In July 2026, electricity demand in Texas shot past the existing record of 85.5 gigawatts previously set and reached 91.1 gigawatts due to the intense summer heat. ERCOT, the utility firm in the state, “effortlessly” handled this demand without having to appeal to the public to conserve energy. This feat was attained thanks to battery storage, wind and solar installations.
The regulations governing electricity in Texas were designed to favor energy sources that were the cheapest. In the past, this used to be methane gas and coal. The wholesale prices of electricity were therefore based on the baseline cost of producing energy from these sources.
However, wind, solar and battery storage have gained traction in the state to the extent that they now provide electricity at the lowest cost among the available sources. The utility firm therefore bases its wholesale prices on the cost of these low-cost sources when setting its wholesale prices.
The effects have been remarkable. Electricity costs have gone down for homes and industrial users, and the supply has grown so much that it is no longer necessary to issue conservation notices during times of peak demand. Battery storage has ensured that excess energy is stored and is available for use when demand peaks.
This is a far cry from what happened back in 2021 when Winter Storm Uri wreaked havoc on the grid, resulting in blackouts in order to ration what was available.
Times have changed, and Texas serves as a shining example of what renewables can achieve when paired with battery storage. However, politics is rearing its head and is seeking to thwart this progress.
In Texas, Republicans are the majority in the legislature, and they are strongly linked to the oil and gas industry within the state. The fossil fuel industry spearheaded the effort to have utility wholesale rates determined by the cheapest power source. At the time, these were methane gas and coal. This rule therefore favored them, until it didn’t.
The rise of renewables and battery storage tilted the balance of power and fossil fuels became a more expensive energy source, so these are being paid for at rates determined by the cost of producing electricity from wind and solar. The barons aren’t happy.
They attempted to have a bill, SB 715, passed. This legislation aimed at compelling renewable energy producers to have a backup system producing energy from coal or methane gas. The bill didn’t see the light of day, and the attempt to change the rules to again favor fossil fuels failed.
These skirmishes are playing out nationwide with varying degrees of success. Federal policy during this Trump administration has also added major headwinds to the progress of the renewable energy and battery storage industries.
However, the benefits of battery storage, wind and solar energy are speaking for themselves, and it is getting harder for detractors to find anything bad to say about the energy transition. It is therefore likely to get easier for firms like Tesla Inc. (NASDAQ: TSLA) that are major players in the battery storage industry to expand their footprint and serve more communities.
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