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The wind isn’t blowing, but does Texas care? Why electricity prices are staying stable

Despite a poor month for wind generation, ERCOT is managing to keep electricity prices in check thanks to its increasingly diverse fuel mix.
The wind isn’t blowing, but does Texas care? Why electricity prices are staying stable
Enel's High Lonesome Wind Project in West Texas. The 500 MW wind farm is the largest in Enel's global portfolio. (Courtesy: Enel)

What do you do when the wind won’t blow?

It’s a question Texas is being forced to address amidst a miserable month for wind generation, but the initial answer lends a promising prognosis to ratepayers. So far, electricity prices have remained stable despite nearly one-quarter of ERCOT’s generation profile being hampered by Mother Nature.

According to preliminary data from the U.S. Energy Information Administration (EIA), wind power in the contiguous United States produced only 302,615 megawatt hours (MWh) on Tuesday, July 23. That’s the lowest amount since… The day before, when wind power produced 335,753 MWh. Six of the 10 worst days for wind power this year have been this month (July), but previous to this week’s abysmal totals, there hadn’t been a comparably bad day since October 4, 2021.

Wind farms are on track to produce an average of just 4% of power generation this week, down from 7% last week and 12% so far in 2024, per the EIA.

So how are electricity prices fairing in ERCOT territory, which counts on wind for 28% of its fuel mix in Q2 2024? Well…

“A paradigm shift in terms of price forecasting” may sound strong, but “boring days” are far better than blackouts. Boring days are welcomed in any territory, especially during the heat of summer.

Of course, ERCOT isn’t relying entirely on renewables to keep electricity prices in check- far from it. In the lower 48, gas-fired power plants are producing an average of 48% of generation this week, up from 46% last week, according to the EIA. U.S. plants generated 6.9 million MWh of electricity from natural gas in the lower 48 states on July 9, 2024, probably the most on any day in history, says the EIA.

Texas has generally lingered between 30,000 and 40,000 MWh of natural gas generation over the last week.

The stable pricing is not just ERCOT passing gas, though (sorry, had to).

ERCOT’s commitment to diversifying its fuel mix deserves recognition, as energy research scientist Joshua D. Rhodes points out:

Rhodes’ graph makes it easy to see how rapidly solar and wind are driving coal (and to a lesser extent, natural gas) out of the fuel mix. The fact that solar is expanding nearly twice as quickly as wind generation did in Texas is likely a testament to the success of the IRA and to the staying power of the industry (and all that land fit for utility-scale installations) .

In totality, the data indicates we may have reached a tipping point- hopefully, one that keeps electricity prices stable.

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