The best thing happening right now are the grid scale batteries. They make the companies that build them rich through better arbitration of power prices at the same time they vastly lower power prices for everyone.
No more peaks of power costing ridiculous amounts (and troughs of negative power prices).
You can be anti green for all it matters on this one. The batteries are massively profitable. They are coming on mass everywhere and there’s no stopping them.
My understanding was that the companies aren't getting rich because competition has saturated the market and revenues from energy arbitrage have plummeted in 2025 because everyone needs to discharge during the same limited window.
"Vermillion said, adding that most battery operators in Texas earn the bulk of their revenue during a handful of extreme weather days, so “there might be 15 days over the year that matter for capturing revenue.”
That specific article is talking about the transition from ancillary services which drove the early battery adoption to actually buying and selling power which was only part of the business case for the initial battery rollouts.
The same story is repeating everywhere, batteries will very quickly supply all the ancillary needs for a grid at a fifth of the cost of spinning gas turbines if you let them.
The article seems written to intentionally confuse the saturation of that market with the wider abitrage market.
The high prices in a few days is likely more to do with Texas using those high prices to incentivize peaker plants rather than contract separately for capacity which some other markets do. They both still pay for it, just as different items on the total grid bill.
It would be strange if peaker style plants didn't make most of their money from peak times, whether they get paid via high market prices or capacity payments.
And when you enter a new market with batteries, it's shaving the peakiest peaks you've based your business model on. This also saves the most money (and carbon) for utility customers.
But all reporting on renewables needs to act like the whole thing is about to collapse into mad max for some reason.
sidewndr46
I'm not really sure how you can argue that a battery saves carbon. I'm assuming you mean carbon emissions. If the battery is charged up from a coal plant, then discharged during the day in lieu of a natural gas turbine it's probably measurably worse in all aspects. Carbon into the atmosphere & numerous other emissions from coal is pretty bad.
Since we're talking about Texas apparently most coal plants by kw-h are either offline or in some cases even decommissioned. Apparently in 2023 13.2% of generation was sourced from coal.
ZeroGravitas
In any well functioning grid that should all be priced in and batteries will be charging during the cheapest and cleanest times and discharging during the dirtiest and most expensive times.
sidewndr46
If externalities were priced into the grid, we basically wouldn't have air pollution.
jl6
There’s still a fortune to be made by whoever can crack seasonal storage. This is the ur-problem of humanity: to pay for the winter using the summer.
ZeroGravitas
In Europe wind power peaks in the winter so with batteries and hydro to smooth out the gaps you can get a combination of solar and wind to match your demand with relative ease. This does depend on location though, Texas wind peaks in Spring apparently.
A parallel and necessary step (one that has, suspiciously, suddenly become a culture war for the far right in europe) is electrification of heating with heat pumps, which lets you use your existing gas infrastructure to meet winter generation needs.
Paradigma11
The problem is that you still need the infrastructure to sustain through longer https://en.wikipedia.org/wiki/Dunkelflaute . It does not matter if you have to pay the fixed cost of the infrastructure to use it once or ten times a year. If we only need it every few years things will probably get worse since politicians might try to skirt it and hope nothing will go wrong during their tenure.
I am not arguing against intermittent energy sources but we need to address these problems.
jmatthews
Even if the round trip efficiency is 25%?
Seasonal storage at competitive prices per megawatt hour is somewhat of a solved problem it just doesn't seem to be getting investment.
While related insofar some electricity inevitably gets converted back into heating, I don't think its really relevant to this discussion which is explicitly about electricity.
ZeroGravitas
The winter peaks in gas and electricity are driven by heating demand. Electrification of heat combines the two and will make winter electricity peaks even peakier.
So anything that reduces that heat demand at a lower cost is a relevant fix, this includes heat storage, district heating, general efficiency and insulation improvements etc.
sidewndr46
Since we're talking about Texas, you could just come up with a way to store all the natural gas we flare each year. Which is a huge amount. Or you could just sell it to places that could use it.
SideburnsOfDoom
> the companies aren't getting rich ... revenues from energy arbitrage have plummeted
To be fair, there is an upside for such a company no longer being able to extract huge amounts of money from the general public on a regular basis. An upside to the public.
Enron was in this business and in this state.
SlowTao
It was about 15 years back, I remember some reasonably smart but partially anti-renewables folk talking about this. By anti-renewable I would say they were just skeptical with a much higher bar to get over than others. Weren't saying it was impossible but where much more cynically inclined.
They argued there would be issues with renewables unless there was a big uptake in storage. That was the key to making it all happen. Well now we have a big uptake in storage and it is starting to look like the future in that sense is very bright.
Scale is funny like that, it looks like it won't happen for the longest time and then it suddenly become ubiquitous. There is still a long way to go but improvements are happening fast.
padjo
We’re still a long way from figuring out storage for renewables. Here in Ireland in winter we get weeks long periods of calm, cold, overcast weather where renewables generate almost nothing. There’s no known energy storage mechanism that can handle this, so we still have to burn fossil fuels. I don’t doubt we’ll figure it out, but I think skeptics still have a valid point on storage.
space_firmware
Yeah, it's a struggle. The upshot is most of the cost of combined cycle natural gas peaker plants are the fuel costs, so while storage solutions get figured out, or the renewable get massively overbuilt, you can maintain the FF infra for fairly cheap for the these days.
robocat
Incorrect.
most of the cost of peaker plants is the capital cost. The fixed costs are high and spread over few hours (peaker) or even no hours at all (just providing ready capacity if required e.g. ready in case of faults with generators or transmission).
The variable costs (fuel) are normally quite irrelevant.
I work for a UK company that manages grid scale batteries - they're awesome!
I wonder how they look in a US landscape that's hostile to renewables. Arbitrage works because solar and wind and very cheap and very indeterminate. The more gas, coal and biofuel (all much more expensive but more flexible) in the grid, the less opportunity for arbitrage.
