By Judd Messer
The Dallas Morning News, Feb. 3, 2022
For consumers, the best approach is to treat all sources of energy equally.
According to the U.S. Energy Information Administration, renewable energy resources represent the fastest-growing segment of electric power generation in the country with 24% of U.S. electricity generation coming from renewable resources in the first half of 2022. Texas, for its part, led the nation in renewable energy production in the first quarter of 2022, accounting for over 14% of the country’s totals.
This investment stretches far and wide across our state and, many times, these wind or solar projects become the lifeblood of rural Texas as one of the key capital-intensive economic development options for small, rural communities. This supports existing services and population by boosting local tax revenues and providing landowners an avenue to earn extra revenue from their land.
Of course, Texas has long been a powerhouse when it comes to energy production, driven in large part by the state’s abundant fossil fuel resources, which have paved the way for the “Texas Miracle,” and provide fuel and everyday products for countries across the world. While some want to complete an energy transition and move completely away from fossil fuels, I hope Texas will lead the way for an energy expansion, which advocates for more of everything.
This is important when considering how vital energy is to our economy and how complementary all sources of energy production are to each other. For example, renewables are increasingly selected by oil and gas producers in the Permian Basin to electrify their operations. In the Permian, the oil and gas industry says they expect electric demand for operators to grow 10 times within the next eight years. By using renewable energy for their power, they pay lower costs for power and reduce their carbon emissions, making their products more attractive to consumers around the world. It’s an economic win and a win for the environment.
When it comes to the electric grid, this compatibility is underscored yet again. Clean-burning natural gas provides enhanced reliability, while renewable energy resources give electricity consumers a low-cost, predictable source of energy day in and day out with solar energy production increasing when the sun shines and wind following a complementary trajectory at night. Leveraging all our Texas energy resources together makes for efficient markets that provide cheaper electricity and appropriate hedges for both reliability and affordability.
The good news is that more of everything is coming. Energy developers continue to choose Texas’ business-friendly environment to invest. In fact, the latest reports from the Electric Reliability Council of Texas show that over 23 gigawatts of solar, 7 gigawatts of wind, and nearly 9 gigawatts of dispatchable storage and natural gas electric generation are in late-stage development and on their way to being online for Texans.
To deliver this low-cost power, though, Texas policymakers must focus on building a more robust transmission infrastructure with an eye toward the long-term economic benefits for consumers. Stated plainly: we need more of high-voltage power lines to efficiently deliver Texas consumers the cheapest power. Doing so will benefit residential consumers, manufacturers along the Gulf Coast and drillers in the Permian.
Insufficient transmission infrastructure cost Texas consumers $2.8 billion in 2022 alone, a 33% increase over 2021, because energy is often trapped behind transmission bottlenecks. A transmission infrastructure that the grid can grow into is critical for reliability, and this investment will pay for itself when more low-cost energy makes it to the consumer.
The key to this energy expansion remains a level playing field in Texas for all resources. The support renewable energy resources have received over the years has led to a desire by some policymakers to penalize renewables in the Texas market. In reality, this only punishes the consumer they’re aiming to protect. Because of the competitive nature of power contracts, tax incentives are baked into the price charged for power, meaning Texas consumers pay less because the power costs less to produce.
The best case for Texas consumers is a technology agnostic approach that treats all sources of energy equally. If we do that, Texas will continue to lead the world in production of all energy resources and its citizens will benefit.
Judd Messer is the Texas vice president of the Advanced Power Alliance. He wrote this column for The Dallas Morning News.
Originally posted on The Dallas Morning News.