Speaker 1: Hello, and welcome to the Texas Tribune trip Cast for
Speaker 1: February third, twenty twenty six. My name is Matthew Watkins,
Speaker 1: editor in chief of the Texas Tribune, and I am
Speaker 1: joined as usual by Law and Justice reporter Eleanor Klibanoff. Hello, Eleanor,
Speaker 1: thanks for having me.
Speaker 2: It is still law in politics. I saw that written
Speaker 2: in the script. I decided not to fix it. Truly
Speaker 2: insane we are, I mean, I guess I'm only six
Speaker 2: months into this job, six months into this job of
Speaker 2: you not getting the title.
Speaker 1: And part of it is I have to say it
Speaker 1: literally every other week, every other week, and yeah, I
Speaker 1: still got wrong. So in this case, I think I
Speaker 1: knew it. I just typed it poorly.
Speaker 2: Sure, law on politics, I mean justice. You know it's
Speaker 2: in the it's in the name.
Speaker 1: Yeah. And here also with us is Matt Baum's, executive
Speaker 1: director of the Texas Advanced Energy Business Alliance. He's an
Speaker 1: expert on the grid, renewed energy and it's an impact
Speaker 1: on the economy. Welcome Matt.
Speaker 3: Thank you so much. Matt.
Speaker 1: It's great to be here, great to have you. So
Speaker 1: the reason we are having Matt on is because we
Speaker 1: are about two weeks away from when news started coming
Speaker 1: down that sent tear across Texas. The news was of
Speaker 1: course that it was going to be cold outside, you know,
Speaker 1: and that brought you know, the normal Texas response. Grocery
Speaker 1: store shelves cleared, emergency provisions acquired, everyone sort of reliving
Speaker 1: their collective trauma from twenty twenty one. The weather, I mean,
Speaker 1: I don't mean to downplay it too much. It had
Speaker 1: an impact. Roads were shut down across the state, Schools
Speaker 1: canceled in North Texas for you know, basically a week eleanor.
Speaker 1: I had a very interesting experience where I had a
Speaker 1: pre planned ski trip, so I was actually in Colorado
Speaker 1: working the Sunday on call shift, you know, responding to
Speaker 1: the weather. It was negative four degrees outside where I was,
Speaker 1: and like a literal blizzard going on. While I was
Speaker 1: checking in on my colleagues where it was you know,
Speaker 1: like twenty seven degrees, and we were.
Speaker 2: Like, it's all over for us.
Speaker 1: Shut it down.
Speaker 2: It is funny. It's like, you know, water, water everywhere,
Speaker 2: not a drop to drink exactly exactly, yeah, we do not.
Speaker 2: I will say the number of meetings we had to
Speaker 2: plan and prepare for this cold spell. I think it
Speaker 2: was more than we have to prepare for, like the
Speaker 2: election we have upcoming, like Texans stay ready for cold weather.
Speaker 1: Matter. Are you from.
Speaker 3: Texas now, I'm not originally Matt, I'm adopted. I'm an
Speaker 3: adopted Texan.
Speaker 1: Okay are you Are you from a colder climate?
Speaker 3: I am? Yeah. So for me, this is like, you know,
Speaker 3: not normal, but certainly something that we're used to. But
Speaker 3: I think that we're all dealing with PTSD from winter
Speaker 3: storm URI, right, Like a lot of the kind of
Speaker 3: news attention, I think people's general anxiety stems from that
Speaker 3: shared trauma that we all have back in twenty twenty one.
Speaker 3: So I think I really do think that plays a
Speaker 3: big role as far as the news cycle. But we
Speaker 3: can get into the details of kind of what went
Speaker 3: down over the weekend and how the storm was a
Speaker 3: little bit different.
Speaker 2: Yep.
Speaker 1: That's that's exactly right, And I think that's sort of
Speaker 1: the topic we want to talk about as well, right,
Speaker 1: because we did have what you would sort of describe
Speaker 1: as normal winter storm chaos, which is you know, ice,
Speaker 1: maybe some tree limbs on the line, power lines causing
Speaker 1: you know, sporadic localized outages and rows being frozen over.
