Houston Republic

The recent winter storms that battered Texas and left millions of residents without power has left the future of the state's wind energy industry uncertain, critics say.

They note that that the recent winter storms exposed the danger of energy policies that make the state too dependent on wind and solar energy.

“Beyond the weather, environmental policies that have been pushing renewable energy across the country and in Texas for a long time are largely keeping the Texas grid from providing reliable power,” Bill Peacock, policy director at Energy Alliance, told Lone Star Standard.

The extreme cold and snow caused the wind turbines to freeze, leading to power outages across the state during a time of overwhelming demand for energy.

“What's contributing is that we're relying on wind and the turbines are frozen as well as that we're relying on solar and there's no sun shining,” Peacock said. “We could have a reliable natural gas backup in place but we don't. All three of those are related to the renewable energy policies in Texas and in the United States.”

As millions of Texans went without power during a freezing winter storm, Electric Reliability Council of Texas (ERCOT), which operates the state's electric grid, actually requested that power providers statewide shed even more power to "curtail load," according to Austin News.

Besides the damage in consumer confidence, the industry also faces a financial crisis as a result of the winter storms, according to The Wall Street Journal.

In order to get construction financing, many Texas wind farms enter into contracts with financial institutions, such as a Wall Street bank, where they agree to provide a steady stream of power, WSJ reports. If they cannot meet energy demands, the wind farms must purchase electricity on the wholesale market to make up the difference.

In return, the financial institution agrees to pay a set price for the electricity which can be resold on the state’s wholesale power market.

Under normal conditions, the cost per megawatt hour is between $0 and $50, National Wind Watch reports. The average price in 2020 was $22.18. But during the February outages, as wind turbines froze from the extreme cold and freezing rain, the price spiked massively to $9,000 per megawatt hour, which the wind farms were obligated to purchase. 

A midsize wind farm realistically could end up owing upward of $50 million as a result of the recent power catastrophe and could be forced to seek bankruptcy protection or even lose their wind farms to their lenders, National Wind Watch states.

Texas lawmakers are trying to determine what course to follow about this financial fallout.