AnotherGoodName
Yeah in South Australia where it’s over 70% renewables the batteries have been reported to have profit of $46million in a year on a $90million capital cost project.
No doubt the profits will come down (as long as the free market can do its thing) but for now it’s a crazy market. There’s a reason graphs of battery installations are a hockey stick right now.
I will call out one thing for European readers. You’re suspiciously absent on lists of battery build outs. You guys don’t have lots or lobbying from legacy power providers wanting to maintain the ridiculously high peak prices by any chance?
As in everywhere in the world except europe has a hockey stick of battery build out growth happening right now. (Not a criticism just an Australian confused at why europe as a whole has fewer battaries than australia).
sveme
Cannot find a graph of battery capacity growth for Germany right away, but anecdotally (stories in the news and number of startups I‘m aware of), that market is super hot right now.
Edit: according to [1], numbers predict a coming tsunami of battery installations for Germany
Battery capacity in Germany is growing exponentially, but most batteries being installed right now are home systems that don't help much to stabilize the grid.
pjc50
Planning rules are just really onerous and inefficient. I've seen a number of reports of battery facilities denied planning permission in Scotland over concerns like "noise" and (slightly more reasonable) fire service access roads.
baq
Less renewables in the mix and useless politicians mean they aren’t as needed, or perceived as needed. Spain could use some ASAP, no idea why they haven’t built them.
protocolture
IIRC Musk was trying to get AEMO to reduce the time increment for trading power so they can do even higher frequency trading.
danielscrubs
Why do you think we go to Australia for sun?
And our wind turbines seems to have crazy maintenance costs…
Don’t give our politicians more ideas, let the market just solve this please. They are already taxing energy to death because of ”fairness”.
sofixa
> I will call out one thing for European readers. You’re suspiciously absent on lists of battery build outs. You guys don’t have lots or lobbying from legacy power providers wanting to maintain the ridiculously high peak prices by any chance?
The European power grid has multiple interconnections between the various countries, and some of those counties already have their grid scale storage (mostly pumped hydro). So it's much less needed.
So why would the countries heavy on renewables in their mix invest a lot in batteries? For instance the UK can rely on French nuclear and Norwegian hydro as a grid scale alternative source. While sometimes there are continent wide issues (we've had twice a month of low winds + overcast which impacted negatively wind and solar), the grid is sufficiently diverse and dispersed that it works pretty well.
As the recent outage in Iberia showed, it's slightly more complicated than that and batteries could still have a part to play to smooth demand ups and downs. And there are still a bunch of battery projects, even in France that doesn't have that much renewables in its energy mix, being heavy on nuclear.
tonyedgecombe
>For instance the UK can rely on French nuclear and Norwegian hydro as a grid scale alternative source.
The plan in the UK is to build gas peaker plants to bridge the gaps where there is no wind nor sun. They are going to be contracted to work for no more than two weeks a year.
petesergeant
> I will call out one thing for European readers. You’re suspiciously absent on lists of battery build outs
If I had to pull reasons out of my ass for this, I'd suggest South Australia and Texas both have a great deal of land with shitty agricultural output (as compared to Europe) and a lot more sunlight. I suspect building batteries is obviously very profitable today in Australia and Texas today, and companies will target Europe when the tech is a bit cheaper and the most profitable markets have been saturated.
ggm
I'd love to know if the decision to burn other economies wood pellets in Drax could be ended, and if Batteries can do the job!
benrutter
Yeah me too! Drax seem to share not just the name, but the morals of a certain Bond villain.
Probably not yet though, the UK government seems fairly keen for Biofuel in their net zero policy.
Banning Drax from using woodpellets from important nature (ancient forests, rainforests etc) is probably a route that'll be more likely to havesuccess.
dismalaf
Is there anywhere that's truly hostile to renewables? I live in Alberta, the oil producing region of Canada with a reputation for hating renewables, and we have the most solar and wind power in the country. We just have unfortunately topography that doesn't allow hydro and the powers that be never gave us a nuclear plant so we also use natural gas and a few legacy coal plants...
No one here is against solar panels on their home and few are against wind farms, there's just also the realisation that for many applications, oil will remain for the time being. Aircraft, boats, tractors, and cars in many regions of the world are simply unsuitable for electric power with the current state of electric storage (batteries are heavy relative to energy stored).
benrutter
By "hostile" I mean a market set up such that it's not possible for renewables to meaningfully participate, rather than that people are actively anti-renewables and campaigning against them etc.
I think the US is moving this way, by removing grants for green energy, continuing grants for oil, placing targetted tariffs on solar panel manufacturing countries, and blocking planning permission for wind.
dismalaf
> continuing grants for oil
Oil isn't used for grid energy generation in most parts of the world... We shut down our last diesel plant many years ago. It's way too expensive, relatively speaking. Like, here we're using renewables to power oil extraction lol. For the most part, renewables don't compete with oil since renewables power the grid and oil doesn't. Electric vehicles can reduce oil demand somewhat, but there will still be massive demand for oil for shipping, air travel, construction vehicles and farming vehicles, for the forseeable future.
benrutter
Yup you're right! I should have said gas.
WaxProlix
ERCOT has done a great job of setting up incentives, getting out of the way, and letting markets solve their problems. Working with CAISO and then going to set up batteries in ERCOT was such a breath of fresh air for an old team of mine.
whatever1
And tax payers pay for their F ups and then some additional bonuses to the gas traders of BP when Texas freezes.
Aside from shutting down some compressor stations that gas companies failed to properly register as essential equipment, ERCOT had almost nothing to do with NG prices.
Gas and power are intertwined but still very separate markets.
Natural gas would have gone even higher had ERCOT not shed load, so if you want to make reductionist statements about complex issues, you could say that ERCOT actually took away from the bonuses of BP gas traders who were long.
whatever1
They did not do their job to regulate the market. Set aside their failure to check for winterization and the complete failure of demand forecasting or execution of rolling blackouts (that ended up being uncontrolled week long power losses that literally killed people).