Speaker 1: But the question, I think the thing that sends people
Speaker 1: rushing to the grocery store is that collective trauma that
Speaker 1: twenty twenty one power outage where you know, the grid
Speaker 1: almost failed and brought you know, the largest sort of
Speaker 1: rolling blackout situation in our country's history, and we managed
Speaker 1: to avoid that at this time, and it has raised
Speaker 1: the question that I think we want to sort of
Speaker 1: make be the topic of this podcast, which is have
Speaker 1: they fixed the grid? Does this mean that our days
Speaker 1: of a tenuous grid are over? Have we solved the
Speaker 1: problem heading into the future. Matt, you are going to
Speaker 1: help us kind of think through this question lending your expertise.
Speaker 1: But first off, I want to see, you know, let's
Speaker 1: take a step back. Let's talk about what actually happened
Speaker 1: during the storm. I'm sure you were probably tracking, you know,
Speaker 1: the sources of power and how everything was going. Did
Speaker 1: we ever have a moment of worry, did it ever
Speaker 1: look sketchy at all? Or did basically Texas past this
Speaker 1: test with you know, flying colors.
Speaker 3: Well, I would say flying colors in the sense that
Speaker 3: we had some local outages as far as you know,
Speaker 3: ice on wires, which is to be expected during this
Speaker 3: kind of storm, but nothing like we saw during Winter
Speaker 3: Storm Uri. So you know, the storm I think tells
Speaker 3: us two things at the same time. It wasn't as
Speaker 3: extreme as URI, and the grid is genuinely much stronger
Speaker 3: than it was five years ago, right, So both of
Speaker 3: those things can be true at the same time the weather,
Speaker 3: I think duration matters a lot. URI was days of
Speaker 3: extreme cold and this storm was a lot shorter, right,
Speaker 3: But even so, we saw really high demand and tight
Speaker 3: hours and the system handled those moments without any cas
Speaker 3: gatting failure. So that's the progress and I think the
Speaker 3: state deserves a lot of credit for that.
Speaker 1: Yeah, I mean I remember sort of telling people in
Speaker 1: the lead up, right, like we have to remember here
Speaker 1: that in Austin, when it's going to be in the twenties,
Speaker 1: that means it's going to be thirty degrees warmer than
Speaker 1: it was during that you know, winter Storm Uri, right,
Speaker 1: Like it was the difference between thirty two degrees and
Speaker 1: sixty two degrees basically, but you know, tagged on there,
Speaker 1: So definitely a situation where it wasn't as extreme of
Speaker 1: a storm. I want to kind of talk through about
Speaker 1: some of the different reasons for that. Some of which
Speaker 1: you possibly mentioned, and see if you could just sort
Speaker 1: of reflect a little bit on on you know, what
Speaker 1: impact those different things had. The first one I want
Speaker 1: to bring up is just weatherization, right, I mean, one
Speaker 1: of the big issues in twenty twenty one was a
Speaker 1: lot of natural gas plants in particular, were not equipped
Speaker 1: for that level of cold. They you know, lost the
Speaker 1: ability to either deliver natural you know, move natural gas
Speaker 1: or or generate power. That fell off in a very
Speaker 1: quick succession. The grid then had to sort of you know,
Speaker 1: the grid operators Urkott had to step in and you
Speaker 1: know shut you know, reduce demand significantly so we didn't
Speaker 1: completely overpower the grid. Is what is the kind of
Speaker 1: weatherization process we've gone through over the five years after that?
Speaker 1: And you know how much did that help? How much?
Speaker 1: How much is this assigned that that's working?
Speaker 3: Definitely positive science. The state really took URI seriously and
Speaker 3: enacted serious what weatherization reforms in response to winter storm Ury,
Speaker 3: and a lot of that worked over the weekend.
Speaker 2: Right.
Speaker 3: So you mentioned the weatherization of gas plants was largely
Speaker 3: optional when URI hit, and that became mandatory in the aftermath,
Speaker 3: including inspections that happened on a recurring basis. Simply put,
Speaker 3: I think that gas plants during ury were not prepared
Speaker 3: for the type of extreme cold we're seeing now on
Speaker 3: a regular basis. So I think that is a major change,
Speaker 3: and I think it's worth congratulating the state because it's
Speaker 3: something that Texas obviously took seriously, and we're doing a
Speaker 3: lot better than we were back in twenty twenty one.
Speaker 3: The grid also looks very different than it did back then, right,
Speaker 3: it's worth talking about those changes. I don't want to
Speaker 3: skip ahead too far, but the mix that we have
Speaker 3: on the grid is very different than it was this
Speaker 3: time five years ago. Yeah.
