Texas Starts Waking Up To The Issue Of The Full Costs Of “Renewables”


Francis Menton

The promoters of the climate scam have a variety of deceptions to get the gullible to accede to their socialist plans. Those deceptions range from the quite sophisticated to the completely preposterous. At the sophisticated end of the scale we have what I have called The Greatest Scientific Fraud Of All Time — the deception by which 50 and 100 year old temperature records are altered (reduced) by impenetrable computer algorithms to make it seem like global warming has been much greater than the reality. At the preposterous end of the scale we have the claim that the fashionable “renewable” sources of electric power, wind and solar, are actually cheaper than fossil fuels to generate electricity.

I call this claim preposterous because the fundamental deception is so obvious that you would think that no one of any intelligence could possibly fall for it. And yet you have undoubtedly read numerous articles in the past few years asserting that wind and solar-generated electricity is now as cheap or cheaper than electricity from natural gas or coal. To make the claim, the promoters of wind and solar simply omit from their calculations the single biggest part of the cost of those sources. That would the cost of intermittency, otherwise known as the cost of providing sufficient backup or storage to run a stable electrical grid while generation from the wind and sun fluctuates wildly. (As wind and solar become a bigger and bigger part of power generation on the grid, the cost of necessary backup and/or storage could easily multiply the cost of electricity by a factor of five or more. For instance, see my post here.).

To divert your attention from this elephant in the room, somebody has come up with the concept of “levelized cost of energy,” or LCOE, supposedly to make fair apples-to-apples comparisons of the total costs of one energy sources versus another. There are seemingly sophisticated and technical discussions of life cycles and discount rates. But then, when putting a cost on wind and solar, they just completely omit the costs of intermittency. I suppose they hope that you won’t notice.

If you don’t believe me, check out this Wikipedia piece on “Cost of electricity by source.” The piece cites some five studies of comparative costs of different generation sources. The five studies come from Bloomberg New Energy Finance, Lazard, the International Renewable Energy Agency, the IPCC and OECD. Representative of the conclusions reached is this from BNEF:

In March 2021, Bloomberg New Energy Finance found that “renewables are the cheapest power option for 71% of global GDP and 85% of global power generation. It is now cheaper to build a new solar or wind farm to meet rising electricity demand or replace a retiring generator, than it is to build a new fossil fuel-fired power plant. …

Feel free to click through to verify my assertion that they simply omit all costs of intermittency when calculating the costs of generation from wind and solar.

The state of Texas, with its own power grid separate from the rest of the country, has been a leader in developing generation capacity from the intermittent renewables, particularly wind. While production from these facilities can vary greatly from month to month (depending on wind conditions), in typical months Texas has been getting about 20-25% of its electricity from wind and solar. (It was 23% in October 2020.). Then came February 2021, when Texas had a record cold spell, and the wind and sun died for several days running. Some natural gas and nuclear facilities were also out during that period. The result was a tremendous spike in spot market prices and rolling blackouts imposed by the grid operator (known as ERCOT).

Apparently the February event has caused some people in Texas finally to wake up to the issue of the true costs of the renewables. In March a bill called SB 1278 was introduced in the Texas state senate by Senator Kelly Hancock of Fort Worth to require the renewable generation sources to bear the extra costs imposed by their intermittency. Here is the relevant language of the proposed statute:

“[ERCOT] shall ensure that ancillary services necessary to facilitate the transmission of electric energy are available at reasonable prices … [and] ancillary services costs incurred by the ERCOT … to address reliability issues arising from the operation of intermittent wind and solar resources must be directly assigned by the ERCOT … to those resources. . . .”

The bill passed the Texas State Senate on April 14 by a bipartisan vote of 18-13. However, the bill got held up in the Texas House of Representatives, and apparently the legislature has now adjourned without further action on the bill. Nevertheless, it appears that the legislature has a good deal of unfinished business, and will be called back into special session at some point later in the year.

The delay has given renewables advocates a chance to regroup. A piece on May 17 at something called Utility Dive gives many of these advocates a chance to present their arguments. Most of them are BS. But I think there is a significant flaw in the language of the bill as drafted, which is that it puts the burden on the regulator, ERCOT, to figure out what particular costs are attributable to intermittency issues. That task is not necessarily so easy to do with precision in a mixed system of fossil fuel and renewable sources. A guy named Michael Jewell of something called Conservative Texans for Energy Innovation makes the point when he says this:

“[C]ost causation here is unclear because reliability needs vary with customer demand and, like wind and solar, traditional generators can [also] go offline.”

A far better structure would be for the grid operator to set up a bidding system where bidders offering power from wind and solar sources must combine their bids with sufficient backup and/or storage to provide some fixed amount of firm power over some reasonable period of time, say 24 hours. In a post back in July 2018 I phrased it this way:

[T]he grid operator should seek only offers of power that are firm and reliable for some reasonable period, say 24 hours at a time. If you want to sell wind power to the grid operator, it’s then on you to also provide the mix of backup sources (could be fossil fuel power plants, could be batteries, could be whatever else you come up with) to make your offer reliable for the requisite period.

With that market structure, the wind and solar operators themselves would be required to recognize and calculate the costs of the intermittency of their assets. The structure would also give those operators the incentive to reduce the costs of intermittency (that is, of backup and/or storage) to the extent they can.

Read the full post here.

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Jeffery P
June 21, 2021 2:10 pm

Intermittency and reliability are crippling problems for green energy. They need redundant power sources or else people must learn to live without reliable 24×7 electricity. Building a solar plant? You need to build a gas plant to take over when the solar plant isn’t generating enough. Same with wind.

Reply to  Jeffery P
June 22, 2021 6:03 am

And once you do that, why bother spending the extra money to build the wind/solar farms?

