

Source: The Lookout

Déjà Vu All Over Again
Listen carefully these days and you might think it was last year, 2009, or even 2006.  Just a year ago, Governor Perry lambasted the EPA’s decision that Texas’ air permitting program was illegal and amounted to special treatment for a single state when all other states are in compliance with the law.  In a statement at the time Perry claimed "The EPA's irresponsible and heavy-handed action …. threatens thousands of Texas jobs, families, businesses and communities throughout our state." Perry went on to claim that “it will also likely curtail energy supplies and increase gasoline prices nationwide."  Last month the EPA announced that every former Texas permit holder is now successfully working with the agency on their new permits.  No more claims of job losses or gasoline shortages, just companies working with regulators to abide by the law and protect the health of Texans.

In 2006, TXU (now Luminant), the largest power plant owner in Texas, announced that they needed to build 11 coal plants to make sure there weren’t any rolling blackouts in the next few years.  A serious PR campaign ensued with TXU and Governor Perry trying to fast track the coal plants, but as it turned out, they weren’t needed, and that’s part of the reason TXU is now known as the Energy Future Holdings (EFH), the parent company of Luminant.  In fact, the coal plants that Luminant did build, Oak Grove and Sandow, were a big part of the reason Texas experienced the blackouts in February – supposedly reliable, 24-hour coal plants tripped offline when it got too cold.

Repetitive Stress Injury
Raising the threat of job losses, blackouts or other specters has become so common for Perry and industry that it probably amounts to muscle memory at this point. It reached a new level this week, however, when Luminant decided that it would lay people off in order to make a statement.  While Luminant may not like the Cross-State Air Pollution Rule (CSAPR), it’s essentially a “Good Neighbor” rule and none of the clean air protections in the rule require any power plants to shut down.  Companies like Luminant make the decision — either invest in common retrofits like scrubbers to clean up pollution or close down old and poorly controlled plants and replace them with cleaner more efficient generation.

Numerous companies, such as Houston based Dynegy, Exelon, PPL Generation and NRG Energy, have publicly announced that they are well-prepared to meet the updated clean air protections.  As Dynegy’s CEO Robert Flexon points out: “Any efforts to delay or derail CSAPR would undermine the reasonable, investment-based expectations of Dynegy.  In our case, CSAPR allows competitive markets to confer deserved economic returns on our investments in clean energy technology.”  In his Houston Chronicle business column today, Loren Steffy muses: “Funny how much difference good financing and a little planning can make. After all, power generators knew that, sooner or later, stricter air standards were coming.”

Scare Tactics
This also means that claims of rolling blackouts are vastly overstated.  While a study released by Electric Reliability Council of Texas (ERCOT) has received a lot of coverage, the headlines have focused far more on flash than substance.  In fact, ERCOT admits that Texas has had 6 years to prepare for this rule, beginning with the passage of the Clean Air Interstate Rule in 2006, which included Texas.   What’s even more troubling is that ERCOT seems to assume that neither the grid operator, nor any of the power companies, intends to learn from the lessons of this past year in terms of better preparations for extreme weather.   ERCOT assumes that this time next year our power plants will again be unprepared for long periods of hot weather.  In Texas.

In fact, a close reading of the ERCOT study actually rebuts the most popular arguments of state officials and industry that Texas had no warning that this rule was coming:

“The rule is a replacement for the Clean Air Interstate Rule (CAIR), which was implemented in 2005. The CAIR was remanded to the EPA by the United States Court of Appeals for the District of Columbia Circuit in 2008. In the CAIR program, Texas was regulated for particulate matter emissions (annual NOX and SO2 emissions).”

In their presentation to the Texas Public Utilities Commission (PUC), ERCOT directly contradicted the claims of industry and officials protesting this rule.  At the center of this argument is the idea that EPA’s modeling, which shows increased prices for low sulfur coal, is incorrect.  ERCOT’s conclusions seem to support the EPA’s modeling, though, stating that the rule “will have impacts on national fuel markets, increasing demand for natural gas and low sulfur sub-bituminous coal.”

A Texas Tradition: Politicizing ERCOT
It would be much easier to take ERCOT’s study seriously if the organization hadn’t become so politicized over the last 5 years.  In 2006 TXU (now Luminant) seized on a flawed ERCOT analysis to justify the need to build 11 new coal plants to boost reserve margins in 2009/2010.  The plan stalled and 2010 reserve margins proved much higher than ERCOT’s original projections.  Since then, using ERCOT studies to meet the needs of the moment has become a science, whether it serves the needs of someone running for President on a platform of clean air bashing or one of the companies running their committees.