Speaker 1: Absolutely, And that you set up my next question perfectly right,
Speaker 1: Because there's been a little bit of chatter among the
Speaker 1: sort of energy wonk world, very active Twitter community out
Speaker 1: there that I like to follow and pretend that I
Speaker 1: am one of those people as well about but a
Speaker 1: lot of those folks have been talking a lot about
Speaker 1: batteries during this period. I will quote a story that
Speaker 1: ran in the Texas Tribune saying basically, battery storage has
Speaker 1: more than tripled between twenty twenty three and twenty twenty five.
Speaker 1: Allowing you know that you know when there's higher demand
Speaker 1: or perhaps less apply to kick in and supply more
Speaker 1: power to the grid. What did the role of batteries,
Speaker 1: What was the role of batteries in this uh during
Speaker 1: the storm and during the grid and staying as strong
Speaker 1: as it did.
Speaker 3: It can't be overestimated, and I'm really happy you asked
Speaker 3: that question. Batteries largely didn't exist when winter Storm Ury
Speaker 3: hit on the grid, and we now have about seventeen
Speaker 3: gigawatts of installed capacity, So that's a that's a gigantic change, right,
Speaker 3: And I think there's a misunderstanding sometimes on how battery
Speaker 3: storage works, so I wanted to just touch on that. Yeah,
Speaker 3: batteries don't run all the time, right, They're not considered
Speaker 3: base load, and what they are is their emergency responders.
Speaker 3: So what happened this is this weekend was a great
Speaker 3: example of that. Is Monday morning was when ERCA projected
Speaker 3: kind of the tightest grid conditions, meaning the generation would
Speaker 3: come very close to what the demand forecast was.
Speaker 1: We didn't.
Speaker 3: Luckily, we didn't come close to that, but the forecasts
Speaker 3: showed that Monday morning around eight am would be the
Speaker 3: tightest hour, and that's when batteries stepped up and discharged
Speaker 3: about seven gigwatts of energy. Right, So the technology is
Speaker 3: very different than how we think of traditional energy generation.
Speaker 3: But the advantage to battery storage you mentioned we're leading
Speaker 3: the country in battery storage. There's no other state in
Speaker 3: the country that has as much installed capacity as we do.
Speaker 3: We're at seventeen gigwatts of capacity. And the reason that's
Speaker 3: important is because they step up extremely quickly. They're actually
Speaker 3: the most dispatchable form of energy that we have. Right
Speaker 3: There's nothing that can ramp up as quickly as batteries,
Speaker 3: and that's exactly the tool that aircut needs in its toolbox.
Speaker 3: When grid conditions are getting tight and you can cover
Speaker 3: that gap by a couple hours, that's just huge.
Speaker 1: Can you explain a little bit just like how these
Speaker 1: batteries work? I mean, who's build bilding them? Like, what
Speaker 1: do they look like?
Speaker 2: In cause I think minor Shanning is it's actually more
Speaker 2: similar to what we're thinking, Like can I imagine batteries?
Speaker 2: People think, like, surely you don't just mean batteries, But
Speaker 2: minor shanning is, like the prep work I did before
Speaker 2: the storm of recharging my phone bank is not that
Speaker 2: different than what we're talking about here.
Speaker 3: Right, Yeah, So there's grid scale batatteries, right, and those
Speaker 3: are the ones we're talking about in this conversation. And
Speaker 3: then there's distributed batteries like a power wall or a
Speaker 3: base power battery. Right, A bunch of good examples there.
Speaker 3: But on the grid, the utility scale batteries, what they
Speaker 3: do is they store electricity when there's plenty of cheap electrons, right,
Speaker 3: So in Texas that typically means in the afternoon hours,
Speaker 3: when solar power output is really high. That's when batteries
Speaker 3: start storing their energy, and then they discharge when prices
Speaker 3: are a lot higher and energy is more scarce. Right.
Speaker 3: So they're entirely being built by private companies, right, This
Speaker 3: is all private investment coming to Texas. And what they
Speaker 3: look like is they look pretty much like large shipping
Speaker 3: containers that are sitting at substations or next to power
Speaker 3: plants for the most part in rural Texas. They could
Speaker 3: be they could range anywhere from the size of huge
Speaker 3: shipping container to the size of a refrigerator in a garage. Right,
Speaker 3: But they all fundamentally work the same way, which is
Speaker 3: they store power and then release it instantly. When the
Speaker 3: grid needs some help.