Jeffery P
Reply to  Don
June 22, 2021 8:24 am


oeman 50
Reply to  Jeffery P
June 22, 2021 6:46 am

There is a solution to this problem being used extensively elsewhere. It is called the “capacity market.” The grid managing organization (like PJM) ensures there is enough capacity to meet projected load plus a reserve margin at all times. The resources, no matter what their energy source, get paid for this capacity commitment as long as they can reliably deliver it. If the capacity is called for and not delivered, there is a stiff penalty. They also participate in the energy market.

Intermittent renewables that cannot deliver power on demand cannot bid into capacity market, so they only get paid for energy, not capacity.

The ERCOT grid system in Texas is famous for not having a capacity market. The have been proud of it since they have not had to pay the additional cost. Oops.

Jan de Jong
June 21, 2021 2:15 pm

I doubt 24 hours is enough.

Tim Gorman
Reply to  Jan de Jong
June 21, 2021 4:05 pm

I’d seriously consider 72 hours and certainly no shorter than 48 hours. I would also add a seasonal factor to the calculation.

Jean Parisot
Reply to  Tim Gorman
June 21, 2021 6:28 pm

How would you account for an external federal cap in an arbitrary bid structure?

Pat from kerbob
Reply to  Tim Gorman
June 21, 2021 10:41 pm

In February in Alberta, the wind died for a week due to the same system that then moved south to Texas
At no point in that week did I see a reading above 10% nameplate.
A week

Joe the non climate expert
Reply to  Pat from kerbob
June 22, 2021 7:28 am

As I noted, Wind lost power for a 8-9 period across the entire north american continent, Other grid systems survived because a) better winterization and b) wind / solar penetration was less than 10%

Reply to  Jan de Jong
June 21, 2021 10:12 pm

While dealing with intermittent operation is a serious cost consideration, there are also costs of additional equipment for conversion and regulation that are far from trivial and are, from my understanding of what I’ve read, not born by the wind or solar operators. The same applies, in the majority of cases, of cleaning up the mess when they are done.

Joe the non climate expert
Reply to  Jan de Jong
June 22, 2021 7:20 am

The texas grid crash occurred at approximately 1:30 AM on Feb 15, 2021 due to equipment failure in the natural gas generation that lasted approx 36 hours. with an additional 48 hours to get things back up and running through Feb 18th. This problem was limited to Ercot/Texas

At the same time – ACROSS the ENTIRE North American Continent, Wind and solar wend dead from February 12th through Feb 19th for total of 8 days. A loss of approx 70%-90% of electric generation from wind and solar over a 8 day period.

To repeat, the 70-90% loss of electric generation was over a 8 day period across the entire north american continent, versus a 40% loss of power for a 36 hour period,

Joe the non climate expert
Reply to  Joe the non climate expert
June 22, 2021 7:22 am

I will add that a loss of power generation from renewables of 40%-50% for 2-3 days, at least twice a month is typical in the winter across the world,

Tom Abbott
Reply to  Joe the non climate expert
June 22, 2021 5:51 pm

That’s right. These high pressure systems are a fact of life. Those selling windmils should be asked what they are going to do when the high pressure system shows up and the wind doesn’t blow.

The only way to fix this is to have adequate backup generation to cover for the windmills not producing, but, as was said above, if that has to be the case then why build windmills at all, since the only way they are viable is for the grid to add equal amounts of traditional power generation for each increase in windmills, to make up for the windmills not turning.

Windmills are the problem, not the solution. The Alarmists are Insane.

Matthew Schilling
Reply to  Joe the non climate expert
June 22, 2021 7:32 am

In a sane world, your real world event of a sustained, catastrophic drop in wind and solar power would disqualify them from being a part of baseload.

Richard Ilfeld
June 21, 2021 2:23 pm

After several lifetimes of claiming that fossil fuels don’t bear their full cost because they don’t consider all the relevant costs, ie “pollution”, all of a sudden full cost consideration brings out crickets. Even an innumerate population, however, wont have much trouble figuring our that their power bills are going up–and if the new energy is “cheaper”. ought to be going down. The save the world types are much better off with argument out a hundred years, than they are with next months power bill.

Zig Zag Wanderer
Reply to  Richard Ilfeld
June 21, 2021 3:25 pm

Here in Australia, the increase in costs is blamed on ‘infrastructure’. What is not mentioned is that the use of unreliables needs a great deal more ‘infrastructure’, mainly because it’s all spread out and has to be managed in a distributed manner instead of a centralised one. If it’s not managed properly, it can destroy a grid.

Reply to  Zig Zag Wanderer
June 21, 2021 7:19 pm

But Griff will tell you all you need is more 50’s technology HVDC transmission at the huge cost … oh wait you wanted to decrease your consumer costs.

Last edited 1 year ago by LdB
Gerry, England
Reply to  Zig Zag Wanderer
June 22, 2021 4:25 am

You also have a huge increase in grid management costs in trying to stop the unreliables from trashing the grid. In the UK the costs for this have soared.

June 21, 2021 2:24 pm

And yet another report: CSIRO report confirms renewables still cheapest new-build power in Australia. https://www.csiro.au/en/news/News-releases/2021/CSIRO-report-confirms-renewables-still-cheapest-new-build-power-in-Australia?utm_source=Snapshot-June-2021&utm_medium=newsletter&utm_campaign=Snapshot
“Solar photovoltaics (PV) and wind continue to be the cheapest sources of new electricity generation capacity in Australia, even when the integration costs of renewables are included, according to the final 2020-21 GenCost Report, released today.”
But when you read the details of the calculations of LCOE, nowhere does it show 24×7 dispatchability,and there are assumptions that battery costs will more than halve over coming years. Coal costs are increased by assuming only a year life, versus 25 years for wind and solar, and financing is assumed to be more costly because of the “risks”.

Reply to  Robber
June 21, 2021 3:19 pm

You won’t own anything and you’ll be happy, and you might not have electricity when you need it. You’ll be happy.

Reply to  Scissor
June 21, 2021 10:15 pm

The wire in your brain will insure it.

