It might seem unlikely that an annual meeting of the Oil and Gas industry would produce so many headlines favorable for solar, wind, and battery technology – but here we are.
In just the first week of March, the ERCOT power grid that supplies nearly all of Texas set records for most wind production (28,470 megawatts), most solar production(24,818 megawatts), and greatest battery discharge (4,833 megawatts). Only two years ago, the most that batteries had ever injected into the ERCOT grid at once was 766 megawatts. Now the battery fleet is providing nearly as much instantaneous power as Texas nuclear power plants, which contribute around 5,000 megawatts.
“These records, along with the generator interconnection queue, point towards a cleaner and more dynamic future for ERCOT,” said Joshua Rhodes, a research scientist studying the energy system at The University of Texas at Austin.
The famously developer-friendly Lone Star State has struggled to add new gas power plants lately, even after offering up billions of taxpayer dollars for a dedicated loan program to private gas developers. Solar and battery additions since last March average about 1 gigawatt per month, based on ERCOT’s figures, Texas energy analyst Doug Lewin said. In 2024, Texas produced almost twice as much wind and solar electricity as California.
When weather conditions align, the state’s abundant clean-energy resources come alive — and those conditions aligned last week amid sunny, windy, warm weather. On March 2 at 2:40 p.m. CST, renewables collectively met a record 76% of ERCOT demand.
Engie is withdrawing a major gas project from consideration for a Texas program that provides low-interest loans for new or expanded dispatchable energy generation, citing equipment procurement delays.
Texas has soaring load forecasts; since 2021, power demand in the state has climbed by 17%, totalling 86 gigawatts in 2024. And the vast majority of the load deployed to meet that demand has been renewable. New gas deployment has made up a shrinking sliver — much to the chagrin of lawmakers and state leadership in the home to the fracking boom that began to reshape the U.S. energy system two decades ago.
So lawmakers created the Texas Energy Fund to support the industry and ostensibly provide grid reliability — though batteries are already serving much the same purpose. In 2023, voters approved the program, which is now working with $5 billion in appropriated funds from the Texas legislature.
Initially, interest was robust. Last summer, the program saw a “flood” of developer applications representing 72 projects, the Houston Chronicle wrote at the time. The applications requested more than $24 billion for more than 38 GW of projects — far more than the $5 billion available.
Engie joined the fray and submitted applications to finance two projects: Perseus and Spenser. TEF chose Perseus, a 930-MW peaker plant, among its 17 finalists in August.
However, Eric De Caluwé, who leads flexible generation in North America for Engie, wrote in a letter to Texas PUC director Tracie Tolle that the company recently “met with PUC staff to inform them that it has become evident that equipment procurement constraints, among other factors, will delay the project schedule such that we would be unable to make the statutorily mandated initial loan disbursements by December 2025.”
As a result, he wrote, the developer is withdrawing both the Perseus and Spenser projects from consideration — and hopes Texas will be able to backfill the Perseus slot with other eligible projects.
New figures published this week by the Solar Energy Industries Association (SEIA) and energy research firm Wood Mackenzie showed that solar accounted for 66 per cent of all new electricity-generating capacity added to the US grid in 2024, a 21 per cent increase over 2023 and marking the second consecutive year of record-breaking capacity additions.
Combined with storage, the two technologies accounted for 84 per cent of all new electric generating capacity, according to the U.S. Solar Market Insight 2024 Year in Review report published on Tuesday.
New capacity additions were backed by huge growth in domestic module manufacturing capacity, which grew by “an unprecedented” 190 per cent, growing from only 14.5 GW at the end of 2023 up to 42.1 GW by the end of 2024 – on its way to surpassing 50 GW earlier this year.
Specifically, a number of manufacturers reshored cell manufacturing or initiated new manufacturing centres during 2024, thanks in large part to the Biden administration’s Inflation Reduction Act (IRA), a largely clean spending bill passed in 2022 that rewarded local clean energy manufacturing.
When operating at full capacity, domestic solar module production can now produce enough to meet nearly all demand for solar panels across the US.
