This is not a super fact but just interesting information about ERCOT. ERCOT or the Electric Reliability Council of Texas is the organization that manages the state’s electricity grid, ensuring reliability and it operates the competitive wholesale electricity market for 90% of Texas’s electric load <<Link-1>>. There are a few things that are important to remember about ERCOT.
- The ERCOT grid is located solely within the state of Texas and is not interconnected to the rest of the United States. In addition to Texans being independent, this is a way of avoiding federal regulation. ERCOT is regulated by the Texas Public Utility Commission while the rest of the country is regulated by the Federal Energy Regulatory Commission (FERC).
- ERCOT is an ISO (independent system operator), meaning it’s a non-profit organization that manages the electricity grid independently of any single utility company.
- When companies sell their energy (to ERCOT) it works like a continuous auction. The one with the lowest price is picked first and allowed to contribute with whatever they are able to and also, of course, considering what the grid-powerlines can carry safely.
Renewables are successful in Texas
One thing that surprises many people is that renewable energy, for example, wind and solar, is quite successful in Texas. Fossil fuels is important in Texas, and there are many powerful oil and gas billionaires in Texas who fight the expansion of renewables. Texas politicians work hard to create laws that punish renewables with discriminatory permitting requirements.
For example, a recent bill in the Texas Senate SB819 adds a lot of requirements on renewables and battery storage that does not apply to fossil fuel-based energy sources. An example is the requirement in SB819 that wind turbines must be at least half a mile away from the property line of any neighboring property whilst, for example, oil rigs can be built up to the property line. There are a lot more regulations in SB819 that are discriminatory, contrary to free market principes, and even violations of private property rights.
Despite all the obstacles set up against renewable energy in Texas renewable energy is on the march in Texas. The reason is that ERCOT is ultimately a price competitive free market-based system and renewables are cheap. Solar and wind are the cheapest even considering subsidies and the cost of construction, land rent, disposal, and other costs not directly caused by electricity generation are taken into consideration disposal. Click here for details. The graph below shows the evolution of different energy sources in Texas. The graph is taken from this link provided by Dr. Joshua Rhodes, a research scientist at UT Austin.
You can read more about the evolution of renewable energy in Texas by clicking here.
Watching the ERCOT Fuel Mix in Real Time
Finally, what I think is the most interesting portion of this post, the real-time ERCOT Fuel Mix. It includes a couple of energy sources not mentioned earlier in this post, hydro and power storage.
Hydro is very small in Texas and power storage is a new item that is not a true energy source but a feature that can be called upon when energy is suddenly needed somewhere. It is still not widely used but it reached 10% of the mix at one point in 2024. It is likely an energy source that will keep growing as it is instant and scalable. It is the most dispatchable energy source of all. I can add that there is a lot of misinformation spread about renewable energy, especially about wind power. To read more about that click here.
Last evening and today I took several screen shots of the real time ERCOT fuel mix (see below). A couple of things to note are that solar does not contribute at night and wind contributes more at night. It was a very cloudy and rainy day today so solar contributed less than normal during daytime, but not a lot less. It is not much less than the typical sunny day of 20%. It is true that wind and solar are intermittent, but it does not matter a whole lot because wind contributes more at night when solar does not contribute and battery storage, the most dispatchable energy source of all, is growing in importance.
Click here to watch the real-time ERCOT Fuel Mix minute by minute anytime you like. (highly recommended).
To see the Super Facts click here
Newstrade
Fascinating. Here we have only one, Eskom the South African electricity public utility.
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ERCOT and associated organizations, ONCOR the grid service provider, and the Public Utility Commission (PUC) the regulator, act almost like one unit, but anyone can sign up to sell electricity. There are 140 electricity providers in Texas.
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I hope that, from a cost perspective, is beneficial for the users.
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Yes electricity prices in Texas are below the national average, between 10 cents and 20 cents. However, one negative consequence of the competitive pricing market is price volatility. Our plan has a fixed price. I pay 17 cents for 100% wind power. However, if you chose a variable plan you are subject to electricity costs going up and down more than in other places.
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Great stuff!
