‘They are going to either have to move to a capacity-market style or you are going to see some weird things happen in the summer time…’
(Lionel Parrott, Liberty Headlines) Facing unrelenting heat, electricity prices in Texas surged this week, making some think the state needs to build more power plants.
And wind energy? It’s not getting the job done.
Many expected wind farms to help fill in the gap—but that didn’t happen earlier this week, when wind simply wasn’t strong enough to make a difference. According to the article, generation from wind turbines “plunged” for four consecutive days.
Texas has by far the most wind power generation in the country, at over 24,000 megawatts of installed generating capacity.
“I like renewables and having our grid have a lot of wind in the mix,” said Campbell Faulkner, chief data analyst for OTC Global Holdings.
But he argued that Texas needs other means of power in order to keep the system running.
Faulkner said he sees this week’s price increases as evidence that there’s a “capacity market” for power generators, in which they’ll be paid to guarantee electric power.
“They are going to either have to move to a capacity-market style or you are going to see some weird things happen in the summer time,” he stated.
One promising fact for enterprising power plant developers: a measure that generators use in determining the profitability of a new plant increased by over 50 percent to $63,051 per megawatt-year.
Beth Garza, an analyst with the Electric Reliability Council of Texas said the amount needs to be around $80,000 by the end of the year.
“It’s evidence that the demand-supply situation is as close as it can get,” said Garza. “Developers should be looking at this market.”