Christopher Hanley
Reply to  Robber
June 21, 2021 3:20 pm

CSIRO report confirms renewables still cheapest new-build power in Australia, just don’t hold them to it page 2 of the report:
“… To the extent permitted by law, CSIRO (including its employees and consultants) excludes all liability to any person for any consequences, including but not limited to all losses, damages, costs, expenses and any other compensation, arising directly or indirectly from using this publication (in part or in whole) and any information or material contained in it …”.

Reply to  Robber
June 21, 2021 3:24 pm

Fudging the assumptions & variables to reach the conclusions you set out to report is every spreadsheeter’s top trade trick.

But it is patently obvious that today’s “journalists” are blissfully unaware of this tactic.

Dave Fair
Reply to  Mr.
June 21, 2021 3:45 pm

Actually, the “journalists” are aware of and support this tactic.

Matthew Schilling
Reply to  Dave Fair
June 22, 2021 7:35 am

Actually, the “journalists” are [dimly] aware of and [fervently] support this tactic.

Zig Zag Wanderer
Reply to  Robber
June 21, 2021 3:26 pm

And still our electricity costs sky-rocket. Necessarily so, according to Obama.

Reply to  Robber
June 21, 2021 10:15 pm

Do they include the huge cost of subsidies and the twisted regulations that force intermittent operation, and thus higher costs, on thermal sources?

Reply to  Robber
June 22, 2021 6:16 am

The Australian Federal Government has just cancelled a mega “Green” hydrogen proposal in NW Australia due to environmental reasons. I broke out the Champaign. MSM are in tears and hyper-ventilating.

Rud Istvan
June 21, 2021 2:30 pm

This depends on renewable penetration.
Most grids operate with 12-15% excess generation capacity to cover unexpected peaks or outages. A percent or two renewable penetration is no big deal. 10% is, everywhere. Texas got to about 25% without doing anything about dispatchable backup. Very foolish.
Germany solved the problem technically but not economically. They export surplus renewables to Norway on the cheap, allowing Norway to cut back its hydro. Then when Germany needs dispatchable backup, it buys hydro from Norway at exorbitant rates. Norway loves this arrangement. It’s pillaging Germany just like the Vikings did. Classic buy low sell high.

Rory Forbes
Reply to  Rud Istvan
June 21, 2021 2:52 pm

Are you saying that Germans aren’t the smartest people in the whole wide world?

Willem Post
Reply to  Rory Forbes
June 21, 2021 3:03 pm

Being very smart is very close to being very stupid, in most cases.
Add in subsidies, and stupidity wind big time

Willem Post
Reply to  Willem Post
June 21, 2021 3:04 pm


wins big time

Gary Pearse
Reply to  Rory Forbes
June 21, 2021 5:02 pm

It looks like Germans are beginning to get their ‘smarts’ back. Opening new coal ops and completion of the pipeline from Russia shows they are determined to rescue their economy.

What you are seeing, if a translation is needed, is peak renewables in Germany. No one dived deeper into the renewables idiocy and they found it unworkable. Surely even those with lesser smarts will get it. Germany’s ruinables bail out makes it a global one.

Gary Pearse
Reply to  Gary Pearse
June 21, 2021 5:11 pm

Hopefully, this will take down the treasonous crony cap bunch. Captives of the NWO, they may prove to be blind to this eventuality and not bale out in time. After all, it wasn’t smarts that got them where they are. It was having friends in high political office.

Rory Forbes
Reply to  Gary Pearse
June 21, 2021 5:51 pm

One can only hope that abandoning “renewables” will start to catch on before much more land is destroyed and money wasted from them. This AGW insanity has to end some time. The trouble is, too many people have gone all in and pulling out now will be a huge loss of face.

Krudd Gillard of the Commondebt of Australia
Reply to  Rory Forbes
June 21, 2021 6:07 pm

They just want to be thought of as good guys. They do anything they think makes them one of the good guys. It’s a guilt complex thing.

Rory Forbes
Reply to  Krudd Gillard of the Commondebt of Australia
June 21, 2021 8:46 pm

Probably what it is. Sounds about right.

Reply to  Rory Forbes
June 21, 2021 10:20 pm

Aside from all the players making a more than comfortable living from the public trough.

Reply to  roger
June 22, 2021 2:18 pm

It’s a sticky situation. Demand is high, power generation seems to be increasingly unreliable in Texas, the state’s population is continuing to expand rapidly, and changing climates mean that extreme temperatures and weather patterns are here to stay. One possible solution to the problem of electricity demand outstripping supply with more and more frequency is to pay Texans to use less power.

And here we have more muddled thinking; it’s the climate that will give us “extreme temperatures and weather patterns” so ERCOT incompetence can be ignored. Also, lets pay people not to use energy because producing more stable electricity to meet demand is out of the question. Sigh…

Sebastian Magee
Reply to  Rud Istvan
June 22, 2021 1:21 am

Germany is also importing nuclear energy from France

Joseph Zorzin
Reply to  Rud Istvan
June 22, 2021 2:35 am

“allowing Norway to cut back its hydro”
What’s the benefit to Norway of cutting back its hydro?

Rico Suave
Reply to  Joseph Zorzin
June 22, 2021 3:24 am

water can be stored in the reservoir until it is needed by shutting off a turbine in a dam as long as the reservoir is below 100% capacity.

Chuck no longer in Houston
Reply to  Rico Suave
June 23, 2021 9:29 am

When they cut back, they don’t get paid as much. Why would this be desirable for the company?

John Tillman
June 21, 2021 2:31 pm

Winterizing the grid would be pricey, but less so than the spot prices customers had to pay this February.

1) Apply Canadian winter kits to wind turbines.

2) Build insulated, heatable shelters over gas well heads and go back to gas pipeline compressors from electric.

3) Stockpile coal.

4) Build more and modern nuke plants.


Not to forget traveling wave designs.

Winters like 2011 and 2021 can be expected to happen again, possibly more often.

