The Houston Chronicle reports that Texas is facing policy uncertainty regarding advanced energy deployment at both the federal and state levels. Matthew Boms, Executive Director of the Texas Advanced Energy Business Alliance (TAEBA), pointed to the Lone Star State's soaring electricity demand, emphasizing the importance of using a wide array of advanced energy solutions to meet new load growth.
Eyes on the Texas Legislature
For now, most of the projects lining up to connect to the ERCOT grid are renewable.
Nearly 156 gigawatts of solar and 169 gigawatts of battery storage have applied to connect to the grid, according to ERCOT data. In contrast, only 32 gigawatts of natural gas power plants have applied, despite a $5 billion state program supporting development.
Though not all pending projects will be built, the data is still a sign of the changing composition of ERCOT’s grid. Or, some state lawmakers say, it’s an imbalance that must be corrected with government intervention.
Senate Bill 388, filed by Sen. Phil King, R-Weatherford, sets a goal for 50% of electricity generation capacity installed in the ERCOT region after Jan. 1, 2026 to be “dispatchable.” The term refers to resources such as natural gas, coal and nuclear power plants for which electricity output can be adjusted on demand. Battery storage is excluded from the bill’s definition, even though ERCOT considers the resource dispatchable.
If state regulators determine that dispatchable resources may provide less than 55% of all new generation capacity installed after the start of 2026, developers whose projects are less than 50% dispatchable would have to buy “credits” from other companies building dispatchable resources, King explained in a Senate committee hearing this month.
This would provide another revenue stream to developers who’ve lagged in building new natural gas power plants, in part because the influx of cheap renewables on the ERCOT grid has depressed wholesale electricity prices.
“You're going to see this serve as an offset to the federal credits (for renewable energy),” King said during the hearing.
Another set of bills, Senate Bill 819 and its companion House Bill 553, would exercise “the police power of this state” to regulate renewable energy development. The bills would require companies building solar and wind resources to seek a permit with the Public Utility Commission of Texas — a new process no other type of power plants has to go through.
Solar farms would have to be built 100 feet away from any property line, unless the developer obtains written permission from the landowner. The required distance for wind farms would be 3,000 feet, or over half a mile. Other pending bills seek to add permitting and setback requirements for battery storage projects.
Sen. Lois Kolkhorst, R-Brenham, lead author of the Senate version, said she’s “a lifelong wildlife conservationist” who’s heard from many constituents with valid concerns about renewable energy development. She added that Texas has existing laws regulating land leases by municipalities which prohibit oil and gas wells from being drilled within 200 feet of a private residence or in "thickly settled" areas.
The bill, filed alongside nine other Republicans and one Democrat, “offers a common-sense approach to the encroachment of wind and solar facilities being scattered across our great state with no consideration or safeguards for landowners or the environment,” Kolkhorst wrote in an email statement.
Rep. Jared Patterson, R-Frisco, author of the House bill, declined to comment.
Matthew Boms, executive director of the Texas Advanced Energy Business Alliance, said the bills could not only slow renewable development but deter companies from building in the state at all. Boms’ trade group represents renewable energy companies.
“These bills would really be industry killers if they pass into law,” he said.
In 2023, a similar version of Kolkhorst’s current bill passed in the Senate. Its companion bill ultimately died in the House; in return, renewable industry lobbyists agreed to exclude solar, wind and battery storage projects from Texas’ replacement for Chapter 313, a problematic corporate tax break program.
This year, without the Chapter 313 bargaining chip, the bills most concerning to the renewable energy industry could have an easier path to passage.
But Boms, offering a “glass half full” viewpoint, noted there’s another major change from 2023: ERCOT has since warned peak electricity demand could roughly double in the next decade.
“That's changed a lot of perspectives on energy, because we're just going to need every megawatt that we can get. We're not in a position to be cutting out technologies at this point,” Boms said.
The Texas Legislature has until June 2 to consider new legislation.
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