In the latest example, the desired outcome of ERCOT’s latest study was made clear by a number of public statements from Texas PUC Chairwoman Nelson prior to the study’s release, including her August 4th letter to the EPA and her statement in late August:  "I have no doubt in my mind that this rule will result in reliability issues and rolling outages in Texas."  It’s a little like the boy who cried wolf, but this time businesses are laying off workers because their management team failed to plan accordingly to abide by the law.   It’s an especially hard claim to swallow given that ERCOT’s own planning documents show over 12,000 MW of resources are expected to come online within the next few years.

Gambling Away Jobs
The truth is that Luminant, just like Dynegy, Exelon, NRG, the Lower Colorado River Authority, Austin Energy and San Antonio’s CPS made a choice in 2005.  As other companies planned for compliance, Luminant chose to fight it, gambling with their shareholders’ money and their employees’ jobs.  Think of this: In 2005, there were 32 other power plants in the nation that emitted more sulfur dioxide (SO2) than Luminant's Martin Lake coal plant.  By 2010 there were only three.  At the time, Luminant probably thought that by not investing in retrofits like scrubbers to clean up pollution, they could get ahead of the competition.  Ironically, what they have found out instead is that they are actually behind the competition, and now their employees may suffer for poor decisions made by management.

Running on Energy

Source: Texas Tribune

One of the fundamental propositions of Rick Perry's presidential run is that energy policy in Texas has been successful in de-carbonizing our grid.  The claim is a pretty big stretch, considering that we still generate more carbon dioxide than any other state and, as far as it relates to our successful renewable energy mandates, he may have something to brag about.  Perry has been eager to take credit for their success in boosting wind energy, although he's not always the first to point to the mandates that lead to such unprecedented wind growth.  It's been easy for Perry to support wind power, after all, success has a thousand fathers, and the most meaningful legislation was assembled without much involvement from him or his office.

Perry's support for solar, however, has always been a trickier issue even though it's incredibly popular with voters across the political spectrum.  Even though voters want to see Texas go solar, it's anathema to some of his biggest fundraisers and allies such as homebuilder Bob Perry, who worked to weaken homeowner's rights to install solar on their own roofs, and the Koch brothers, who have opposed clean energy in other states.  So far, Perry has managed to walk a tightrope with his typical political savvy – pointing to legislation he signed or supported while working behind the scenes to undercut the movement towards a real solar industry in Texas. 

Walking the Political Tightrope

Perry signed legislation in 2005 establishing a 500 MW non-wind renewable energy mandate and in 2007 strengthening that same mandate. His appointees at the public utilities commission (PUC) and Perry himself have been slow on doing anything meaningful with the legislation, leading to uncertainty for businesses wishing to grow in Texas.  Most people in the industry saw this legislation as a way to push solar development in largely the same way the original mandate pushed in wind development.  Now, in an article in the Texas Tribune, it sounds like Perry’s spokesman, Mark Miner, wants to pretend his boss never signed those laws.  In fact, it sounds like he doesn't think Texas has any real potential as a state for solar development [emphasis mine]:

"If you mandate a specific technology, you run the risk of getting stuck with high costs, and such mandates have failed to pass the Legislature in the past. The state making a decision based on its own conditions is different than forcing a one-size-fits-all approach on the whole nation. For example, South Dakota, Texas, and other states in the Plains have great potential for wind because of the climate and geography; other states have good potential for solar, but that is not the same for every state.”

As Miner notes, the original mandate for wind that Perry signed into law was less than ten percent of peak demand, making it so small as to have no significant impact to consumers and, therefore, a reasonable goal for the state of Texas.  By comparison, the 500 MW goal Perry did sign into law – though his appointees at the PUC failed to act on it – would be less than one percent of total peak demand, having an even smaller impact than the original wind mandate.  It is now quite apparent with his recent appointment of Commissioner and outspoken renewable energy opponent, Donna Nelson, as Chair of the PUC that Perry wants to ensure that Texas never reaches the goal he signed into law though.. This results in the likely killing of any renewable energy progress at the PUC, including future legislation, should it pass.

