With Texas facing soaring electricity demand, the politics of energy quietly shift at the Capitol

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Four years ago, after all electricity sources struggled to keep Texans’ lights on during Winter Storm Uri, the state’s top Republican leaders singled out solar and wind energy for scorn as they worked to goose natural gas-powered generation.

After decades of growth in solar and wind put Texas among the nation’s top producers of renewable energy, the state’s leaders turned against renewables as they began to compete more fiercely with coal and gas-fueled power.

At the same time, anti-renewables rhetoric swelled nationally as well as part of a broader fight over combating climate change — which climate scientists say has led to more severe weather in Texas and increased risks to life and property.

But with this year’s legislative session underway, the political tides around energy are quietly turning in the country’s biggest oil and gas state.

Texas faces a massive surge in demand for electricity due to an increase of large users like crypto mining facilities, in addition to population growth and more extreme weather. And policymakers are recognizing that in order to meet that demand, the state will need all the generation it can get — from every source.

“Here in Texas, we believe in an ‘all-of-the-above’ energy approach,” Gov. Greg Abbott said in December, touting Texas as the fourth-largest oil producer in the world and the leading state for wind and large-scale solar generation. “We will increase capacity of our grid to ensure that every Texan has affordable, reliable power and unleash the full potential of Texas’ nuclear industry. And we will produce enough energy power on the grid to make sure that every home, every business and every location is going to have access to the power they need.”

The recent expansion of renewable energy in Texas has helped stave off crises since the grid came close to catastrophic collapse in February 2021 when Uri plunged millions of Texans into darkness and left hundreds of people dead.

Texas increased its energy supply by 35% over the last four years, Abbott said in his State of the State address in February. A whopping 92% of that new supply, according to energy consultant Doug Lewin, came from solar, wind and battery storage.

Texas added more battery storage capacity than any other state last year, and, excluding California, now has more battery capacity than the rest of the country combined. The state installed around 9,700 megawatts of new solar generation last year and 1,735 megawatts of wind power, according to a January report by the Federal Reserve Bank of Dallas. Solar power and battery storage set records last summer, providing nearly 25% of electricity needs in the middle of the day, according to the Dallas Fed’s report.

Texas also added 3,410 megawatts of gas-fueled power last year after losing 2,172 megawatts in 2023. The Electricity Reliability Council of Texas, the state’s main grid operator, estimates that 1 megawatt of electricity can power around 250 homes.

These additions meant that ERCOT didn’t have to issue a single emergency alert last year during the sixth-hottest summer on record in Texas. In 2023, during the state’s second-hottest summer, ERCOT issued 11 alerts asking Texans to conserve energy.

The grid also made it through several cold snaps this winter with plenty of supply on hand — though experts warn that solar plays a smaller role in meeting peak demand during the winter. Weatherization requirements the Public Utility Commission imposed on power plants after Winter Storm Uri also contributed to greater resiliency on the grid.

On top of increased reliability, renewable energy resources saved Texas power consumers around $11 billion in the last two years, according to a report by IdeaSmiths LLC, an energy analytics firm, that was funded by pro-renewables trade groups.

“These resources materially contribute to having enough power on the system and also being able to do it most affordably,” said Bryn Baker, senior director of policy innovation at the Texas Energy Buyers Alliance. “Being able to maintain the ability for all resources to play in the market is critical for Texas to maintain its energy leadership, as well as economic leadership.”

Energy demand expected to soar

Despite those gains, ERCOT predicts that Texas’ energy demand will nearly double by 2030, with power supply projected to fall short of peak demand in a worst-case scenario beginning in summer 2026.

That surge in demand is being driven by population demand, more extreme heat and cold, and an influx of large power users, such as crypto mining facilities, artificial intelligence-related data centers and electrifying oil and gas field operations.

State lawmakers have looked to boost natural gas-fueled generation — in 2023 they established the $5 billion Texas Energy Fund, which offers low-interest taxpayer funded loans to incentivize construction of new gas-powered plants. But those plants take years to build. New advanced nuclear technology at scale is also years away, even as the state’s top leaders throw their support behind the burgeoning industry.

As a result, experts warned, Texas can’t afford to block any forms of generation, including renewables.

“We’re going to need every megawatt that we can get, from every generation resource that we can get,” Michael Jewell, an energy attorney and expert, said. “Legislative proposals that would discourage the continued development of every resource — that’s anti-energy.”

Renewable energy advocates hope that message is getting through to lawmakers as they grapple with how to meet soaring demand this legislative session. They emphasize that they are not against gas-fueled generation, and that Texas needs a mix of resources to grow its grid.

“I think, and I hope, and I pray that the conversation has changed,” said Matthew Boms, executive director of the Texas Advanced Energy Business Alliance. “With those kind of numbers, the whole conversation changes from, ‘What should the mix look like?’ to a different conversation, which is how we’re going to meet all of this load growth.”