Last edited 1 year ago by Milo
Rud Istvan
Reply to  John Tillman
June 21, 2021 2:50 pm

Texas has abundant natgas. We reanalyzed the ‘official’ LCOE of wind versus CCGT a few years back at ClimateEtc. Used the ERCOT grid for backup and transmission back when wind was ~10% penetration. Searchable Post ‘True Cost of Wind’. Correctly calculated, CCGT was $58/MWh, wind was $146/MWh. Correct answer is no wind at all, but winterize the natgas system and CCGT.

John Tillman
Reply to  Rud Istvan
June 22, 2021 2:17 pm

That would have been ideal, but the wind turbines are now a sunk cost.

Last edited 1 year ago by Milo
Dave Fair
Reply to  John Tillman
June 21, 2021 3:51 pm

And the famous “we don’t even plan for the past.”

June 21, 2021 2:39 pm

Last week on this I posted some comments on air source heat pumps and how it contributed to the Texas fiasco. Since then I have found some more info.

My self I have a geo with a ground loop and supplemental electric and/or propane. With a wood stove and low voltage propane fireplaces for when the electricity goes off.

I researched the newer cold climate air source heat phmps CCASHP. It is basicly a scam from top to bottom how the specs work. From top to bottom the specs are made to decieve. The one number that realy matters is the

Minimum Btu Rateing at the cold operating temperature…..

First try to find it….

I researched one for my house, found a 56K Btu RATED unit. (@57F)

COP is 1.9 at -5 f, hours later, min BTU rating at -5f was only 16K BTU. (Larger units drop of faster)

SENT off a inquiry to several gov/green/who knows rating agencys…

Why the hell would I care about a COP 2 cold when it can only source less the 1/4 of its rated output.

Good way to crash an electrical system when people do not understand….

June 21, 2021 2:56 pm

“…the single biggest part of the cost of those sources. That would the cost of intermittency…” – article

The “cost of intermittency”? Isn’t that another term for “completely unreliable sourcing”???

Just askin’, because nobody likes or wants unreliable sources for their electricity needs, which is the gist of the phrases I’ve quoted above. Unreliable and intermittent show up in the winter, when it’s cold, and there is never any explanation for it from the power company. They just send out the crews and trucks and fix things.

It will be interesting to find out how this whole thing proceeds over time.

Steve Z
June 21, 2021 2:59 pm

It is surprising that an oil-rich state like Texas would try to make renewables 23% of their power grid, instead of using their plentiful natural gas resources to run combined-cycle gas turbines. Perhaps they were trying to prove that they could be greener than the blue states.

Western Texas can be very sunny, and parts of Texas along the coast can be windy, but that’s not enough to support Texas’ large population.

It was also a huge mistake not to winterize their natural-gas facilities, and they maybe thought they were immune from cold weather in south Texas, even though Amarillo and Lubbock routinely get snow every winter, and Dallas usually gets one or two ice storms a year.

Instead of subsidizing wind and solar, it would be wiser to winterize their natural gas plants like their neighbors to the north, so they can still have power when the sun don’t shine.

Zig Zag Wanderer
Reply to  Steve Z
June 21, 2021 3:30 pm

It’s even more incredible that they would, quite deliberately, replace the natural gas driven pumps that actually pump natural gas, with electrical ones that will fail if your grid fails. Sort of building in the failure.

Virtue signalling that k¡lled people.

Reply to  Zig Zag Wanderer
June 21, 2021 4:19 pm

It more than likely it due to tax policy rater than any other reason. I live in the North Dakota oil patch when marginal well were run but the gas coming off the wells. The state wanted sale tax collection on that gas. The accounting nightmare closed down those wells.

Robert of Texas
Reply to  Zig Zag Wanderer
June 21, 2021 5:10 pm

Just so you know…A lot of the natural gas getting frozen in pipes or otherwise stuck in the ground was caused by ERCOT. They put into action an emergency conservation plan that told a list of companies to conserve all electricity possible. No one had ever performed the due-diligence to see what was actually on the list to be turned off…and it turns out a lot of pipe warmers and pumps lost their electricity because of this. This was AFTER companies were forced to change from using natural gas for pumps and warmers to electricity by the Feds – I think that came from the EPA.

Zig Zag Wanderer
Reply to  Robert of Texas
June 21, 2021 5:42 pm

That sounds like government: Mandatory use of a less effective and less efficient process, then constrain that mandated process so it won’t work!

Reply to  Zig Zag Wanderer
June 21, 2021 8:14 pm

They want it to fail. That way they can blame the evil, greedy capitalists, and demand that the system must be government owned.

Reply to  Zig Zag Wanderer
June 21, 2021 10:26 pm

Federal regulations.

Frank from NoVA
June 21, 2021 3:12 pm

“[T]he grid operator should seek only offers of power that are firm and reliable for some reasonable period, say 24 hours at a time. If you want to sell wind power to the grid operator, it’s then on you to also provide the mix of backup sources (could be fossil fuel power plants, could be batteries, could be whatever else you come up with) to make your offer reliable for the requisite period.”

I think that’s reasonable place to start, but can be improved. For instance, why limit a supplier to only providing energy in 24 hour blocks? I think the market solution would be to allow suppliers to bid in (day-ahead? hour-ahead? real-time?) on any basis they wish, e.g., base load, peak, off-peak, weekends, hourly, etc., the only caveat being that, if selected to supply energy, they effing better show up OR ELSE they pay for the actual cost of supply PLUS an appropriate penalty. This is more than manageable for a reliable supplier, but likely an insurmountable hurdle for our rent-seeking friends in the renewable business.

Last edited 1 year ago by Frank from NoVA
Reply to  Frank from NoVA
June 21, 2021 10:48 pm

very short term bids allow them to clobber the reliable source operations because they themselves have so much excess that couldn’t be used, when conditions are good for their kind of operation, that they can practically give away electricity so people with more constant costs haven’t a chance at the market.