Speaker 1: And one of the things I think there's an interesting
Speaker 1: conversation about this is how much can we rely on
Speaker 1: batteries to prevent you know, things like what happened in
Speaker 1: twenty twenty one. Right. One thing I've sort of read
Speaker 1: about these batteries is they're great for moments of sort
Speaker 1: of short term need, but you know then you sort
Speaker 1: of drain them of their juice and you have to
Speaker 1: recharge them and wait till a time where power again
Speaker 1: sort of like amply available and everything like that tell
Speaker 1: me a little bit about like how they factor into
Speaker 1: the idea of keeping the grid secure in an event
Speaker 1: like this or maybe even an event like twenty and
Speaker 1: twenty one where you have much more sustained low temperatures
Speaker 1: and issues there.
Speaker 3: Yeah, that's a great question, and I think it points
Speaker 3: to how political energy has gotten since Winterstorm EURI. Right,
Speaker 3: there's a feeling I think at the capital of well,
Speaker 3: I like this technology but not the other one, and
Speaker 3: fundamentally that's not how the grid works, right, Like, all
Speaker 3: these different technologies play a really important role. And you
Speaker 3: can go look at you know, the urkat dashboard, like
Speaker 3: a lot of us nerds do and just track it
Speaker 3: all day long and see what the generation mix looks
Speaker 3: like as the day goes on. Right, You're not going
Speaker 3: to have solar power at nine pm, right, but you're
Speaker 3: gonna have tons of solar capacity in those peak afternoon hours.
Speaker 2: Right.
Speaker 3: Similarly, you'll see battery storage stepping up during like a
Speaker 3: cold winter morning like we saw last weekend, right, or
Speaker 3: in the summertime that typically is in the sunset hours,
Speaker 3: right when the sun goes down before that wind energy
Speaker 3: picks up at night, So it's covering those really important
Speaker 3: gaps when the grid needs more battery storage. So they're
Speaker 3: not meant to run the grid all day, absolutely, They're
Speaker 3: meant to handle the most dangerous moments, the spikes, the gaps,
Speaker 3: the surprises when a power plant trips. That's when batteries
Speaker 3: really play a huge role. So they don't replace the engine.
Speaker 3: They think of them more as shock absorbers on the system.
Speaker 1: Is there any worry? I mean, I don't know if
Speaker 1: I've necessarily heard this specific argument, which doesn't mean that
Speaker 1: it isn't out there, but I remember, like you know,
Speaker 1: the conversation around like wind power and even solar power
Speaker 1: during the last winter storm was right, like it comes
Speaker 1: on during the good times, when it's sunny and the
Speaker 1: wind is blowing. It's very cheap to produce during those times,
Speaker 1: which changes the profit margin situation from a place like
Speaker 1: a coal power plant or a gap natural gas power plant,
Speaker 1: making it less likely for those things to come on.
Speaker 1: But then something bad happens, like twenty twenty one or
Speaker 1: maybe even twenty twenty six, when you need that coal
Speaker 1: and gas but the market has kept them out of it,
Speaker 1: making the grid less sustainable. Is that an argument that
Speaker 1: you hear and do you lend any credence to that argument?
Speaker 1: I guess I'm looking now less in terms of how
Speaker 1: we did this past, you know, a couple of weeks,
Speaker 1: in terms of like long term futureable sustainability. Yeah, what
Speaker 1: do you think about that? That question?
Speaker 3: It's a great question. And we have a competitive free
Speaker 3: market in Urcat, right, which is very unique across the country.
Speaker 3: And I can tell you from working in the private sector,
Speaker 3: there's a lot of businesses that prefer DOT coming to
Speaker 3: Texas versus other rtos or ISOs where markets are less competitive, right,
Speaker 3: And there are capacity markets across the country that don't
Speaker 3: necessarily function as efficiently as we do here. In Texas.
Speaker 3: So to answer your question, solar and wind absolutely lower
Speaker 3: the baseline price. Right. They have no fuel costs, so
Speaker 3: when they're producing, they basically displace the most expensive generators
Speaker 3: and that keeps prices lower and it reduces how often
Speaker 3: the market gets close to scarcity, right, like during a
Speaker 3: winter storm event. And then batteries, like we were just
Speaker 3: talking about, when demand surges or something trips offline, that's
Speaker 3: when the prices can jump fast. And we saw that
Speaker 3: during Winter Storm Uri, right, those insane price spikes. So
Speaker 3: batteries respond instantly to those prices and inject power at
Speaker 3: that key moment. So they all play a critical role.