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Thank you Luisa
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💐💐💐
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So interesting to see how the mix changed, especially after the challenges encountered over the years.
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Yes and the change is due to ENCOR allowing free price competition combined with the falling prices of renewables.
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Those graphs are very informative, Thomas. Renewables are definitely gaining. Good to see.
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Solar and wind are the cheapest so they are winning the price competition.
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Pretty interesting. A good mix of all options (including nuclear).
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Yes it is a good mix. Nuclear is clean and have the advantage of being dispatchable and good at providing base load. It is also price competitive as long as you don’t build a new station. Building them is very expensive and therefore it is not expanding in Texas. However, with additional research it might be possible to build cheaper Small Modular Reactors (SMRs). This is something Senator Ted Cruz is trying to accomplish as well as Bill Gates.
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Definitely very interesting, I hadn’t heard of ERCOT before. And it is surprising at least for me that renewable energy is successful there because like you said it doesn’t seem like a state that encourages that.
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Yes you are right. Texas is a fossil fuel state and the resistance to renewables is large, and yet it is successful. However, that is because of the price competition that ERCOT allows. There are 140 electricity providers in Texas all in stiff competition. It is a unique system that is decoupled from the rest of the United States and the US government can’t regulate Texas energy. This makes it easier for Texas to be its own country if it wanted to. The isolation from the US has its advantages and disadvantages but it makes Texas an interesting case in energy.
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Hi Thomas, I always get annoyed when I read about resistance like this to renewables. Its so incredibly selfish. Nice article
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Thank you Robbie. Yes SB388, which require that all new energy sources be 50% dispatchable and excludes storage, like battery storage, which is the most dispatchable of all, just passed out of the Senate and is heading for the house. Solar and wind are not dispatchable. SB819 which mandates very strict permitting requirements on renewables violates private property because you are not allowed to build renewable sources on your own property using your own money without complying with a whole bunch of bizarre rules that does not apply to any other energy sources. The senator who wrote and introduced SB819 is funded by a local oil billionaire who hates renewables. SB819 is still on the floor. SB715 is another stop renewables bill. They had a hearing on it on Tuesday but I don’t know what happened. Yes legislators in Texas are fighting the success of renewables, but solar and wind still have the advantage of being the cheapest.
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Capitalist America 🤦♀️
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Interestingly these bills are contrary to the free market as they are putting unnecessary restrictions on renewables instead of allowing them to compete.
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Yes, I did think that must be the case but I’m not sure how it works in America.
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I should say that this is just Texas. Texas is very different from the rest of the US, like as if it is its own country. The United States government does not have much say when it is about energy in Texas. Renewables have been very successful in Texas despite the strong resistance from the fossil fuel fuel industry and local legislators.
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I do know that Texas operates fairly separately. Thanks, Thomas
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Java Bean: “Ayyy, we heard that ERCOT system backfired on Texas rather badly a few winters back … I guess they think avoiding those pesky regulations was worth it!”
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Hi JavaBean, it wasn’t ERCOT system itself causing the failure but mostly because the natural gas equipment froze and dropped out. There was also power lines failing. The hardware was not built for extreme cold. There was a lot of rumors and blaming of renewables but that was wrong because they held up.
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Very interesting.
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Thank you Joseph
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flawless! Major Telecom Company Launches Global 6G Trials 2025 heavenly
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Thank you for your comment 1328sdf664
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There is nothing wrong with renewable energy. The USA needs as many sources of energy as we can get.
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Yes I agree Dawn. An all of the above approach, like Texas still have (but maybe not soon), is the best, allowing renewables to flourish on the market. We indeed need all the energy we can get. Demand is growing fast.
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The fuel mix graphs were interesting, Thomas. And the system seems to work well despite a few glitches that make the news here. It’s always interesting to me how regulations are manipulated to serve special interest groups. We’d all be so much better off if we received data instead of propaganda. Sometimes the science is hard to navigate, but misinformation is always harmful.
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Yes you are right, there are a lot of propaganda and misinformation being spread, especially about renewables. Therefore they are grossly underestimated.
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