Frank from NoVA
Reply to  AndyHce
June 22, 2021 5:02 am

I’m assuming the supply schedule is effectively set in the day-ahead market. If they have that kind of certainty for “their kind of operation”, so be it. We should strive for a level playing field, and for renewables that means no more “must take” type of preferences, which is how conventional generation gets clobbered.

robert Bradley
June 21, 2021 3:12 pm

What could go wrong?

The Federal Power Act of 1935, Public Utility Holding Company Act of 1935, Public Utility Regulatory Policies Act of 1978, Energy Policy Act of 1992, Texas Public Utility Regulatory Act of 1975, Texas Public Utility Regulatory Act of 1995, Texas Electric Restructuring Act of 1999….
The Federal Energy Regulatory Commission (né Federal Power Commission), Security and Exchange Commission, Public Utility Commission of Texas, Electric Reliability Council of Texas, North American Electric Reliability Corporation, National Association of Regulatory Utility Commissioners….

robert Bradley
June 21, 2021 3:14 pm

The Great Texas Blackout of 2021: Classical Liberalism and Electricity


Last edited 1 year ago by Robbradleyjr
Clyde Spencer
June 21, 2021 3:19 pm

… could be whatever else you come up with) to make your offer reliable for the requisite period.

And when a supplier contracts to deliver a reliable source, there should be penalties in the contract if they don’t deliver as promised! They will have to take the probability of failing to deliver into the contract bids. That will make it obvious what the cost of renewables actually is.

Dave Fair
Reply to  Clyde Spencer
June 21, 2021 6:30 pm

All systems designed by ideologically driven bureaucrats are gamed by very smart people.

June 21, 2021 3:40 pm

The easiest way to address energy costs is to force distributors to offer 6 month continuous capacity contracts. The distributors will then work out the details of penalty clauses etc. with suppliers who can’t provide reliable energy. That way consumers are shielded from all but the most extreme energy demand spikes, and renewable operators will be forced to shoulder the full cost of their intermittency. If a fossil fuel or nuclear operator gets stung by this arrangement, maybe they deserve it, for not maintaining their plant properly or purchasing adequate cover in case of down time.

Obviously demand will occasionally spike beyond the capacity contracts, but cashing in on once in a decade demand spikes is not unreasonable. Someone has to pay for spare idle capacity required to satisfy occasional spikes in demand. Consumers can protect themselves from extreme circumstances by buying a generator.

Last edited 1 year ago by Eric Worrall
Reply to  Eric Worrall
June 21, 2021 4:35 pm

Eric I have never understood why suppliers of electricity dont have to supply reliable power

Reply to  Derg
June 21, 2021 5:06 pm

Because you might come to depend on it.

Oh wait . . .

Dave Fair
Reply to  Eric Worrall
June 21, 2021 10:00 pm

Eric, before the “smart” marketing people got involved in deregulating the electric power supply system, regulated utilities were responsible for building or contracting for the output of generation sources and integrating those sources into the system in accordance with established reliability rules at negotiated rates of return. Then the “smart” crony capitalists convinced venal politicians that it would be great if they mandated costly and unreliable generation sources on the hapless public.

The result is that a lot of “smart” people got rich on the backs of taxpayers and utility ratepayers, while forcing electric consumers to suffer outages of various sorts occurring over various timeframes. As usual, though, the perpetrators will not be held accountable.

June 21, 2021 3:42 pm

Climate change causes grid instability.
Climate change being evil, corrupt, and stupid politicans.
Climate change {politicans supporting climate change} causes forest fires- and poverty, human trafficking, crime, and lousy educational system. And lots of other things, elections
which don’t any confidence of being accurate, bad drinking water, and endless list incompetence which ignore by the media. Or perhaps, better to say, climate change = lying evil media and lousy evil politicans.
We living in Ice Age. Have been for last 34 million years.
The only possible “worry” is global cooling. And global cooling takes centuries, so not really
an issue either. But if want to spend a trillion dollars doing anything, what desirable is globe warming. This has always been the case for last 34 million years.

Mike Maguire
June 21, 2021 3:50 pm


We can’t produce enough electricity in TX(and California) for people to heat and cool their homes right now during peak hours as those states transition to less fossil fuels.
So the (Green New Deal) plan is to add to the over burden by adding much more electricity demand from hundreds of millions of vehicles and at the same time………. getting rid or the cheap, reliable, power concentrated and convenient fossil fuels(that are greening up the planet)….. replacing them with very unreliable, diffuse, expensive and environmentally unfriendly wind and solar.
Are we retarded???

        Wind/ solar/batteries      
              18 responses |   
        Started by metmike – May 6, 2021, 9:58 p.m.      

No just gullible and brainwashed by gatekeepers that have taken complete control of a convincing sounding false narrative intended to make us think that the current climate optimum is actually a climate crisis for life on this greening planet and the only way to save the planet………is to eliminate the very thing that is greening it up and causing the climate optimum for life.

Fossil fuels that emit CO2(the building block of life and a beneficial gas that has an optimal level of 900 ppm for plants, over double the current ambient atmospheric level) are greening up the planet and are by far, the greenest energy that could ever exist!!!

100% based on the authentic, proven science:


solar and wind = environmentally unfriendly energy
fossil fuels = GREEN energy

June 21, 2021 4:09 pm

Just from memory, around 20 years ago T. Boone Pickens started building windmills out in the Texas plains. There’s a lot of wind out there, but that wasn’t his reason. He bought a lot of water rights in the Ogallala Aquifer which underlies the region, and he wanted to sell the water to Dallas/Ft Worth, but he didn’t have any right of way for a pipeline. Building the wind farm would give him powerline right of way to Dallas, which he could also use to build his pipeline.

Don’t know how that turned out.