Speaker 3: And you know, I think the state Texas has shown
Speaker 3: it's all of the above strategy over the last several years.
Speaker 3: And I know Governor Abbott has talked about how we've
Speaker 3: added forty gigawatts of generation since Winter Storm Jury, right,
Speaker 3: about ninety percent of new generations since then has been solar,
Speaker 3: wind and batteries. And that's again, that's just free market economics.
Speaker 3: It's not being subsidized. It's all just private investment being
Speaker 3: made in Texas, and all the market signals are there
Speaker 3: because of all the low growth that's coming, and that's
Speaker 3: like a whole other podcast that we could do talking
Speaker 3: about data centers and AI and all that.
Speaker 1: Yeah, and I do want to get into that a
Speaker 1: little bit. But you actually set up as we're going
Speaker 1: down the list of you know, factors for why this
Speaker 1: year was better than five years ago. I mean, the
Speaker 1: other one I wanted to touch on was just the
Speaker 1: rise of wind and solar. Right, there is a lot
Speaker 1: more and in solar power online now than there was
Speaker 1: five years ago. How did that affect things?
Speaker 3: It is huge that we saw. So I believe Monday
Speaker 3: was the coldest day of the year on January twenty sixth,
Speaker 3: and solar peaked at twenty five gigawatts, win peaked at
Speaker 3: eighteen gigawatts, battery storage peaked at over seven gigawatts. So
Speaker 3: if you add that all up, you're looking at over
Speaker 3: fifty gigawatts of clean, reliable power when Texas needed it
Speaker 3: the most, Right, So, I think we're in a new
Speaker 3: chapter now where the technology is proven and stepping up
Speaker 3: in a big way when we need it. Not to
Speaker 3: mention you know, several months in a row during the
Speaker 3: summertime where solar and batteries are keeping the lights on
Speaker 3: for millions of Texans. So I think I hope that
Speaker 3: the political phase of how we talk about energy has ended,
Speaker 3: because again, we're going to need all of the electrons
Speaker 3: to keep the grid up and running, considering how much
Speaker 3: load is coming to our state.
Speaker 2: And I mean fans of the pot. Last week, we
Speaker 2: talked obviously about like the oil and gas industry and
Speaker 2: how and you know, we talked about like even on
Speaker 2: that side, I think most people in oil and gas
Speaker 2: are kind of like, you know, we need all the
Speaker 2: energy from all the sources, like as long as everything
Speaker 2: is sort of is working. And that was you know,
Speaker 2: unrelated to the weather, but just like we're going to
Speaker 2: need a lot more energy for all the data centers
Speaker 2: and AI and just people move into Texas, you.
Speaker 3: Know, And that's that's such an overlook point because oil
Speaker 3: and gas is electrifying their operations out in the permea, right,
Speaker 3: so they increasingly need cheap electrons, mainly solar and batteries
Speaker 3: to electrify and keep those those costs down. So it's
Speaker 3: all interrelated, right, Like all of these different sectors depend
Speaker 3: on each other, and I think that all we can
Speaker 3: do as a state is planned for the load that's coming,
Speaker 3: and try to be more proactive and not just wait
Speaker 3: for the tsunami to hit, but really start getting ready
Speaker 3: and send those markets to make sure that folks are
Speaker 3: coming with us here versus in other parts of the country.
Speaker 1: Yeah, so the last question, we'll go back to what
Speaker 1: we were talking about at the very beginning, right, which
Speaker 1: is just also, the weather wasn't as bad as it
Speaker 1: was five years ago, right, And and that sort of
Speaker 1: sets up like, I guess the big picture question I'd
Speaker 1: be interested in your insight on, which is how much
Speaker 1: of this past you know, a couple of weeks is
Speaker 1: a sign that we fixed our grid problems or how
Speaker 1: much of it is just well, it wasn't as bad
Speaker 1: as it was before, right, Like if a twenty twenty
Speaker 1: one level storm hit us now, would you feel more
Speaker 1: confident in our ability to withstand it? Then? You know
Speaker 1: we should have felt heading into twenty twenty one.
