New Study Reveals the Hidden Costs of Wind and Solar Variability for Texas Consumers in 2023

A new study from the Life:Powered campaign reveals that the integration of wind and solar power into Texas' electric grid cost consumers $2.3 billion in 2023, challenging claims about renewable energy's cost-effectiveness for Texas. 

The research shows that wind and solar generation variability is 5-10 times greater than conventional power plants during peak demand periods, leading to significant system-wide costs that have been overlooked in traditional cost comparisons. These findings come as Texas residential electricity prices have increased by 22% over the past three years. 

"Our analysis demonstrates that the true cost of renewable energy goes far beyond simple generation costs," said Dr. Brent Bennett, lead researcher. "When we factor in grid reliability services, the impact on the operating costs of dispatchable generators, and the difficulties in forecasting supply during peak hours, we find that wind and solar variability is driving up costs for Texas consumers while making our grid less stable.”  

The study highlights new data from the Public Utility Commission of Texas showing that 42% of ancillary services costs in 2023 - $788 million - were directly attributable to managing wind and solar variability. Texas statute requires that these costs be allocated to variable generators, and Governor Abbott issued a directive to the PUC in July 2021 to that effect, but the current program still passes all the costs directly to ratepayers.  

The study's market simulation found that replacing current wind and solar capacity with natural gas generation would eliminate price spikes above $500/MWh, instead of frequent spikes to the $5,000/MWh market cap, and reduce overall energy prices by $1.7 billion. These findings put urgency behind the effort in the Texas Legislature to pass legislation to require wind and solar generators to reduce their variability and provide incentives for generators to help manage market volatility. 

The complete study, including recommendations for policy reform, is available at https://www.texaspolicy.com/how-wind-and-solar-variability-drives-up-texas-electricity-prices/

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