They had almost uncapped max wholesale prices for energy during the blackouts. At some point it had reached 10k per megawatthour! Of course companies went bankrupt, and of course BP traders held bonus parties. The taxpayers apart from these they also had to bail out the bankrupt retailers.
bz_bz_bz
You haven't explained what any of that has to do with gas trading profits. HSC didn't go to $400/MMBtu because of ERCOT.
You're technically right about ERCOT's limited role in gas pricing and the regulatory distinctions. But ERCOT did have some direct failures beyond just being a scapegoat, like ignoring federal winterization warnings, the $16 billion overcharging scandal where they kept prices at maximum for two days after outages mostly ended, and poor crisis communication. Even if PUCT and the Railroad Commission should have mandated better reserves and winterization, ERCOT still mismanaged what was within their control.
sidewndr46
The entire point of Texas having it's own grid is to ignore Federal guidance. If we were going to follow it, we'd just add more areas of the state to the east & west grids. Which Texas is already connected to, just in limited areas.
bz_bz_bz
I never said ERCOT did not have failures. I'm in the industry and have been massively critical of ERCOT for caving to politics rather than following market rules when they arbitrarily decided to keep the market at the cap. PUCT actually had final say on repricing those hours and chose not to.
ERCOT also didn't have the authority to implement winterization recommendations from the 2011 report outside of the already existing NERC standards. You can blame the PUCT for that or blame FERC for not actually updating those standards until 2023.
However, you still seem to have missed (and demonstrated) my point by referencing Energy Transfer -- they are a midstream company who made 99% of their profits off of NG not power. Conflating their profit with ERCOT's power prices is the problem. People refuse to educate themselves on the difference between gas and power markets, so the TRC and its massively influential O&G lobbyists have made zero changes to the intrastate gas network since the winter storm. Why? Because every layman who has read a few articles and thinks they're an expert is solely focused on ERCOT.
That's largely true, but on the flipside at least some of the rush of batteries into Texas to do ancillary services and provide redundancy are a result of greedy capitalists seeing the profits a few hundred MWh can get you in Texas (at taxpayer expense!) and rushing in to get a piece of the pie. So, markets!
bee_rider
Wait, how does it work? If the government is using taxpayer money to buy services… that’s not really a free market solution in the conventional sense, right?
Of course if we have to pretend it is to get Texas to do it… fine I guess.
WaxProlix
Na, the utility payers actually pay it, though taxpayers pay for some of the infrastructure and administration, and given to some service providers in the form of tax breaks I think. The circles of that venn diagram are close to an overlap though.
bob1029
I moved from ERCOT to MISO/Entergy (still in Texas) and my electricity costs have dropped by nearly 50%.
The part that is really shocking to me is the cost to maintain transmission infrastructure is dramatically higher in this area too (power lines in the forest).
I think it's hard to compete with a certain combination of fuel mix and fully amortized 20th century plants.
ZeroGravitas
As an aside: the blog author is using ChatGPT to asses the factual claims made by his commenters in a similar way to the Twitter trend of asking @grok to fact check tweets.
Interesting times.
gregwebs
Texas is one of the best climates in the US for renewables but in locations with less sun and wind the math will be different. That math includes batteries for load shifting of which Texas is installing a lot.
As renewable generation increases past a certain level grid stability does require additional effort and that’s a lot more difficult to price in. In Texas their grid is isolated from the rest of the US. This may create a lower ceiling on renewables since they can’t send excess generation anywhere other than their own batteries .
tim333
I wish the UK could do something like that - our costs seem to be way higher than Texas.
ProllyInfamous
Texas needs more (any?) pumped-storage hydro (a non-chemical, gravity-fed battery) to store all this renewable energy.
TVA (similar in size to ERCOT, mostly within Tennessee) is about to begin its second such facility, after Raccoon Mountain [0]. Run-of-the-river facilities exist (including two in TVA's jurisdiction), which are capable of pumping water "up" the dam (for later use during peak loads) — perhaps LCRA might explore the feasibility of this?
Regardless of how the energy is stored, it might also (eventually) make sense to join Eastern/Western interconnects (and thereby "store" the energy outside of Texas). But I know ego/"Texus"/pride mentality exists (having grown up in Austin), so I won't hold my breath on accepting Federal regulations...
Why would pumped storage be better than the massive amounts of batteries being added right now? Batteries scale small, scale big, can be put where there's already transmission, can be put at either sides of grid congestion to lower that congestion, can regulate frequency, deliver reactive power, and be moved to new locations if the grid changes and they could be better deployed elsewhere. Literally a Swiss Army knife that can grow to whatever size is needed, and they can be thrown up in months as opposed to years.
I'm not sure if hydro could compete on price any more, either. Batteries are so cheap.
typewithrhythm
I don't really know if there is somewhere in Texas that works geographically; but the idea is if you have a good spot you essentially get an arbitrarily large store for the price of one dam.
At some point you get limited by fill/discharge rate, but the cost of storage in a big pumped hydro is still pretty cheap.
sidewndr46
Have you ever been to Texas? 'one dam' doesn't even begin to describe the place. If you're at a body of water, look around. There's a dam. All lakes are artificial with the exception of Lake Caddo.
Lake Travis already has a power plant and is rarely every full for example. No one is going to start using pumped hydro there because there is no extra water to pump.
Nexxius
To add to this TX and the SW USA are currently (been 20 years now) experiencing an extended drought. Water levels are at an all time low; many lakes are almost dry; and even the aquifers are getting a bit frumpy. As sidewndr46 said, ain't no water to pump.