Maybe the Sun Doesn't Shine on Texas

It's as if Perry and spokesman Miner think Texas doesn't have any real solar potential, which makes me wonder if they've read their own reports on renewable energy, showing solar power could supply Texas' energy needs many times over.  His claim that Texas chooses not to provide incentives based on technology is laughable in the face of Texas' $1.2 billion/year "high cost" natural gas tax exemption. 

Maybe Perry needs to make a trip to San Antonio where they recently increased their solar goal to 400 MW after seeing how cheap solar proposals are today.  This is in addition to about 44 MW they've already installed or contracted, in other words almost the entirety of the 500 MW non-wind mandate that Perry signed into law but refuses support.  Some of Perry's funders and allies argue that solar is too expensive, but the largest municipal utility in the state (and country) with some of the lowest electric rates in the state, just decided to invest in solar in a big way for two reasons that fit right in with Perry's ideal energy policy: San Antonio wants to keep electric rates low and solar will help them do that; it also wants to grow jobs, a key outcome to their clean energy strategy.  Perry has been touting himself as the "jobs governor" since he started running as a nominee for President, so you'd think the smart jobs policies of cities like San Antonio, Houston, and Austin centered around clean energy would be the perfect message. 

Unfortunately Perry seems uninterested, either because the corporations and people who have funded him are opposed or because he just doesn't think Texas has the potential to be a real solar state.  Either way it's disappointing, and I'm sure that the solar industry would agree. For the first time this fall, the solar industry is bringing its largest business conference to Texas.  Thanks in part to Perry's solar equivocation, industry (valued at over $38.5 billion globally) may not be sure if Texas is ready for the big time, despite the fact that voters want to see solar in Texas.  For a jobs governor being on the wrong side of businesses that want to bring jobs to Texas and voters who want to see solar power here, it sure seems like a bad place to be, especially when unemployment in Texas is the worst it's been in 24 years.

Big (REALLY Big) News In San Antonio

Earlier this week I posted a few of the great clean energy stories throughout Texas, with a glancing reference to the exciting work going on in San Antonio.  Almost as soon as the post went up San Antonio’s electric utility CPS Energy (CPS) made an announcement that is truly astounding: because of the increasingly lower costs of solar power and rising costs of fossil fuels, they have increased their bid for a solar power plant from 50 MW to 400 MW.  I'll let that sink in a little, but I'll just say this: they mean it.

It's been fascinating to watch this historical shift over the last several years at CPS (the largest utility of its kind in the nation) from a conventional utility with conventional power plants to a national leader in wind and solar.  It's a story that is probably worth several blog posts in its own right, and unfortunately we don't have the space to go into it today.  While cities like Houston, Austin & San Antonio are leading the way on clean energy, the state of Texas is still falling behind.

Charlie Brown And The Football

Source: PBS

When the state legislature wrapped up their session with little help to offer the solar industry and other forms of renewable energy, there were few opportunities left for a stable regulatory framework for renewable energy in Texas.  The best hope was for the Public Utilities Commission (PUC) to enact the goal for non-wind renewable energy in the state set by the Texas Legislature in 2005, which expires today with the deadline to consider the rule proposed in January.  It's no surprise that the wheels of commerce turn faster than the gears of government, but it's taken seven years for the PUC to come close to finally enacting this goal and it looks like they're going to drop the ball again. 

When it comes to clean energy in Texas, it reminds me of Lucy and the football from Charlie Brown: every time the state gets close to creating a market for solar power, they yank the football away again.  The PUC proposed this rule back in January and has apparently decided to back out of it.  Senator Troy Fraser, historically a champion of solar power filed his bill that came very close to passing last session but failed to bring it up for a hearing this session despite being Chair of the Committee the bill sat in.  Governor Perry has championed Texas' leadership in wind energy as proof that Texas can create good clean energy policy, but sent mixed signals this session, leaving open the question of whether or not he supports solar power or other renewables as he does wind.

Will Texas Be The Clean Energy Capitol?

Businesses can't operate under that kind of uncertainty, and the solar industry is the fastest growing industry in the U.S.  A handful of Texas cities, like San Antonio, Houston and Austin, are working hard to capitalize on that growth by creating new jobs locally, but without a stable statewide policy, businesses won't come to or stay in Texas.  Just last week, the U.S. Department of Energy announced $4.5 billion in loan guarantees for solar projects.  Unfortunately, none of the projects are in Texas, though, because the business climate is too uncertain in our state to get solar projects of the scope and scale needed to attract that kind of business. 