Speaker 3: That's that's the question, right And you know I'm not nostradamus,
Speaker 3: and yeah, it's hard to put hypotheticals on it, but
Speaker 3: I will say we dip down into like single digit temperatures,
Speaker 3: then we are in trouble. And a lot of that
Speaker 3: comes from resistance heating. Like I think folks don't quite
Speaker 3: understand how inefficient our homes and businesses are. If you
Speaker 3: add up all of the resistance heating in Texas, you
Speaker 3: would get about twelve to fourteen gigwatts.
Speaker 1: Explain resistance heating really quick.
Speaker 3: Yeah, So think of like blowing a toaster oven through
Speaker 3: your home, and that's really what resistance heating is. It's
Speaker 3: just extremely inefficient electric heating. And that's still how we
Speaker 3: build a lot of our multi family homes and apartments
Speaker 3: across the state, right because you know, the building codes
Speaker 3: are very minimal, and you know, we can get into
Speaker 3: that conversation, but really the point here is that if
Speaker 3: you could solve the resistance heating problem, you can just
Speaker 3: wipe off twelve to fourteen gigwatts of peak load during
Speaker 3: the wintertime. And that's the key problem. If we dip
Speaker 3: down to single digits, you're going to see just the
Speaker 3: heating skyrocket. And it's not just about a grid emergency.
Speaker 3: It's also about the costs for the folks that are
Speaker 3: living in those homes, right, because they hopefully make it
Speaker 3: through the weekend, but then at the end of the
Speaker 3: month that the bill comes in and those prices are exorbitant, right,
Speaker 3: and we're in twenty twenty six and still building homes
Speaker 3: as if we were in the twentieth century. So that
Speaker 3: in my mind, that's like the quickest, lowest hanging fruit
Speaker 3: if you want to solve this winter problem.
Speaker 2: I think, you know, these one off freezing cold disasters
Speaker 2: in Texas get so much attention, but I you know,
Speaker 2: we've also had extremely hot summers where we've had to
Speaker 2: worry about the grid getting tight. I mean, how do
Speaker 2: we look on that side of things going into the
Speaker 2: summer for what, frankly is like a pretty standard expected
Speaker 2: Texas weather disaster of people cooking to death on the sidewalk.
Speaker 3: Yeah, well, that that is really interesting. Like I would
Speaker 3: encourage folks to pull up you could see it on
Speaker 3: the dashboard. There's also a great website called grid Status
Speaker 3: where you can check out the numbers. But there's a
Speaker 3: pretty consistent pattern that happens in the summertime in Texas
Speaker 3: right where you can really count on before the sun
Speaker 3: comes up in the morning, you've got that battery storage
Speaker 3: showing up on the grid. Sunrise happened. Solar really ticks
Speaker 3: up until the evening hours when the sun goes down.
Speaker 3: That's also when batteries play a critical role. And then
Speaker 3: you've got the great wind energy at night that helps
Speaker 3: us out in the summertime. So I think we're better
Speaker 3: prepared for summer than we were even two or three
Speaker 3: years ago because of solar and batteries, because the build out,
Speaker 3: the deployment of solar and batteries has been so monumental
Speaker 3: over the past few years. But the extreme heat will
Speaker 3: always push the system, right, the key difference now is
Speaker 3: that the grid has more tools to manage those moments
Speaker 3: instead of just immediately heading towards blackouts.
Speaker 1: Well, and then there's another question here, right, which is
Speaker 1: that just as we have added all this power, just
Speaker 1: as we've done the weatherization and all the other things
Speaker 1: that needed to happen. After twenty twenty one, we have
Speaker 1: this new technology coming online which you mentioned, data centers, AI,
Speaker 1: all those different types of things in which we are
Speaker 1: expecting the demand on the grid to go up significantly
Speaker 1: in the coming years. An Ercott projection saying that peak
Speaker 1: demand could climb from about eighty seven gigawatts in twenty
Speaker 1: twenty five to around one hundred and forty five gigawatts
Speaker 1: in just six years to twenty thirty one. I know
Speaker 1: that there's some questions about, you know, will all that
Speaker 1: demand actually come online, and how much of that is
Speaker 1: real and how much of it is not. But I
Speaker 1: think it's safe to say a dramatic increase can be
Speaker 1: expected in the coming years. How worried should we be
Speaker 1: about kind of all these improvements and all these gains
Speaker 1: being erased due to changes in technology moving forward?
