Texas and the Future – Hero or Villain – Still Undecided

Lots of interesting angles here.
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Texas’ largest power line company says it has found a way to quickly revolutionize the state’s electrical grid, making it more reliable and friendlier to renewable energy without driving up consumer costs. The problem? It is likely to require a fundamental change in state law.

The company, Oncor, which has 119,000 miles of transmission and distribution lines delivering power to more than three million homes and businesses, surprised the energy world last month when it announced that it was willing to spend billions of dollars by 2018 to install some 25,000 batteries across Texas that would store electricity to be discharged when needed.

Standing in Oncor’s way is a law that prevents it from selling electricity on the wholesale market. State lawmakers erected the wall between transmission companies and electric generators when they deregulated the electricity market in 1999.

Neither a transmission company nor a generator could make the battery economics work under the current system, the Brattle analysis said. A company would need to tap cost savings on both sides of the divide.

A big question for us Texans is whether Texas is about fossil fuel, and thus at its peak, or about energy in general, which makes it the nexus of the future.

The complete domination of the state by Republicans leads you to think it’s the former. But when there’s no serious opposition, the dominant party tends to grow up a little, since they no longer have anyone to blame for the problems.

Oncor has found a friendly ear with state Sen. Troy Fraser, R- Horseshoe Bay, who chairs the Senate Natural Resources Committee. He said he was looking for options that would not require a legal change. But Fraser said he remained bullish on the competitive market and would only support a “revenue neutral” plan that did not shift costs from one sector of the energy industry to another.

For the whole world, though, it shows that the intermittency of renewables is a fading argument for nuclear or fossil energy.

Whether or not Texas takes the lead, dispatchable stored energy looks likely to happen soon. For now, in Texas,

“It’s a good idea; it’s good market fundamentals; it’s good technology; it’s also against the rules,” said Michael Webber, deputy director of the Energy Institute at the University of Texas at Austin.

We’ll see whether the party of free marketry upholds their principles when they act in favor of renewables. Or whether they find some excuse to bend their principles just this once.

If I were a bettin’ man…

See also my talk:

Texas and Climate Change – Victim, Villain, or Hero?

and this similar quandary

Tesla wants to sell cars directly in Texas, campaigns for loosening regulations

Comments:

  1. There are always battery breakthroughs. A real one could accumulate nuclear electricity overnight for use during the day's load peaks.

    The details, that make Tobis think this one is real enough that its failure will amount to "the party of free marketry" "find[ing] some excuse to bend their principles just this once", are essential, and should get a few words in it, not just out along the links -- and if they are out there somewhere, it's not in the first, Sierra Club link, which says a Texas power line company can't legally use the battery but does not say an electricity generator couldn't.

  2. The Brattle report says the idea becomes profitable only by capturing fees from both the generation & transmission side. Much of the savings comes from reducing the need for transmission line upgrades. Generators can't be paid for doing that under current law. The scheme requires distributed storage and power producers have no place to park that, unlike Oncor.

  3. "Sierra Club link, which says a Texas power line company can't legally use the battery but does not say an electricity generator couldn't."

    The Sierrans are right. The Brattle report finds the project in public interest only if builder is rewarded for both transmission & generation savings. Generators could sell the power but they would not be able to capture cost savings associated with fewer transmission lines. Also the idea needs distributed storage - generators have no place to put that, unlike Oncor.

  4. Piffle.

    Every homeowner should have both a solar roof and a battery box, smart enough to switch from grid to standalone as appropriate.
    The battery box can be inside a metal framework on four wheels parked in a garage or under a solar carport.

    Invest in battery recycling opportunities.

  5. "State lawmakers erected the wall between transmission companies and electric generators when they deregulated the electricity market in 1999."

    Prohibiting free market decisions that would likely benefit producers and consumers does not deserve the label "deregulation".

  6. I don't buy the need for a change in the law to get this done. First, I'd like to post this comment to outline what I see:

    1. Oncor, a power transmission company, wishes to increase profits.

    2. It sees an opportunity to do so by storing power and selling it at the appropriate time to minimize the need to expand its transmission system.

    A) Storing power using ANY technology it has available is unprofitable.
    B) To make the investment viable it requires profits from the power storage system PLUS power transmission system cost savings.

    Thus we can define an UNPROFITABLE business line (storing power), which becomes profitable when it receives credit from a PROFITABLE business (power transmission).

    But the power transmission business line can ask for proposals by OTHER businesses to install the storage devices (whatever they are). The proposals would outline the PAYMENTs the power transmission business (Oncor) will make to the STORAGE business for the installation of storage facilities at points x, y,z... The request for proposals can also outline the flow capacity (kW) and total storage capacity (kWh) function for each site (presumably the benefit function is non linear).

    Before retirement I worked in private business, and I tried to encourage entrepreneurship and business development at the local level. This allowed us to stay focused on our main business, and created highly competent providers who went on to innovate and develop much better services than we had anticipated.

    Thus rather than allow a power transmission corporation to become an energy octopus the better solution is to induce its managers to learn to be smarter businessmen.


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