Texas Set to Capitalize on California’s Self-Made Electricity Problems

While billboards in California might not literally bear the slogan “Move to Texas: We have electricity!”, the real-life contrast between the two most populous states is stark. Texas does stand to capitalize on the electricity problems in California, which are caused primarily by the state’s politicians’ demand for renewable energy generation that does not produce power when the sun is not shining and the wind is not blowing. Modern life itself relies on electricity and many Californians are indeed looking to Texas as a safe haven from the Golden State’s electricity problems and other woes. Not only are millions of Californians who are working from home during the coronavirus pandemic being inconvenienced, but power shutoffs endanger public health, particularly elderly residents who are more likely to succumb to heat stroke.

California is facing its worst power shortage in decades, with rolling power outages that began over the weekend and continuing during the week. Demand for air conditioning spikes in the early evening as people are coming home from work and when the sun sets the supply of solar energy is reduced. Wind energy has also slackened with the heat wave. Saturday’s outage occurred after 1,000 megawatts of wind power went off-line. To make matters worse for California, Texas also offers affordable housing, plenty of water, affordable gas, plastic straws—and it isn’t constantly on fire.

Not only does Texas have more reliable electricity, it also has lower cost electricity than California. Residential electricity prices in Texas are 37 percent less than in California, commercial electricity prices are 47 percent less and industrial electricity prices are 54 percent less, making Texas a cost-effective state for businesses that need reliable and affordable electricity. While Texas has more wind capacity than any other state, it also relies on coal, natural gas, and nuclear power. In 2019, Texas generated 19 percent of its electricity from coal, 53 percent from natural gas, 9 percent from nuclear, and 18 percent from wind.

Newsom’s Reaction

California Governor Gavin Newsom seems to be unsure of what is causing his state’s electricity problem. Besides an overreliance on renewable energy, which makes up 33 percent of the state’s electric generation, other causes cited for the rotating outages that affected as many as two million California residents include: ballooning demand, inadequate transmission, insufficient reserves and the incursion of new energy providers that do not have the same obligation to maintain reserves as traditional utilities do. Needless to say, while all of these noted causes could be and probably are contributors, it is the California government that is the root cause of the problem since it is responsible for ensuring adequate power. Its policies are doing the opposite.

For several years, the California independent system operator has been warning that the public utility commission has not required utilities to have enough reserves ready for extreme events and that electricity shortages were likely as soon as 2020 during a big heat wave. The reason was because of the state’s shift away from fossil fuels such as natural gas, which provide consistent power, toward sources such as solar and wind energy, which rise and fall with the weather and the sun. With less reliable energy supplies, the power grid has become more difficult to operate and more at risk of blackouts. And, during a big regional heat wave, there probably would not be enough power from other states available to close the gap between demand and supply. This problem grows with the growth of renewable generation.

Governor Newsom does not believe he has to sacrifice the state’s renewable energy goals to boost reliability because he can turn to. During the major portion of the heat wave, sixty percent of the power was being produced by natural gas plants, which is California’s insurance policy to get through the heat waves. But, insurance policies and especially battery storage will only increase electricity prices further for Californians. When a gas plant is expected to produce large amounts of electricity sporadically, it runs inefficiently and is much more costly than running at a steady state. The more this becomes the norm, the worse the problems become.

Many of the state’s natural gas plants have become less competitive due to California’s renewable policies and have been shutting down because utilities are forced by the government to buy power from solar and wind. Soon, California will have another problem since PG&E announced in 2016 that it will close its Diablo Canyon nuclear plant in San Luis Obispo County in 2025. That means 2,250 megawatts of electricity will need to be replaced—enough to power 1.7 million homes—and a major round-the-clock provider of emissions-free electricity.

On Monday, Governor Newsom announced he would loosen air pollution rules to temporarily free up more electricity supplies. Newsom’s emergency declaration allows both stationary and portable generators to be used without limitations. Ships are also allowed to use their auxiliary engines instead of connecting to the harbors’ power supply, and the Air Resources Board was asked to “exercise maximum discretion” tied to generator and engine usage. This is a Band-Aid on an increasingly festering wound and, furthermore, exchanges the infinitesimal benefit to world carbon dioxide emissions from California’s “clean energy” program for increases in local air pollution for Californians that are pronounced.

Conclusion

California’s energy policies toward a primarily renewable energy grid is causing unreliable power for its residents and businesses, who need a secure supply. California is currently at 33 percent toward a renewable energy standard of 60 percent by 2030—less than 10 years away. If the state cannot manage its grid with about half of the required amount, it will inevitably see further problems as it moves forward, shuttering more natural gas and nuclear units.

Presidential candidate Joe Biden and the American public need to look seriously at California’s electricity problems. Americans can expect Biden’s 100-percent clean energy standard by 2035 to cause similar problems across the nation, particularly when some states are not endowed with lots of wind and solar resources. And unlike California, which can import electricity from neighboring states, the United States cannot import itself out of a major loss in electricity load capability. With complex problems, one size does not fit all the same, as President Trump has reminded the nation during the coronavirus pandemic.

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