MobiusHorizons
Pumped hydro is a pretty cool solution, but it requires very specific geography and water supply combinations that are unfortunately relatively rare. I'm not that familiar with Texas's water and elevation situation, but it seems less obviously a good candidate than the TVA. Don't get me wrong, pumped hydro is an awesome solution where it works, but it's not easily deployable in the way that batteries are.
bz_bz_bz
ERCOT is roughly 3x bigger than TVA in terms of both energy demand and service area.
dylan604
They said similar. Similar in the same way a flat arid landscape that is the second largest in size in the union compares to a mid-sized state with mountains and more annual rain fall and is heavily forested with an average temp 20° lower. You know, not the same, but similar. Maybe they meant simile?
sidewndr46
TVA is a so called "Independent agency of the United States government", so no. Not even close. ERCOT is a state level entity
dylan604
What happens to your battery when you are in the middle of a drought and your "battery" doesn't have enough water in it to operate as a battery?
AndrewDucker
You don't need to use a river for pumped storage, you can even have a (mostly) closed-state solution that pumps water back and forth between two holding tanks.
dylan604
What does a river have anything to do with what I asked?
AndrewDucker
You seemed to think that the water would be susceptible to drying up in drought conditions, presumably because the river feeding it would dry up.
dylan604
I'm seeming to think nothing while knowing that the drought conditions slow the replenishing of the water levels, but the water levels are lowering faster than just evaporation because Texas lakes are water supplies for the cities. That drains the lake levels much faster than just being in a drought.
acyou(dead)
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yieldcrv
I think people misunderstand the aggregate conservative position:
They just dont want the state to fund the cause and don’t consider it the state’s role or problem or the state as a solution to a problem that isnt wholly solved by the proposed expensive solution
People outside of that group attribute the disagreement to insanity
When in reality as soon as an economical and private sector solution is there, republicans are on board
I see a way to bridge consensus so maybe I’ll run for office eventually since this is still too abstract for most
eigen
> They just dont want the state to fund the cause and don’t consider it the state’s role or problem or the state as a solution to a problem that isnt wholly solved by the proposed expensive solution
Texas Senate Bill 819 "relating to renewable energy generation facilities; authorizing fees." would have made it the states role to create an expensive solution.
> (1) for a solar power facility, ensure that all facility equipment is located at least:
(A) 100 feet from any property line, unless the applicant has obtained a written waiver from each owner of property
located less than 100 feet from the facility; and
(B) 200 feet from any habitable structure, unless the applicant has obtained a written waiver from each owner of the habitable structure; and
> (2)for a wind power facility, ensure that all facility equipment is located at least 1,000 feet from the property line of each property that borders the property on which the facility is located, unless the applicant has obtained a written waiver from each owner of property located less than 1,000 feet from the facility
Texas Senate Bill 388 "relating to the legislature’s goals for electric generation capacity in this state." would have made it the states role to create an expensive solution.
> (a) It is the intent of the legislature that 50 percent of
the megawatts of generating capacity installed in the ERCOT power region [this state] after January 1, 2026 [2000], be sourced from dispatchable generation [use natural gas].
are the Texas bill sponsors not part of the aggregate conservative position?
standardUser
> When in reality as soon as an economical and private sector solution is there, republicans are on board
The leader of the conservative party has claimed that windmills kill whales, cause cancer, are "garbage" and pledged to prevent any being built in his second term.
benrutter
I think this seems at odds from what I hear from republicans using retoric that's anti-renewable, anti-climate change and pro-oil.
Ignoring that though, energy is a market defined by government policy.
To give an example, solar assets can't control when they output, so many countries have contracts where solar gets a fixed price. Without that, peak solar times might even have negative pricing.
Those are two seperate ways to frame a market, one making renewables profitable and one making them uneconomic.
We can shrug and say "make them profitable under the current conditions" but that ignores the fact that fixed prices for output makes energy cheaper and cleaner as a whole.
My point is, there is no "true market", its something governments define and control. The question should be what outcomes you want.
I'd argue for cheaper, cleaner and more diverse energy, but I'm not in the US.
energy123
One of the roles of the state in a mixed economy is to cautiously intervene when there's market failure. Whether through tax policy or industrial policy. Republicans don't want to stop the market failure because they don't believe there is market failure. It's not only a disagreement in values it's a disagreement about basic scientific and economic facts.
brookst
Now do oil. How do Repubkicans feel about subsidies for oil?
yieldcrv
If it passes and they benefit from it then they wont avoid being beneficiaries of it and they’ll keep it
While if they dont know they are beneficiaries of a policy then they’ll proverbially eat their face by removing it
sremani(dead)
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DarmokJalad1701
> the pervasive petrochemicals in the modern world are not easily replaceable
Then let's use the finite amount of oil for that, instead of burning it.
Global warming also affects the feasible latitudes for food production.
Teever
The US throws away between 30–40% of its food supply.
The US has policies that are outright hostile to mass-transit.
The US has policies that produce some of the ugliest and grossly inefficient suburban environments that have ever existed.
Sure, oil is a critical part of modern civilization, but we could still have modern civilization, and a hell of a better one at that with better policies that end up using far less oil.
johnisgood
> The US throws away between 30–40% of its food supply.
Not just the US, sadly. One of the reasons they do it is: transportation costs, and to avoid the attraction of the homeless as it is "bad for business" ("makes us look bad").
“In markets like Texas, the wholesale price of electricity is set equal to the price of electricity from the most expensive generator needed to meet demand, often referred to as the marginal generator.”
moooo99
I‘m not sure why people are often confused about this. Electricity is at a basic level a commodity. A kWh from solar isn‘t any different than 1 kWh obtained by burning coal.
If the current market situation allows for a price of 12ct/kWh, why should I - just because I have the more effective technology - get less than the fossil guy?
Generally this is even beneficial because it could increase margins for renewable and grid scale batteries
adgjlsfhk1
This is great for renewable energy. It means that solar plants and batteries can get payed at coal/nuclear rates, and during the middle of the day, fossil fuel plants have to turn off since they can't compete with solar prices.
bpodgursky
Texas is only ahead in renewables by certain biased metrics.