Reply to  Mike McMillan
June 21, 2021 5:52 pm

Wiki seems indicate it didn’t happen:
And somewhat of recent:
After Price Cut, Former Texas Ranch of T. Boone Pickens Now Lists for $220 Millionhttps://www.mansionglobal.com/articles/after-price-cut-former-texas-ranch-of-t-boone-pickens-now-lists-for-220-million-211350
Pickens isn’t on top 100 of US land owners:
And top five are:
No. 1 John Malone 2,200,000 acres2. Emmerson Family [Up 76,500 Acres]
3. Reed Family [Up 291,000 Acres]
4. Ted Turner
5. Stan Kroenke
Once upon a time, Ted Turner was number 1
So place order for wind turbines, but didn’t get powerlines {which would have cost the state billions of dollars].
He gave a lot to charity and died: “September 11, 2019 (aged 91)
Dallas, Texas, U.S.”
{And he believed in peak oil}

H. D. Hoese
June 21, 2021 4:16 pm

This is a list of major Texas coastal freezes– 1820, 1845, 1853, 1868 (perhaps minor), 1880, 1886, 1899, 1917, 1924, 1930, 1940, 1947, 1951, 1962, 1983,1989 (2) and 2021. There have been at least nine minor, but fish killing freezes since 1940, all variable due to atmospheric and other conditions. There are more trees between Texas coast and the arctic, but still mostly flat.

Amazing lack of homework.

Larry in Texas
June 21, 2021 4:33 pm

The reason that SB 1278, as passed by the Senate, died in a House committee is because Senate Business &. Commerce Committee amendments, along with a floor amendment, completely changed the sense of the original bill. I don’t blame the House for holding this bill up, either.

The engrossed Senate bill puts the burden of determining cost allocation of intermittent generation resources “consistent with cost-causation principles” (a hairy term if there ever was one) on the Public Utilities Commission. It only requires the Commission to make intermittent generation resources purchase “ancillary services and replacement power” sufficient to manage variability of electrical load. Instead of having the ERCOT system operator, who would best know how those costs were incurred, handle the responsibility.

Good luck getting the Commission to deliver some kind of reasonable, intelligible rules on that front that deal with real intermittency costs, with the wind and solar lobbies breathing down their necks. The original bill, which assigned actual ancillary costs incurred by the ERCOT system operator directly to wind and solar operators, was by far the better bill.

Last edited 1 year ago by Larry in Texas
June 21, 2021 4:35 pm

I think the socialist label obscures your point. Al Gore is not a socialist. He’s a grifter and the essence of his grift is that he and his fellow travellers are doing it for the planet

Reply to  Barrie
June 21, 2021 8:17 pm

Most socialists are grifters, and they all have their high sounding reasons for why they need to be in charge.

Kyle D
June 21, 2021 4:35 pm

I spent 10 years as the vice president of finance for a small wind farm company. What really surprises me is that no one is talking about the fact that wind turbines are only good for 20 years (30 if you’re lucky) and then they need to be completely dismantled and replaced. I wonder if they’re putting that into their financial analysis, especially when looking over a long period. If a natural gas-powered electricity generating plant can last one hundred years, assuming regular maintenance and replacing parts as required, what are those costs compared to building, maintaining, and dismantling a wind farm (that can generate the same amount of electricity and taking into account the intermittency) 3 to 5 times over the same time period?

June 21, 2021 5:15 pm
Robert of Texas
June 21, 2021 5:17 pm

If you have to have 100% backup electrical power sourced before you can sell your intermittent power, then why bother to build the intermittent power in the first place. It’s much cheaper to just build the reliable energy source.

The only way solar and wind power is cheaper is if you add in all the subsidies they require, plus all the guarantees that can can sell all their power and that they move to the front of the seller queue…etc. There *IS* no even playing field. If it were an even playing field there would be no intermittent power except for the odd niche use.

There seems to be a run on portable and house backup generators in Texas. People are fed up with the incompetence being demonstrated by our State Government, and especially the ERCOT council of idiots.

Reply to  Robert of Texas
June 21, 2021 5:59 pm

“If it were an even playing field there would be no intermittent power except for the odd niche use.”

Absolutely and wind could be useful for desalination plants that add to fresh water supplies. As for windmills to pump underground water for stock watering farmers and graziers in Oz worked out some time ago solar pumps were more economic. As for the mums and dads all sold a pup with their rooftop solar feeding into the grid there is an economic use for them right now with diversion to electric storage HWS-
Hot Water PV Diverter Comparison Table (solarquotes.com.au)
It just requires some honesty and integrity by the climate changers fessing up that they got it badly wrong with the use of unreliables and overlooked the fallacy of composition problem.

June 21, 2021 5:46 pm

I like the proposed language for the bill. I hope this all moves forward as a really good test case with honest data.

John Sandhofner
June 21, 2021 6:20 pm

I like the solution where the wind and solar folks are on the hook to make sure the electricity they contracted to provide is available should their system not perform as well as bid on. Their would take the risk to provide the energy at a price they would negotiate with someone who is backing them up.

John Dueker
June 21, 2021 7:12 pm

Good discussion but this statement is wrong, “The state of Texas, with its own power grid separate from the rest of the country”. Texas has 5 DC ties to the US and Mexico.

From ERCOT DC tie operating instructions,
There are two (2) commercially operational DC-Ties between ERCOT and the Eastern Interconnection:

• North (DC_N) located near Oklaunion
• East (DC_E) located near Monticello

There are three (3) commercially operational DC-Ties between ERCOT and CFE:

• Eagle Pass (DC_S) located near Eagle Pass
• Railroad (DC_R) located near McAllen
• Laredo (DC_L) located near Laredo.

They are 220 mw 600 mw 36 mw 150 mw and 100 mw.

If you look at the map in the document at http://www.ercot.com/mktrules/guides/procedures/ERCOT%20DC%20Tie%20Operations%20V3Rev8.doc
It graphically shows connection around the state.