In my last blog post I mentioned a company, AETI, with a long history in Texas' oil and gas industry that has begun to move into the world of renewable energy.  Their CEO, Charles Dauber wrote in May about the need to look forward and not only backward in the search for jobs.  I think his conclusion bears repeating: "While our dominance in oil and gas was dictated largely by location and good fortune, the economic boom that comes with our new energy economy is not guaranteed. We will either be reaping the rewards of the tens of thousands of jobs brought to Texas from renewable energy industries or be importing parts and services from California, New England or locations outside of the United States, including Europe and China."

In just the past two weeks there have been some exciting announcements from clean tech businesses across the state:

Old Dog Learns New Tricks

First up on the list of new TX success stories is actually a company that's been established in the oil and gas industry for almost 70 years.  AETI was founded in Beaumont, TX to provide what they call "power delivery solutions" – basically the electrical products, technologies, and services used to connect power generation sources to the users of that power. 

Last Monday, AETI's Integrated Solar Inversion Station (ISIS™) crossed the final hurdle needed before it can be used by utility-scale solar developers.  The ISIS is the first 1000 volt, 1megawatt (MW) solar inverter approved by a certified test laboratory for use with distributed energy resources.  AETI is a company that, after 60 years in the oil and gas industry, decided to diversify into renewable energy to grow profits and stabilize their business.  To me that sounds a lot like Texas: almost one hundred years after Spindletop, a wind rush started in the state which helped keep electric prices low in the face of rising fossil fuel costs.  As their CEO, Charles Dauber wrote in the Houston Chronicle in May: "I believe that just as my company found strength in realizing its role in our nation's energy future, so too can the state of Texas."

Industry Leaders Join Pecan Street Project

AETI isn't alone: Last week the Pecan Street Project announced the formation of its Industry Advisory Council.  With such household names as Best Buy, Intel, Sony, LG and Texas Gas Service, the formation of this council shows that industry players across the spectrum want to be involved in a cleaner, more secure energy future.  In fact, as these companies will often say, they need to be involved to make sure they stay profitable as the energy industry continues to move in new directions.

Come On In, The Water Is Fine!

Next on the list of exciting announcements (but certainly not least in terms of size) is Baryonyx, a Texas based offshore-wind energy company that took their first step into Texas waters (pardon the pun) by applying for a permit with the U.S. Army Corps of Engineers.  Baryonyx is leasing the state-owned sites from Texas' General Land Office (GLO), providing much needed income for the state's Permanent School Fund.  Earlier this week I had the chance to meet with GLO Commissioner Jerry Patterson who feels confident that Baryonyx will have the first offshore wind farm built in the U.S.

(The Best Kind Of) Leadership Struggle

Finally, followers of Texas clean energy industry have known for some time that Austin isn’t the only town vying for Texas’ clean energy crown and the jobs that come with it.  Already the state’s leader in solar with 14 MW and another 30 MW on the way soon, San Antonio recently announced some more great news in the form of not one, not two, but five clean technology companies partnering with the city to bring jobs and clean energy.  Not one to sit on the sidelines as the energy industry continues its shift towards clean technology, Houston continues to attract national attention as a growing hub for clean energy.

For old manufacturing companies and the Silicon Valley set, for cities steeped in oil or just looking to attract new jobs, the clean energy economy seems to be the natural choice to grow a business.  And Texas, America’s oil and gas capital for the last hundred years, has a chance now to be our clean energy capital as well.  Companies like Baryonyx and AETI, and forward-looking city efforts from San Antonio, Houston and Austin’s Pecan Street Project are making sure that Texas is in a position to do just that.

Will the "slow and steady" approach win the race for the new energy economy?

The Texas legislature is more than halfway through its biennial 140 day sprint, and I doubt anyone's surprised at the level of heated political rhetoric.  Still, somehow in the midst of this political morass, a few bills that would help modernize both our electric grid and energy markets have begun to move.  These bills may not make or break the clean energy industry but they can help break down outdated market barriers and get rid of unnecessary red tape.  That would go a long way toward bringing more solar power, energy efficiency and customer choice to the state.