If you instead measure how much people talk about renewable energy, California comes out far ahead.
reillyse
Why the hate on California apparently it’s 11th in the country with 43% renewable
Lot of others that could be complained about (like Florida and Arizona)
envoked
I feel like Washington state doesn’t get enough credit. 72%+ from renewables and water reservoirs are the original grid scale battery.
masklinn
That’s because hydro does not deserve credit: if you can do hydro you already do because it’s cheap and reliable, and if you can’t do hydro that’s it. It is thus of next to no interest. Same with geothermal heating.
envoked
Valid point.
kortilla
No, they deserve credit. Otherwise protestors get the upper hand and get the dams decommissioned.
If you downplay the right thing, the wrong thing for energy gets selected for other reasons.
sidewndr46
It's almost like valuing an ecosystem is worthwhile or something like that.
bpodgursky
Washington is actively tearing down dams for salmon runs.
All their hydro was built 60 years ago, by the federal government. The state deserves absolutely no credit.
yieldcrv
It’s not a contest if the deployments are occurring
chronic83040
> It’s not a contest if the deployments are occurring
deployments are not occurring in california, that’s for sure
readthenotes1
"how much people talk"
Is hot air a useful commodity?
steveklabnik
I believe your parent was making a sarcastic comment, and you two agree.
skippyboxedhero
Wrong because the underlying assumption is that we are moving from a system where energy can be brought on as required to an equivalent system.
One of the big issues with renewables that the author is, I can only assume, is deliberately eliding is that energy cannot be brought on as required. Even in Texas, you still need non-renewables to fill the gap and you still need to recover the costs of running those assets in the price...Texas is the absolute best case scenario, and it isn't working (as the comments show, it is quite easy to see why: people are obsessed with politics and reality matters less than your political enemies being wrong, companies have also realized that the subsidies in this area are incredible if you tell politicians they are right). The same thing is happening with battery operators.
You also see the same thing in other countries that invested heavily in renewables (UK is one example, they are mothballed a lot of non-renewable sources ten years ago, the government had to introduce massive subsidies for retail consumers because electricity prices are so high due to the need to recover costs of the remaining non-renewable sources when the wind happens to stop blowing): it has to increase the cost of energy because you have to pay for renewables and pay for the battery operators to do nothing and pay for the gas operators to do nothing.
epistasis
To my best understanding, and to the extent that you are making a testable claim, it is not borne out by any analysis I have seen. For example:
> Texas is the absolute best case scenario, and it isn't working
In Texas, it's private investors who shoulder the risk of whether or not an energy source is economical. And private investors are largely choosing solar, wind, and batteries, with a bit of gas.
When you say "energy brought on as required" you appear to be talking about dispatch; but that's what batteries do, right?
And solar/wind do not need to be dispatchable to be a good economic choice; as long as their are cheaper than the fuel and operating cost of a different dispatchable choice, then why run the more expensive energy source?
skippyboxedhero
Because private investors do not care if energy is more expensive, and there have been massive federal subsidies.
Correct, batteries do this but you need to pay for all the time when batteries are sitting there doing nothing.
I didn't say they did need to be dispatchable or not, the problem is the composition of supply. Renewables are more expensive, so why run them?
standardUser
Renewables are more expensive than... what precisely?
And last I checked, we don't harangue cars because most of the time they are "sitting there doing nothing", so in what way is that a valid criticism of energy infrastructure?
> it has to increase the cost of energy because you have to pay for renewables and pay for the battery operators to do nothing and pay for the gas operators to do nothing.
No, it doesn't have to increase the cost.
If you have a town powered by gas, the cost of maintaining and staffing the gas plant is locked in.
But most of the cost of that gas plant is the fuel.
If the total cost per kWh of a solar or solar+battery installation is lower than the fuel cost of the gas plant, then you build it. It saves you money even though you're paying the gas operators to do nothing part of the time.
If it's not cheaper than fuel, you don't build it. No harm no foul.
Follow that strategy and you'll end up with lots of renewables without wasting a penny.
Though honestly some idle gas plants don't cost that much. How many kilowatts do you need? 4? Okay, the fixed costs for 4 kilowatts of combined cycle gas power are $50 per year. That's all it takes to have backup production for the entire grid, even with no base load plants anywhere.
skippyboxedhero
No, there are capital costs.
You don't have to theorize: you need substantial amounts of spare capacity because with solar, for example, there will be night and winter, the costs of maintaining this capacity have been substantial in practice and have driven up energy costs everywhere (the confusion here is about what the article is claiming to say vs what is actually happening...the article constructs a model to show that energy prices would be higher, the problem is that the model is useless).
Dylan16807
You're paying the capital and maintenance costs of the fossil plants whether you have solar or not. They are not "driving up the price" because they're not new.
And in the real world renewables will never go to zero so you can reduce that cost when you build a lot of renewables, even accounting for the worst case winter.
Am I saying that overbuilding solar from a financial perspective never happens? No. But I am saying that if money is your priority, it's straightforward to plan and build renewables in a way that strictly saves you money. Even though you'll sometimes be paying people to do nothing!
SlowTao
This has been a reasonable point to bring up. Renewables when they are first coming into the system represent only a small part of the energy supply. But as they get bigger, the swings in availability end up swinging the entire system around to a larger degree. This is usually where Gas plants take up the slack trying to balance out the system. Storage is the key.