Speaker 3: Yeah, I think that's where the conversation is heading. And
Speaker 3: these days it feels like you can't talk about energy
Speaker 3: without talking about AI. And the opposite is also true,
Speaker 3: because in AI circles, folks just want to talk about
Speaker 3: energy and how they're going to come online in the
Speaker 3: next few years, considering the power scarcity. And this is
Speaker 3: not a Texas problem, this is a national problem, right,
Speaker 3: Folks are talking about this across the country. The low
Speaker 3: growth is unprecedented. But I think that Texas has a
Speaker 3: really good track record of building energy infrastructure faster than
Speaker 3: almost anywhere else. There's really no other part of the
Speaker 3: country that could accommodate all of that low growth so quickly, right,
Speaker 3: And I think that the Public Utility Commission deserves a
Speaker 3: lot of credit. I think Urka deserves a lot of credit, frankly,
Speaker 3: because they've taken the steps to build out the high
Speaker 3: voltage transmission lines right. So the first seven sixty five
Speaker 3: lines are getting built in Texas, and we're going to
Speaker 3: need much more of that if we're going to move
Speaker 3: cheap electrons across the state. So I think the number
Speaker 3: is you know, is serious, and I think it can
Speaker 3: scare some people, but it's not a crisis if we
Speaker 3: plan for it right. We're very good at building energy fast.
Speaker 3: I think that's what we do do in Texas. So
Speaker 3: the risk isn't the growth itself. I think the risk
Speaker 3: is falling back into the old mindset and the old
Speaker 3: ways of planning.
Speaker 1: And of course, so much of that growth, that fast
Speaker 1: growth that you've been talking about, has been in renewables,
Speaker 1: you know, solar in particular. Our friend you know I
Speaker 1: talked about you know, energy Wonk Twitter. Our friend Doug
Speaker 1: Lewin posted on Twitter a couple of days ago that
Speaker 1: the state set a new solar power record on February first.
Speaker 1: It was supplying twenty nine megawatts of solar power to
Speaker 1: the grid in the afternoon, which is which was slightly
Speaker 1: more than half of the power that was fed to
Speaker 1: the grid at that time, which is a pretty amazing
Speaker 1: uh uh you know shift I you know, we break
Speaker 1: that record fairly frequently. Two years ago, when Doug was
Speaker 1: celebrating that record, it was you know, half the amount
Speaker 1: that it was just a couple of days ago. Tell
Speaker 1: me the story there, like, what's what's happening? Why is
Speaker 1: Texas you know, growing so much in a state where
Speaker 1: as you already mentioned, you know, there is a lot
Speaker 1: of talk about protecting the fossil fuel industry and maybe
Speaker 1: even some resistance to to renewable energy.
Speaker 3: Yeah, and it's such a great story because I get like,
Speaker 3: you know, national reporters calling all the time, and they're
Speaker 3: like always surprised to hear that we're leading the country
Speaker 3: in soular wind batteries. Right, They're like, how did Texas
Speaker 3: become the leader in renewable energy in the country?
Speaker 2: Right?
Speaker 3: Well, I think we were blessed with the natural resources
Speaker 3: to start there, Like we just happened to have a
Speaker 3: huge amount of sunshine, vast open land that makes solar
Speaker 3: generation much more productive compared to in you know, most
Speaker 3: other states, frankly, but the key factor I think has
Speaker 3: been the competitive or cup market because we reward low
Speaker 3: cost generation in Texas, right, solar has really low fuel costs,
Speaker 3: so once the panels are built, the energy is basically
Speaker 3: free and on a really sunny day, which you know
Speaker 3: we have plenty of in Texas, that pushes more expensive
Speaker 3: generation out of the market. Right. It makes solar economically
Speaker 3: attractive for developers that come to do business here. So
Speaker 3: the result of all of that, not to mention the
Speaker 3: permitting and the transmission capacity that we have here. You know,
Speaker 3: Texas is a very easy state when it comes to permitting,
Speaker 3: like developers have a much harder time building in other places.
Speaker 3: So the result of that is rapid growth, and we
Speaker 3: now lead the country in solar capacity. I think the
Speaker 3: numbers recently passed coal. I think solar capacity did surpassed
Speaker 3: coal on the Urcot grid, which was a milestone that
Speaker 3: I think no one saw coming about a decade ago.
Speaker 2: Right.
Speaker 3: So we're really leading the country as far as a
Speaker 3: competitive market that rewards the cheapest electron available, right, and
Speaker 3: a business environment that, as you know it just lets
Speaker 3: projects get built extremely quickly.