Reply to  John Dueker
June 21, 2021 11:02 pm

Surrounding states were not quite a bad off as Texas last February (they all have a smaller percentage of “renewables” penetration) but they had no excess to sell to Texas.

john rattray
June 21, 2021 9:11 pm

Nice idea, shame it will not work.

Electricity generation follows load, which is not forecastable hours in advance. Consequently forcing anyone to guarantee a certain level of generation hours or days in advance as proposed is simply nonsense unless you can also guarantee load hours or days in advance. No happening.

Requiring generators to honour their bids is not a bad start and requiring electricity retailers to have sufficient firm contracts in place to supply their customers is another good idea. Both can be achieved through standard contract conditions including penalties, leaving the market to sort out the mechanisms

For instance, if the wind dropped during a bid period a wind farm would be on the hook for either substantial penalty payments for failing to deliver or would call on a firming contract to make up the difference. If rolling power cuts were introduced due to lack of supply the electricity retailer would be required to compensate those who were cut off for their losses. Value of Lost Load figures in Australia are around $35,000 AUD per MWh which gives an idea of what retailers should be up for.

June 21, 2021 10:54 pm

It would be interesting to analyse the generator market trend in the countries where people have to endure renewable power generation intermittency :


With not only financial consequences but also increased true air pollution (not the EPA fake CO2 pollution) due to suboptimal electricity generation.

Vincent Causey
June 21, 2021 11:47 pm

They’ll find out the cost of intermittency soon enough, when they get near 100% wind/solar.

Tom Abbott
Reply to  Vincent Causey
June 22, 2021 6:22 pm

They will never get close to 100% wind/solar.

This pipedream will blow up in their faces long before then. It looks like it’s blowing up a little bit now, at 25% wind/solar.

June 21, 2021 11:57 pm

Wind and solar have zero ability to respond to load demand at any time of day or year. They produce completely independently of consumer demand. That alone should rule them out. Cost is irrelavent. They are unsuitable.
The energy source is the slave to the load in every electrical circuit, not the other way around.

Joseph Zorzin
June 22, 2021 2:37 am

The damage to the environment by installing large scale wind and solar are never counted.

Bruce Cobb
June 22, 2021 3:29 am

The elephant in the room is that there is not now, nor was there ever, a valid reason to introduce Ruinables into our electricity supply, and without the “carbon” scam, they never would have been.

willem post
June 22, 2021 4:07 am


This article shows there are at least 6 major categories of cost of wind and solar.

Per standard Wall Street practice for tax-shelters, the cash value of the subsidies is about 45% of the project turnkey cost, which includes the costs of:

1) Financing,
2) Subsidies,
3) Owner’s return on investment.

The subsidies are “front-loaded”, i.e., about 40% is recovered by GMP in the first 5 years, the other 5% in the remaining years, i.e., skimming the fat off the milk in the early years, and long-term increased costs for ratepayers and taxpayers.



Cost Shifting from Owners to Ratepayers and Taxpayers
The owning and operating cost of wind, solar and battery systems, c/kWh, is reduced by about 45%, due to subsidies. However, because no cost ever disappears, per Economics 101, the subsidy costs are “socialized”, i.e., added, in one way or another, onto:
1) The rate bases of utilities, i.e., paid by ratepayers
2) Taxpayers, by means of extra taxes, fees and surcharges on electric bills and fuel bills
3) Government budgets
4) Government debt
5) Prices of goods and services other than electricity
If the subsidies had to be paid by owners of wind and solar systems, the contract prices paid to owners would need to be:

– At least 19.3 c/kWh, instead of 11 c/kWh, for large-scale solar
– At least 15.5 c/kWh, instead of 9 c/kWh, for ridge line wind. See table 1 and URL

Shifting Grid Costs 
Many small-scale solar systems and/or a few large-scale solar systems on a distribution grid would excessively disturb the grid, especially at midday. Battery systems, with sufficient capacity could counteract the output variations of those solar systems.
Wind and solar systems could not be connected to the grid without the services of the CCGT plants, i.e., shutting down CCGT plants, and artificially diminishing/obstructing their domestically produced gas supply, advocated by pro RE folks, would not be an economic option for decades, if ever, because of the high costs of battery systems.

1) The cost of extension/augmentation of electric grids to connect widely distributed wind and solar systems (not paid by wind and solar system owners)
2) The cost of services rendered by other generators, mostly CCGT plants, which counteract the ups and downs of weather/season-dependent, variable, intermittent wind and solar outputs, 24/7/365 (not paid by wind and solar system owners).
3) The cost of battery systems to stabilize distribution grids, due to variations of the solar and wind system outputs (not paid by wind and solar system owners).
Shifting Owning and Operating Costs 
The combined effect of cost shifting, determined behind closed doors, increases a project’s annual cash flow, i.e., “left-over-money”, to provide an ample profit for the RE system owner.
RE system owners are happy, having the “ears” of friendly politicians, saving the world from climate change, and claiming: “See, my project is profitable and competitive”, while everyone else gets hosed.

1) Grants from various sources, such as the VT Clean Energy Development Fund
2) 26% federal investment tax credits, plus state FITs. Tax credits reduce, dollar-for-dollar, the taxes GMP pays on profits
3) 100% depreciation over 5 years; the normal for utilities is 20 to 25 years. Write-offs reduce GMP taxable income
4) Deductions of interest on borrowed money. Interest deductions reduce GMP taxable income. 
5) Various O&M payments are waved, such as sales tax, fees, property tax, school tax, municipal tax, etc.
6) RE system owners sell their output at two to four times NE wholesale market rates, which have averaged about 5 c/kWh starting in 2009, courtesy of:
– Low-cost, low-CO2, very-low-particulate, gas-fired CCGT plants
– Highly reliable, very-low-CO2, zero-particulate, nuclear plants
– Low-cost, very-low-CO2, zero-particulate, hydro plants Canada.
 All-in Cost of Wind and Solar
Pro RE folks always point to the “price paid to owner” as the cost of wind and solar, purposely ignoring the other cost categories. The all-in cost of wind and solar, c/kWh, includes:

1) Above-market-price paid to owners 
2) Subsidies paid to owners
3) Owner return on invested capital
4) Grid extension/augmentation (not paid by owners)
5) Grid support services (not paid by owners) 
6) Future battery systems (not paid by owners)
Comments on table 1
– The owners of legacy systems were paid much higher prices, than owners of newer systems. 
– Vermont legacy “Standard Offer” solar systems had greater subsidies, up to 30 c/kWh paid to owner, than newer systems, about 11 c/kWh
– Wind prices paid to owner did not have such drastic reductions as solar prices.
– Vermont utilities are paid about 3.5 c/kWh for various costs they incur regarding net-metered solar systems
– “Added to the rate base” is the cost wind and solar are added to the utility rate base, which is used to set electric rates.
– “Traditional cost”, including subsidies to owner and grid support, is the cost at which traditional is added to the utility rate base
– “Grid support costs” would increase with increased use of battery systems to counteract the variability and intermittency of increased build-outs of wind and solar systems.
1) The prices should be compared with the NE wholesale grid price, which has averaged about 4.2 c/kWh, starting in 2009, due to low-cost CCGT and nuclear plants, which provided at least 65% of all electricity loaded onto the NE grid in 2019.
– Wind, solar, landfill gas, and methane power plants provided about 4.8%, after 20 years of subsidies
– Pre-existing refuse and wood power plants provided about 4.6%
– Pre-existing hydro power plants provided about 7.4%
– The rest was mostly hydro imports from the very-low-CO2 Canada grid, and from the much-higher-CO2 New York State grid

2) There are O&M costs of the NE grid, in addition to wholesale prices. 
ISO-NE pro-rates these costs to utilities, at about 1.6 c/kWh. Charges for: 
Regional network services, RNS, are based on the peak demand occurring during a month
Forward capacity market, FCM, are based on the peak demand occurring during a year.

3) Each local utility has its own O&M grid costs, in addition to item 2, some of which are detailed on electric bills.
4) Vermont utilities buy electricity from various sources; average cost about 6 c/kWh, plus ISO-NE charges of about 1.6 c/kWh, for a total of 7.6 c/kWh. 

See table 1 in article, which I was unable to post in this comment

Patrick MJD
June 22, 2021 4:27 am

Don’t get Chuck Norris started.

June 22, 2021 7:07 am

I already costed this 2 years ago. It isn’t so hard to get close to reality. 10 x the LCOE cost if including battery backup in the UK. Pumped storage is cheaper on LCOE because it lasts longer. £50Billion per TWh for both. Presented as a cost of the grid. Only necessary because of renewable intermittency. Turbine interia delivers enough stability for free for a dispatchable energy powered grid. JUst a tint bit of pumped storage to cope with emergencies and grid rebooting

The reality doesn’t change because what controls this are the laws of physics, not the laws of men (should that be “people” now?), that can only distort markets at the expense of consumers, to the profit of insiders. It is here….


“An electric read”, Puns Weekly. “The public must not be allowed to read this paper” Renewable Energy Federation. “It helped me a lot, really effective ” Insomniacs UK.

“If you can get through the winter on nuclear…. you don’t need renewables” Sir David MacKay FRS, Chief Scientist to the UK DECC 2008 – 2014. Words of wisdom.

Reply to  Brian R Catt
June 22, 2021 12:43 pm

“The reality doesn’t change because what controls this are the laws of physics”

A lot of these politicians seem to think that if it’s a “law” they can legislate a change in it, even laws of physics.

Matthew Schilling
June 22, 2021 7:39 am

Hopefully, Randall Mills will save us from the Leftist Luddites.

June 22, 2021 8:17 am

Many companies use Service Level Agreements (SLA) where the paying party states what they expect. The supplying party agrees to supply said amount and if you can not meet the SLA levels you pay a cost. When structured well, SLAs provide an easy to understand performance and cost parameters for any business contract.

Jeffery P
June 22, 2021 8:27 am

Texas does not hold utilities liable when they fail to deliver enough electricity. Penalizing companies that do not produce a contracted minimum would solve a lot of problems. Texas also pays for wind and solar generation even when it’s not needed. Fix that as well.

Joseph Z
June 22, 2021 8:33 am

They count on people not bothering to do basic Math. In the Wiki for Cost of Electricity by source they have “solar PV (fixed) – $1060/kW (utility)”. However this needs to be combined with battery storage which is “battery storage power – $1380/kW.” However, if you are generating 1 kW for use you need to generate a second kW for storage. This gives a final cost of combined solar/battery of $3500/kW.

Mike Maguire
June 22, 2021 11:14 am

The same weather pattern that causes major heats waves usually results in very little change in the surface pressure gradient. Little to no wind! Plenty of sun though.

In the winter, you never know. For sure a very weak, low angled sun…..and less of it compared to summer but the wind is extremely variable.

Yeah, that’s exactly the problem.

June 23, 2021 12:34 am

I like that idea – the total cost of variable fuel source generation (including the costs of spinning reserve)

John Garrett
June 23, 2021 6:45 am
Last edited 1 year ago by John Garrett
June 23, 2021 8:18 am

it is an interesting idea but has several operational problems:
1) It requires non-renewable energy sources to be operated by renewable energy providers.
2) Calculation and attribution is extremely difficult and slow. This is a particularly an issue when trying to calculate to 24, 72 or even 1 week windows.

What would be a lot easier would be monthly or quarterly capacity factor commitments – failure to deliver which would allow the utility to pass through its higher costs to providers in the form of reduced payments.

Yes, this would not solve the recent Texas freeze issue but would at least be both transparently manageable and – primarily – create an outlet and incentive for all power providers to have some consequence to failures.

Sometimes that’s all that can be reasonably done.

John Garrett
June 23, 2021 3:08 pm

The ginormous ripoff of Texas taxpayers and ratepayers:

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