I suspect this is an issue that looks worse in 'intuitive' foresight but not so bad in educated retrospective but we will not know until we pass through that point. I am but an armchair "expert" on this. Usually when something like this comes up, 15 people who know better than me will highlight something I was not aware of.
skippyboxedhero
The problem has been big bang policy-making. There is no inherent issue with renewable vs non-renewable, the only thing that matters is can you get energy at a cost that is economic...that is the purpose of the system we have. The problem has been created by policy-makers who want to go very quickly in one direction without regard for any other goal than increasing the share of renewables.
standardUser
I think the only things most people are missing is the that a) renewable energy production has skyrocketed in the last five years specifically, with no slowdown in sight and b) as of just the last couple years we are seeing a similar boom in industrial battery installation that is starting to making the chorus of "but the sun doesn't shine at night!" sound old fashioned.
antupis
The issues with Texas and the UK are that their grids are relatively isolated. Like here in Finland, we have a bigger share of renewables than the UK or Texas, but electricity is still cheaper than UK and pretty much the same as in Texas.
skippyboxedhero
The UK is not an isolated grid, massive amounts of electricity are exported/imported with Europe with all the benefits/costs that come with that (this was an issue, for example, when electricity prices went up in the UK and the UK began exporting huge amounts of energy to Europe...this was effectively why the UK had to introduce a retail subsidy, because EU nations did the same which increased their effective demand for energy).
And the difference is that Finland has nuclear...that is it, which provides the dispatchable demand. It is extremely challenging to replicate this in many other countries because of the planning issues (the UK is building Hinkley, the cost for this is tens of billions, the funny story here is that the government decided not to proceed with this ten years ago because electricity prices were too low...can't think what has changed in the meantime? total mystery...right?).
defrost
> Texas is the absolute best case scenario,
Better examples around the globe and within North America are non isolated grids - Texas is in a weak position to share it's excess and to get back energy from wind blowing in other states.
No more peaks of power costing ridiculous amounts (and troughs of negative power prices).
You can be anti green for all it matters on this one. The batteries are massively profitable. They are coming on mass everywhere and there’s no stopping them.
https://comptroller.texas.gov/economy/fiscal-notes/infrastru...
"Vermillion said, adding that most battery operators in Texas earn the bulk of their revenue during a handful of extreme weather days, so “there might be 15 days over the year that matter for capturing revenue.”
https://www.ess-news.com/2025/05/15/is-texas-battery-landsca...
The same story is repeating everywhere, batteries will very quickly supply all the ancillary needs for a grid at a fifth of the cost of spinning gas turbines if you let them.
The article seems written to intentionally confuse the saturation of that market with the wider abitrage market.
The high prices in a few days is likely more to do with Texas using those high prices to incentivize peaker plants rather than contract separately for capacity which some other markets do. They both still pay for it, just as different items on the total grid bill.
It would be strange if peaker style plants didn't make most of their money from peak times, whether they get paid via high market prices or capacity payments.
And when you enter a new market with batteries, it's shaving the peakiest peaks you've based your business model on. This also saves the most money (and carbon) for utility customers.
But all reporting on renewables needs to act like the whole thing is about to collapse into mad max for some reason.
Since we're talking about Texas apparently most coal plants by kw-h are either offline or in some cases even decommissioned. Apparently in 2023 13.2% of generation was sourced from coal.
A parallel and necessary step (one that has, suspiciously, suddenly become a culture war for the far right in europe) is electrification of heating with heat pumps, which lets you use your existing gas infrastructure to meet winter generation needs.
I am not arguing against intermittent energy sources but we need to address these problems.
Seasonal storage at competitive prices per megawatt hour is somewhat of a solved problem it just doesn't seem to be getting investment.
While related insofar some electricity inevitably gets converted back into heating, I don't think its really relevant to this discussion which is explicitly about electricity.
So anything that reduces that heat demand at a lower cost is a relevant fix, this includes heat storage, district heating, general efficiency and insulation improvements etc.
To be fair, there is an upside for such a company no longer being able to extract huge amounts of money from the general public on a regular basis. An upside to the public.
Enron was in this business and in this state.
They argued there would be issues with renewables unless there was a big uptake in storage. That was the key to making it all happen. Well now we have a big uptake in storage and it is starting to look like the future in that sense is very bright.
Scale is funny like that, it looks like it won't happen for the longest time and then it suddenly become ubiquitous. There is still a long way to go but improvements are happening fast.
most of the cost of peaker plants is the capital cost. The fixed costs are high and spread over few hours (peaker) or even no hours at all (just providing ready capacity if required e.g. ready in case of faults with generators or transmission).
The variable costs (fuel) are normally quite irrelevant.
I wonder how they look in a US landscape that's hostile to renewables. Arbitrage works because solar and wind and very cheap and very indeterminate. The more gas, coal and biofuel (all much more expensive but more flexible) in the grid, the less opportunity for arbitrage.
https://en.m.wikipedia.org/wiki/Hornsdale_Power_Reserve
No doubt the profits will come down (as long as the free market can do its thing) but for now it’s a crazy market. There’s a reason graphs of battery installations are a hockey stick right now.
I will call out one thing for European readers. You’re suspiciously absent on lists of battery build outs. You guys don’t have lots or lobbying from legacy power providers wanting to maintain the ridiculously high peak prices by any chance?
As in everywhere in the world except europe has a hockey stick of battery build out growth happening right now. (Not a criticism just an Australian confused at why europe as a whole has fewer battaries than australia).
Edit: according to [1], numbers predict a coming tsunami of battery installations for Germany
[1] https://www.pv-magazine.de/2025/01/13/uebertragungsnetzbetre...
And our wind turbines seems to have crazy maintenance costs…
Don’t give our politicians more ideas, let the market just solve this please. They are already taxing energy to death because of ”fairness”.
The European power grid has multiple interconnections between the various countries, and some of those counties already have their grid scale storage (mostly pumped hydro). So it's much less needed.
So why would the countries heavy on renewables in their mix invest a lot in batteries? For instance the UK can rely on French nuclear and Norwegian hydro as a grid scale alternative source. While sometimes there are continent wide issues (we've had twice a month of low winds + overcast which impacted negatively wind and solar), the grid is sufficiently diverse and dispersed that it works pretty well.