While they may not make the market in Texas, they will make the market work.  New business models are helping customers make the investments they want in renewable energy and efficiency, and the continuing decline in technology cost makes these changes all the more critical.  For instance, Senate bill 981 offered by Chairman Carona, would free third party ownership models like those offered by SunEdison from the regulatory webs in Texas that have prevented an aggressive investment in new technology in most of the state.  It also would get rid of the outdated requirement for anyone with a solar panel on their roof to register as a wholesale power generator.

It's remarkable that during a session filled with so much politics and rhetoric, a sensible bill to cut red tape in Texas that keeps new businesses from growing is making its way through the process.  The bill was passed by the Senate Committee on Business and Commerce late last month and will hopefully pass through the Senate quickly, heading to the House.  Another bill, SB 1501 from Sen. Watson would allow smart grid companies like Tendril, Incenergy (an Austin startup) and oPower to use one of the nation's smartest grids to provide customers with detailed usage information that will reduce their electricity consumption.  The bill, which passed out of committee last week will bring innovative businesses and industries to Texas, and benefit electric consumers at the same time.  Its companion legislation, HB 2709 from Rep. Turner will be heard in the House Committee on State Affairs this Wednesday.

Speaking of the House, there have already been positive hearings on a few important bills, notably HB 340 from Rep. Pete Gallego and HB 774 from Rep. Anchia.  The first bill is similar to SB 981 but also includes an important provision that would ensure customers would get a fair rate from their utility on any excess renewable electricity they generate at their home, church or school.  Historically this has been an issue of heated debate between customers and their utilities, but Rep. Gallego and his staff deserve credit for working over the last few sessions to bring together a broad consensus.  Thanks to a series of meetings led by Rep. Gallego and TXU Energy that consensus seems to be very near and hopefully we'll see the bill move forward in the process this week.

Rep. Anchia's HB 774, which sets a goal for the state of building 1,500 MW of non-wind renewable energy received a very positive hearing in the House Committee on Energy Resources.  The bill's companion in the Senate, Sen. Watson's SB 330 has yet to be heard in the Committee on Natural Resources, nor has Chairman Fraser's SB 492 solar omnibus bill.  As Chairman Keffer summed it up near the end of the Energy Resources hearing, the bill helps the state avoid "putting all our eggs in one basket" but the Chairman pointed out some political concerns relating to the bill.  Since the bill seeks to replicate our success with wind, one of both our current and former Governor's favorite bragging points, its unclear why this issue would be politicized.

Another key bill is from Rep. Darby: HB 2961 would create a statewide solar program that would develop residential, commercial and utility scale solar in Texas.  The solar industry is one of the fastest growing and most dynamic industries in the world, with manufacturing plants being built in Tennessee, Michigan, Pennsylvania and a handful of other states.  So far Texas has failed to attract this dynamic industry, and HB 2961, which is up for a hearing this Wednesday, seeks to reverse that trend and bring new businesses to the state.

For the now the future of any of the bills that would jumpstart the development of solar power or other renewables is less clear.  That's bad new for the businesses looking to come to Texas to grow, but at least there is some good news during a pretty difficult session.

Next week renewable energy advocates and policy makers will come together for Texas Energy Independence Week at the Texas Capitol.  The event, put together by the Texas Renewable Energy Industries Association (TREIA) will allow industry, advocacy groups and academics to connect with policy makers and staff on how Texas can better realize their opportunities in developing the renewable energy market and reaping the economic rewards. 

I will be moderating a panel on Wednesday, February 23 from 3:45pm-5:00pm.  I will be speaking with representatives from Applied Materials, American Electric Technologies and SolarCityabout making the business case for renewables in Texas. 

I’d like your help in leading the discussion.  What questions would you ask of these business leaders?  Comment below or tweet your questions to @EDFtx before the panel on February 23, 2011 and I’ll select a few of the best to ask our panelist. 

Even if you can’t make it to the panel, this is a great opportunity to expand the discussion of promoting renewable energy development in Texas and maybe you will spark an idea no one has thought of before. 

I’ll update my blog after the panel with highlights from the discussion and answers to some of your questions. 

Below is information about the panelists and a link to more information on Texas Energy Independence Week.  

The Business Case for A Robust Role for Renewable Energy in Texas’ Energy Mix

 
Moderator: Colin Meehan, Environmental Defense Fund

Panelists:
Cathy Boone, Senior Director, Energy Policy and Market Development, Applied Materials, Inc.

Charles Dauber, President and Chief Executive Officer, American Electric Technologies, Inc.