Renewable energy projects benefit lawmakers’ districts

Renewables proponents also point to the millions of dollars in tax revenue that solar, wind and battery storage projects funnel into local school districts and communities — many of them in the districts of key lawmakers.

In House Speaker Dustin Burrows’ district — which includes parts of Lubbock and its surrounding counties — existing solar, wind and storage projects are projected to pay around $94 million in local tax revenues over their lifetimes, according to the IdeaSmiths report.

The district of Sen. Charles Schwertner, R-Georgetown and chair of the Senate Business and Commerce Committee, is poised to see $499 million in local tax revenues from existing solar and storage projects. And Rep. Drew Darby, R-San Angelo and chair of the House Energy Resources Committee, represents a district expected to see $293 million in local tax revenues from renewable energy.

Those dynamics — demand growth, the role of renewables and storage on the grid and the economic impacts of the industry — suggest that the Legislature may be less inclined to clamp down on solar and wind this year as lawmakers have tried to do in previous sessions.

“We are actively exploring and promoting advanced technology, including small modular nuclear reactors, larger duration battery storage and geothermal energy,” Schwertner said at the ERCOT Market Summit last month. “These technologies and others offer unique advantages in providing stable, dispatchable power, and Texas is committed to leading in their deployment.”

Anti-renewables bills resurface

Still, anti-renewables sentiment has not gone away in the Capitol.

“There’s certainly ideological opposition. It’s very serious,” Lewin said. “The Legislature walked right up to the edge of really kneecapping the renewable industry last session. I’m sure those discussions will be weighty this session — but I hope not.”

Lawmakers have filed a number of bills that would restrict the development of renewable energy or favor natural gas generation in the energy market.

For example, a proposal by state Sen. Lois Kolkhorst, R-Brenham — and co-sponsored by state Sen. Phil King, R-Weatherford, the vice chair of the Senate Business and Commerce Committee — aims to reduce the impact of wind and solar projects on residential neighbors and the local environment by imposing strict permitting and siting requirements and restricting tax abatements for those projects.

The bill, Senate Bill 819, would not apply those standards to other energy facilities, such as natural gas or coal plants. A near-identical bill passed the Senate in 2023 but failed to advance in the House.

Renewables advocates warned that the bill would sharply curtail new wind and solar development, unduly interfere with the energy market and step on the private property rights of landowners to lease their land out for energy projects.

Senate Bill 388, filed by King, aims to offset the impact of federal incentives to build wind and solar projects by requiring 50% of new generation to be “dispatchable” — namely, natural gas and coal.

Dispatchable generation can be turned on at any point and does not rely on intermittent resources like sun and wind. Lawmakers have emphasized a need for dispatchable resources to offer greater reliability when grid conditions are tight.

But at least one lawmaker, in addition to industry trade groups, expressed skepticism at a Senate Business and Commerce Committee hearing Tuesday that the bill would effectively boost natural gas and increase reliability.

The bill represents “a heavy-handed, prescriptive recipe for what the market should build,” Sen. Nathan Johnson, D-Dallas, said, “cutting off the investment and innovation that the private sector can bring to this market.”

Mark Stover, executive director of the Texas Solar + Storage Association, testified to the committee that the bill would have a “destabilizing effect” on the energy market.

“While the bill may seem straightforward,” Stover said, “we believe it could produce unintended consequences that could actually increase costs on consumers and undermine reliability.”

Other legislative proposals would specifically tax renewable energy projects and bar offshore wind facilities from connecting to the grid.

Lawmakers aim to boost grid’s growth

Beyond legislation related to the type of energy on the grid, lawmakers are more broadly focused on how to meet demand growth.

Senate Bill 6 — a priority bill of Lt. Gov. Dan Patrick, who presides over the Senate and wields enormous power over which legislation is approved — aims to firm up the state’s energy demand forecast, more fairly allocate the costs of building out necessary transmission infrastructure and ensure that existing generation is not removed from the grid to serve large industrial users. House Bill 2678 looks to support the development of advanced nuclear technology in the state, in line with Abbott’s and Patrick’s priorities.

Lawmakers have also proposed measures to increase consumer protections, including by tightening oversight of third-party solar panel sellers, re-establishing a low-income electricity bill assistance fund and requiring that new battery storage projects have safe removal and disposal plans at the end of their lives.

As the clock ticks on the remaining months of session, Lewin said, lawmakers will have to decide whether they want to focus on pushing down, or building up, certain resources.

“There's only 140 days — you don’t really have enough time to do both,” he said. “Building up a nuclear industry in Texas will take a lot of good legislative thinking and focus and attention. I hope that they focus on stuff like that — and not on punching down at renewables.”

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