Wind and solar are projected to be necessary to fuel the boom in artificial intelligence, especially since the turbines needed to build gas power plants are in short supply. A new study released this week by S&P Global Commodity Insights said meeting surging demand for power will require significantly more renewables than gas, citing renewables’ cost and availability advantages.
“You need a whole lot of renewables because they just are cheaper,” said Doug Lewin, president of Stoic Energy Consulting and author of the Texas Energy and Power Newsletter. “If you took away all the subsidies, they’d still be cheaper than gas.”
ERCOT faces “major risk” of supply and demand imbalances over the next five years, the study found, yet gas power turbines are largely unavailable until 2030.
“AI is not going to wait for 2030 to come. It is going to be won or lost in the next few years,” Rhodes said. “And the things you can build today are wind, solar and storage.”
Electricity demand in the United States is projected to surge by an unprecedented amount over the coming decade, according to data released today by S&P Global Commodity Insights.
The data finds that an additional (net) 730-765 GW of renewables, 160-175 GW of storage, 60-100 GW of gas, and 10-25 GW of nuclear and geothermal will be needed by 2040 to maintain grid reliability, with 8% of the nation’s energy demand being met through expected energy efficiency savings over 2024 levels of savings.
Some executives in the industry, which spent more than $75 millionto help elect Mr. Trump, are increasingly frustrated with his agenda. Tariffs are making essential materials like steel pipe more expensive while also rattling consumer confidence.
Oil prices have fallen around 14 percent since just before Mr. Trump took office, to less than $67 a barrel. Peter Navarro, a senior White House aide, has talked about the benefits of oil that sells for just $50 a barrel. At such prices, companies operating in wide swaths of the American oil patch would lose money drilling new wells.
The 25 percent tariff on imported steel that took effect earlier this month is also a big concern for executives. The metal is used in everything from pipelines to wells, and it is getting more expensive because of the tariff. Some executives remain hopeful that they will able to secure exemptions, though Mr. Trump has rebuffed that idea.
Some oil and gas companies want to preserve clean energy tax credits for producing hydrogen and renewable fuels, as well as capturing and storing carbon dioxide, the leading cause of climate change.
Vicki Hollub, chief executive of Occidental Petroleum, a large U.S. oil company that has been building a carbon capture plant in West Texas, is pushing to preserve federal incentives for removing the greenhouse gas from the air. That tax credit is known as 45Q based on its place in the tax code.
“To accelerate the technology at the pace that the U.S. needs it to accelerate to start having a positive impact on our energy independence, we need 45Q to happen and to stay in place,” Ms. Hollub said at CERAWeek.
Wind and solar developers are increasingly pointing out that America’s demand for electricity is soaring, driven by a boom in data centers, and it’s proving difficult to build enough new gas plants to supply all the extra power that the nation needs.
Wind, solar and battery storage are relatively quick and cheap to construct. That could help avert energy shortages and keep prices low, an argument that renewable energy firms are making to policymakers.
“Our message to the administration is, let’s be realistic about this,” John Ketchum, the chief executive of NextEra Energy, one of the country’s largest power producers, said in an interview. “If you take renewables and storage off the table, we’re going to force electricity prices to the moon.”
“much to the chagrin of lawmakers and state leadership in the home to the fracking boom”
Eventually politicians will “follow the money” away from fossil fuels. The cultural association with he-man wildcatters is now in competition with the abundant and free wind and solar that pols can crow about.
Meanwhile, the transmission infrastructure adds an up-front cost.
Gas pipelines cost $228k per inch-mile, with newer pipelines ranging in diameter from 16-42 inches.
Overhead transmission lines cost $100k-$400k per mile.
Underground lines cost $1.5M-$3.5M per mile, but in scrubby Texas there are fewer advantages to burying them (unlike forested places).
“AI is not going to wait for 2030 to come. It is going to be won or lost in the next few years,” Rhodes said. “And the things you can build today are wind, solar and storage.”
Are they saying that because AI is the buzzword du jour, or are they deliberately avoiding mentioning the increased need for air conditioning during the heat domes in Texas? After all more power is needed to cool during 100°F than when it is a mere 90°F.