Colin Murchie, Director, Federal Government Affairs, SolarCity

Click here for more information on Texas Energy Independence Week and TREIA.

Last week's rolling blackouts have left a lot of people wondering what (or who) exactly is to blame.  While it's clear that incredibly cold weather played a significant role, details have only now begun to trickle out about the root causes of the rolling blackouts – and what helped save Texas from a system wide blackout that would have taken hours, if not days, from which to recover.  That didn't stop a lot of people from throwing out bizarre conspiracy theories, unfounded assertions, or claims about the need to build more fossil fuel plants in Texas, all before the facts were even known. 

Just the Facts, Please

We'll get to that soon enough, but first let's hear from someone who really knows what happened – Trip Doggett, head of the Electric Reliability Council of Texas (ERCOT), which manages the state's electric grid and ordered utilities to begin rolling blackouts to avert a more serious crisis.  In a Texas Tribune interview last week Doggett said: "Our problem was more around the 50 generating units who had issues with their lack of winterization or insufficient winterization efforts that caused the major problem."  50 generating units.  About 7,000 MW of fossil fuel plants, or more than 10% of the supply on the grid, went down last week because of 'insufficient weatherization.'

Sunday's article from The Dallas Morning News has the most in depth rundown of issues leading to the rolling blackouts so far.  The article points to weatherization as the overwhelming problem, mentioning poor coordination in the regulatory vacuum between state gas and electric oversight agencies as an ongoing issue.  Doggett went out of his way to thank the wind industry for helping stave off a statewide blackout: "I would highlight that we put out a special word of thanks to the wind community because they did contribute significantly through this time frame. Wind was blowing, and we had often 3,500 megawatts of wind generation during that morning peak, which certainly helped us in this situation."

Putting Politics Ahead of People

One would hope that both the facts and the severity of the situation would prevent politicians and talking heads from turning this issue into partisan talking points about the need to build more dirty, fossil fuel power plants.  Sadly, we're not so lucky.  It didn't take long for folks with a purely partisan political agenda to try to create a diversion from rolling blackouts, which left thousands without power during one of the coldest days of the year in Texas, as proof of a vast conspiracy.  It apparently all started with the website Prison Planet.tv, which includes among its “weaponized weather” claims the idea that "for decades the US government has had the power to both lessen and increase the severity of adverse weather for their own purposes." Hmmm??? 

Three brand new coal plants were knocked out by the cold weather, but that hasn't stopped people from clamoring for more of the same.  Instead we should be focusing on precautions that would actually help Texas avoid this kind of situation in the future, precautions most homeowners already take like insulating pipes to prevent them from bursting.  Smart planning also includes diversifying our state’s energy portfolio to protect Texans from unexpected situations.  Increasing our wind resources or finally tapping in to Texas' solar powerhouse could have prevented this issue altogether.  But instead we're stuck talking about issues to help people win elections, not to stay warm.

From what I can tell the internet rumors conclude that President Obama is personally responsible for shutting down power plants "from coast to coast" during last week's rolling blackouts in Texas.  They even go so far as to accuse him of treason.  Soon after The Fox Nation, and others like Rush Limbaugh and Matt Drudge, claimed that the Texas blackouts were “a direct consequence of the Obama administration’s agenda to lay siege to the coal industry, launch a takeover of infrastructure under the contrived global warming scam, and help usher in the post-industrial collapse of America.” 

Address the Problem, Not the Diversions

Texas politicians got in the act too: Rep. Louie Gohmert took a break from yelling about terror babies to blame federal environmental regulations on the rolling blackouts.  State lawmakers and regulators were a little more circumspect, probably because they're more involved with the day to day operations of the grid.  Some couldn't resist placing blame on wind generation, but that may have been before the grid operator's very public word of thanks to the wind industry for saving Texas from a statewide blackout.

In the end unfortunately these internet rumors and political posturing are a lot of hot air that risk distracting policy makers from the real issues that need to be addressed to keep Texans warm in the winter and cool in the summer: winterizing power plants and investing in energy efficiency and renewable energy.  These political diversions also keep us from addressing the real issues like modernizing our antiquated electric grid so that it is better able to detect outages sooner, and pinpoint and fix problems more quickly.  That would probably be asking for too much from Rush Limbaugh, but I hope our state legislators can keep their focus on the facts and not conspiracy theories.