As the recent outage in Iberia showed, it's slightly more complicated than that and batteries could still have a part to play to smooth demand ups and downs. And there are still a bunch of battery projects, even in France that doesn't have that much renewables in its energy mix, being heavy on nuclear.
The plan in the UK is to build gas peaker plants to bridge the gaps where there is no wind nor sun. They are going to be contracted to work for no more than two weeks a year.
If I had to pull reasons out of my ass for this, I'd suggest South Australia and Texas both have a great deal of land with shitty agricultural output (as compared to Europe) and a lot more sunlight. I suspect building batteries is obviously very profitable today in Australia and Texas today, and companies will target Europe when the tech is a bit cheaper and the most profitable markets have been saturated.
Probably not yet though, the UK government seems fairly keen for Biofuel in their net zero policy.
Banning Drax from using woodpellets from important nature (ancient forests, rainforests etc) is probably a route that'll be more likely to havesuccess.
No one here is against solar panels on their home and few are against wind farms, there's just also the realisation that for many applications, oil will remain for the time being. Aircraft, boats, tractors, and cars in many regions of the world are simply unsuitable for electric power with the current state of electric storage (batteries are heavy relative to energy stored).
I think the US is moving this way, by removing grants for green energy, continuing grants for oil, placing targetted tariffs on solar panel manufacturing countries, and blocking planning permission for wind.
Oil isn't used for grid energy generation in most parts of the world... We shut down our last diesel plant many years ago. It's way too expensive, relatively speaking. Like, here we're using renewables to power oil extraction lol. For the most part, renewables don't compete with oil since renewables power the grid and oil doesn't. Electric vehicles can reduce oil demand somewhat, but there will still be massive demand for oil for shipping, air travel, construction vehicles and farming vehicles, for the forseeable future.
https://www.bloomberg.com/news/articles/2021-04-27/bp-emerge...
Gas and power are intertwined but still very separate markets.
Natural gas would have gone even higher had ERCOT not shed load, so if you want to make reductionist statements about complex issues, you could say that ERCOT actually took away from the bonuses of BP gas traders who were long.
They had almost uncapped max wholesale prices for energy during the blackouts. At some point it had reached 10k per megawatthour! Of course companies went bankrupt, and of course BP traders held bonus parties. The taxpayers apart from these they also had to bail out the bankrupt retailers.
ERCOT also didn't have the authority to implement winterization recommendations from the 2011 report outside of the already existing NERC standards. You can blame the PUCT for that or blame FERC for not actually updating those standards until 2023.
However, you still seem to have missed (and demonstrated) my point by referencing Energy Transfer -- they are a midstream company who made 99% of their profits off of NG not power. Conflating their profit with ERCOT's power prices is the problem. People refuse to educate themselves on the difference between gas and power markets, so the TRC and its massively influential O&G lobbyists have made zero changes to the intrastate gas network since the winter storm. Why? Because every layman who has read a few articles and thinks they're an expert is solely focused on ERCOT.
Of course if we have to pretend it is to get Texas to do it… fine I guess.
The part that is really shocking to me is the cost to maintain transmission infrastructure is dramatically higher in this area too (power lines in the forest).
I think it's hard to compete with a certain combination of fuel mix and fully amortized 20th century plants.
Interesting times.
As renewable generation increases past a certain level grid stability does require additional effort and that’s a lot more difficult to price in. In Texas their grid is isolated from the rest of the US. This may create a lower ceiling on renewables since they can’t send excess generation anywhere other than their own batteries .
TVA (similar in size to ERCOT, mostly within Tennessee) is about to begin its second such facility, after Raccoon Mountain [0]. Run-of-the-river facilities exist (including two in TVA's jurisdiction), which are capable of pumping water "up" the dam (for later use during peak loads) — perhaps LCRA might explore the feasibility of this?
Regardless of how the energy is stored, it might also (eventually) make sense to join Eastern/Western interconnects (and thereby "store" the energy outside of Texas). But I know ego/"Texus"/pride mentality exists (having grown up in Austin), so I won't hold my breath on accepting Federal regulations...
[0] wikipedia.org/wiki/Raccoon_Mountain_Pumped-Storage_Plant
I'm not sure if hydro could compete on price any more, either. Batteries are so cheap.
At some point you get limited by fill/discharge rate, but the cost of storage in a big pumped hydro is still pretty cheap.
Lake Travis already has a power plant and is rarely every full for example. No one is going to start using pumped hydro there because there is no extra water to pump.
They just dont want the state to fund the cause and don’t consider it the state’s role or problem or the state as a solution to a problem that isnt wholly solved by the proposed expensive solution
People outside of that group attribute the disagreement to insanity
When in reality as soon as an economical and private sector solution is there, republicans are on board
I see a way to bridge consensus so maybe I’ll run for office eventually since this is still too abstract for most
Texas Senate Bill 819 "relating to renewable energy generation facilities; authorizing fees." would have made it the states role to create an expensive solution.
> (1) for a solar power facility, ensure that all facility equipment is located at least: (A) 100 feet from any property line, unless the applicant has obtained a written waiver from each owner of property located less than 100 feet from the facility; and (B) 200 feet from any habitable structure, unless the applicant has obtained a written waiver from each owner of the habitable structure; and
> (2)for a wind power facility, ensure that all facility equipment is located at least 1,000 feet from the property line of each property that borders the property on which the facility is located, unless the applicant has obtained a written waiver from each owner of property located less than 1,000 feet from the facility
Texas Senate Bill 388 "relating to the legislature’s goals for electric generation capacity in this state." would have made it the states role to create an expensive solution.
> (a) It is the intent of the legislature that 50 percent of the megawatts of generating capacity installed in the ERCOT power region [this state] after January 1, 2026 [2000], be sourced from dispatchable generation [use natural gas].
are the Texas bill sponsors not part of the aggregate conservative position?
