Texas bill supports dispatchable resources, excludes energy storage

The Texas Senate is considering a bill that appears to shun utility-scale batteries by requiring at least half of new power plant capacity to provide dispatchable electricity from technology other than battery energy storage systems (BESS).

Bill SB 388, would apply to new generation beginning next year in the Electric Reliability Council of Texas (ERCOT) region. It originally mandated the 50% threshold come from natural gas, but was amended to require “dispatchable generation other than battery energy storage.”

The bill establishes a “dispatchable generation credits trading program” under which utilities, power generation companies and electric cooperatives would be required to offset new battery and renewable capacity with an equal amount of new dispatchable capacity. Power companies that exclusively operate battery energy storage resources are exempt from the program.

“Battery energy storage is the most flexible resource on our grid — allowing us to quickly deliver affordable power when it’s needed most,” Daniel Giese, the Texas state director for Solar Energy Industries Association (SEIA), told pv magazine USA. “In fact, energy storage is the fastest-responding dispatchable resource with the ability to discharge power in milliseconds, charging and discharging multiple times a day.”

“If that’s not dispatchable power then I don’t know what is,” Giese said. “The simple fact is Texas needs every resource on the grid to keep prices low for consumers and meet the demands of future population and business growth.”

Giese said Texans will be “far more vulnerable to grid outages” if new generation is limited to a small number of facilities. He added, “Solar and storage are flexible and can be built almost anywhere, creating a critical backstop for the grid.”

Public Citizen, a nonprofit consumer advocacy organization that “champions the public interest in the halls of power” testified against the bill saying the threshold should be for “dispatchable resources” not “dispatchable generation.” The consumer advocacy group said that while the grid needs dispatchable energy resources, “we are not aware of any study by ERCOT … or any other entity that had determined that proportion to be optimal, or even an improvement from the status quo.”

“Maintaining a reliable electric grid is a complex technical challenge. Solutions should be well-grounded in analysis of the relevant facts,” Public Citizen said.

The bill poses a power play in a state booming with renewables investments. Excluding California, Texas has more battery storage than the rest of the United States combined, according to the US Energy Information Administration.

The majority of Texas residents from both sides of the aisle believe solar paired with battery systems would make the grid more reliable and resilient, a survey by the SEIA, Global Strategy Group, and North Star Opinion Research found last year.

Texas’s ample land and low-key regulation environment have made it easier for developers to enter the state’s energy storage market, the Texas comptroller says. Added to this are plunging costs of lithium-ion batteries, found by BloombergNEF analysis and the Inflation Reduction Act’s tax incentives, and energy storage’s position in the free market is bound to boom. 

Whether Governor Abbott will sign off on the bill if it passes the House remains uncertain. In December, the governor hailed the state’s achievements in both oil production and wind and utility-scale solar generation. He added, “Here in Texas, we believe in an ‘all-of-the-above’ energy approach.”

From pv magazine USA.