Speaker 1: We have talked about on this podcast before dating back
Speaker 1: to last summer and had conversations with you offline about
Speaker 1: this too, right, about how the story of sort of
Speaker 1: government involvement with renewables and resistance and lack of resistance
Speaker 1: the Texas legislature, there was a series of bills filed
Speaker 1: last year that really targeted the renewable industry or would
Speaker 1: have you know, a lot of people in the industry
Speaker 1: argued would have been harmful to the industry. Uh, those
Speaker 1: almost exclusively, almost completely did not end up passing, in
Speaker 1: part because of a decision made by you know, many
Speaker 1: Republicans of that sort of like everything, you know, all
Speaker 1: of the above like approach to energy and feeding the grid.
Speaker 1: And then you know, just a couple of months later,
Speaker 1: the big beautiful bill passed and and and some some
Speaker 1: things that that kind of targeted the the the industry
Speaker 1: were in that bill and ended up going forward. I'm
Speaker 1: curious now, you know, we are you know a little
Speaker 1: bit of like half a year since that bill passed.
Speaker 1: Have we seen any impact of that in the renewable
Speaker 1: growth going forward? Like do we have a better sense
Speaker 1: now of how that legislation will will affect things in Texas?
Speaker 3: Yeah, And it really goes back to the politics of energy, right,
Speaker 3: and choosing and losers instead of just letting the competitive
Speaker 3: free market do its thing, right, which is again where
Speaker 3: Texas sets the standard for the country. So I can
Speaker 3: touch on the Texas bills, but I think you reached
Speaker 3: the conclusion, which is none of them passed the legislature
Speaker 3: in Washington. You know they did pass the Big beautiful
Speaker 3: bill has had an impact. I think solar and battery
Speaker 3: projects have mostly continued moving forward in Texas. So you know,
Speaker 3: developers are still signing deals and building capacity because of
Speaker 3: all the reasons I just talked about, Right, the urcot market.
Speaker 3: The resources are abundant here, easy permitting, so we haven't
Speaker 3: seen developers really pull back those investments. The federal tax
Speaker 3: incentives I think have improved project economics across the country
Speaker 3: in general. Right, But Texas is still one of the
Speaker 3: most competitive places to build. I think that you can
Speaker 3: compare Texas to other parts of the US and point
Speaker 3: to some areas of success. Right, So, like, what do
Speaker 3: we do really well? Well, we are, our market efficiency
Speaker 3: and our economics are very strong.
Speaker 2: Right.
Speaker 3: It's not like Texas is passing some mandate or some
Speaker 3: state law requiring a certain generation mix, right, or you
Speaker 3: know you mentioned some of the bills that were proposing
Speaker 3: the legislature last year. None of those pasts because Republicans
Speaker 3: are willing to stand up for free market economics and
Speaker 3: leave the private sector alone and let it do its thing.
Speaker 3: So I would say it's you know, it's a complicated question.
Speaker 3: I think overall, I would I would say that the
Speaker 3: competitive market in Texas is still the clear winner here,
Speaker 3: and my hope is that that continues in that Republicans
Speaker 3: and Democrats should work together to keep the grid affordable
Speaker 3: and reliable. Right Like we're talking about these AI data centers.
Speaker 3: We can't afford to be cutting out electrons because they
Speaker 3: you know, they're labeled a certain way, right Like, this
Speaker 3: is ultimately it's about the most affordable and reliable technology.
Speaker 3: So at this stage, considering what the numbers look like,
Speaker 3: I don't think we're in a position to wipe any
Speaker 3: of this generation off the table.
Speaker 1: Well, you know, we have seen how eleanor the technology
Speaker 1: has really made our energy system more reliable during these storms.
Speaker 1: If only we could have a similar advance on our
Speaker 1: transportation system and you know, be able to drive when
Speaker 1: these things happen now, or.
Speaker 2: Our ability to ice or to salt the sidewalk in
Speaker 2: front of our office, which remained an ice sheet for
Speaker 2: somehow a week.
Speaker 1: Yes, but you know that's for a different podcast.
Speaker 2: We can with our building management. We'll bring them in.
Speaker 1: Thank you eleanor thank you Matt for walking us through
Speaker 1: this really been interesting and helpful. Thank you to our
Speaker 1: producers Rob and Chris for getting this all together and
Speaker 1: for composing our theme song. We will talk to y'all
Speaker 1: next week.
Speaker 2: H