The leader of the conservative party has claimed that windmills kill whales, cause cancer, are "garbage" and pledged to prevent any being built in his second term.
Ignoring that though, energy is a market defined by government policy.
To give an example, solar assets can't control when they output, so many countries have contracts where solar gets a fixed price. Without that, peak solar times might even have negative pricing.
Those are two seperate ways to frame a market, one making renewables profitable and one making them uneconomic.
We can shrug and say "make them profitable under the current conditions" but that ignores the fact that fixed prices for output makes energy cheaper and cleaner as a whole.
My point is, there is no "true market", its something governments define and control. The question should be what outcomes you want.
I'd argue for cheaper, cleaner and more diverse energy, but I'm not in the US.
While if they dont know they are beneficiaries of a policy then they’ll proverbially eat their face by removing it
Then let's use the finite amount of oil for that, instead of burning it.
The US has policies that are outright hostile to mass-transit.
The US has policies that produce some of the ugliest and grossly inefficient suburban environments that have ever existed.
Sure, oil is a critical part of modern civilization, but we could still have modern civilization, and a hell of a better one at that with better policies that end up using far less oil.
Not just the US, sadly. One of the reasons they do it is: transportation costs, and to avoid the attraction of the homeless as it is "bad for business" ("makes us look bad").
“In markets like Texas, the wholesale price of electricity is set equal to the price of electricity from the most expensive generator needed to meet demand, often referred to as the marginal generator.”
If the current market situation allows for a price of 12ct/kWh, why should I - just because I have the more effective technology - get less than the fossil guy?
Generally this is even beneficial because it could increase margins for renewable and grid scale batteries
If you instead measure how much people talk about renewable energy, California comes out far ahead.
https://en.m.wikipedia.org/wiki/List_of_U.S._states_by_renew...
Lot of others that could be complained about (like Florida and Arizona)
If you downplay the right thing, the wrong thing for energy gets selected for other reasons.
All their hydro was built 60 years ago, by the federal government. The state deserves absolutely no credit.
deployments are not occurring in california, that’s for sure
Is hot air a useful commodity?
One of the big issues with renewables that the author is, I can only assume, is deliberately eliding is that energy cannot be brought on as required. Even in Texas, you still need non-renewables to fill the gap and you still need to recover the costs of running those assets in the price...Texas is the absolute best case scenario, and it isn't working (as the comments show, it is quite easy to see why: people are obsessed with politics and reality matters less than your political enemies being wrong, companies have also realized that the subsidies in this area are incredible if you tell politicians they are right). The same thing is happening with battery operators.
You also see the same thing in other countries that invested heavily in renewables (UK is one example, they are mothballed a lot of non-renewable sources ten years ago, the government had to introduce massive subsidies for retail consumers because electricity prices are so high due to the need to recover costs of the remaining non-renewable sources when the wind happens to stop blowing): it has to increase the cost of energy because you have to pay for renewables and pay for the battery operators to do nothing and pay for the gas operators to do nothing.
> Texas is the absolute best case scenario, and it isn't working
In Texas, it's private investors who shoulder the risk of whether or not an energy source is economical. And private investors are largely choosing solar, wind, and batteries, with a bit of gas.
When you say "energy brought on as required" you appear to be talking about dispatch; but that's what batteries do, right?
And solar/wind do not need to be dispatchable to be a good economic choice; as long as their are cheaper than the fuel and operating cost of a different dispatchable choice, then why run the more expensive energy source?
Correct, batteries do this but you need to pay for all the time when batteries are sitting there doing nothing.
I didn't say they did need to be dispatchable or not, the problem is the composition of supply. Renewables are more expensive, so why run them?
And last I checked, we don't harangue cars because most of the time they are "sitting there doing nothing", so in what way is that a valid criticism of energy infrastructure?
No, it doesn't have to increase the cost.
If you have a town powered by gas, the cost of maintaining and staffing the gas plant is locked in.
But most of the cost of that gas plant is the fuel.
If the total cost per kWh of a solar or solar+battery installation is lower than the fuel cost of the gas plant, then you build it. It saves you money even though you're paying the gas operators to do nothing part of the time.
If it's not cheaper than fuel, you don't build it. No harm no foul.
Follow that strategy and you'll end up with lots of renewables without wasting a penny.
Though honestly some idle gas plants don't cost that much. How many kilowatts do you need? 4? Okay, the fixed costs for 4 kilowatts of combined cycle gas power are $50 per year. That's all it takes to have backup production for the entire grid, even with no base load plants anywhere.
You don't have to theorize: you need substantial amounts of spare capacity because with solar, for example, there will be night and winter, the costs of maintaining this capacity have been substantial in practice and have driven up energy costs everywhere (the confusion here is about what the article is claiming to say vs what is actually happening...the article constructs a model to show that energy prices would be higher, the problem is that the model is useless).
And in the real world renewables will never go to zero so you can reduce that cost when you build a lot of renewables, even accounting for the worst case winter.
Am I saying that overbuilding solar from a financial perspective never happens? No. But I am saying that if money is your priority, it's straightforward to plan and build renewables in a way that strictly saves you money. Even though you'll sometimes be paying people to do nothing!
I suspect this is an issue that looks worse in 'intuitive' foresight but not so bad in educated retrospective but we will not know until we pass through that point. I am but an armchair "expert" on this. Usually when something like this comes up, 15 people who know better than me will highlight something I was not aware of.
And the difference is that Finland has nuclear...that is it, which provides the dispatchable demand. It is extremely challenging to replicate this in many other countries because of the planning issues (the UK is building Hinkley, the cost for this is tens of billions, the funny story here is that the government decided not to proceed with this ten years ago because electricity prices were too low...can't think what has changed in the meantime? total mystery...right?).
Better examples around the globe and within North America are non isolated grids - Texas is in a weak position to share it's excess and to get back energy from wind blowing in other states.