Either the Texas grid is highly reliable, or the sky is falling.

Spoiler alert: bet against the latter.

A June report from the Texas Reliability Entity (which has federal statutory responsibility to report on Texas’ grid risks) shows that the ERCOT grid is increasingly reliable. That’s mostly because of solar and battery storage additions to the state’s energy portfolio.

It also directly contradicts a report from President Trump’s Department of Energy, released about a week later, which said Texas faces a severe and shocking likelihood of outages every year — including this year.

Meanwhile, in the real world, ERCOT expects to approach record peak demand next week. Again, thanks to the state’s booming solar and storage resources, ERCOT forecasts that we’ll have 35 more gigawatts than we need when demand peaks.

What gives?

Solar and Storage Is Powering the Grid

In its report, the Texas Reliability Entity writes:

The Region’s reliability performance remains strong while navigating [many] challenges. … The Region’s resources managed extended high summer peak periods in 2024 (as in recent years), helped by new solar generation and energy storage. Annual energy production increased (alongside renewable generation output and peak renewable penetration levels) to meet projected peak loads. As a result, the Region did not experience any Energy Emergency Alerts related to insufficient responsive reserves in 2024 [emphasis added].

Yes, no matter what anti-energy politicians or activists say or believe, Texas’ abundant solar and battery storage resources are helping meet our booming demand. But don’t just take the word of the entity whose one job is to ensure Texas grid reliability …

ERCOT CEO Pablo Vegas told the ERCOT Board just last month, “The risk of emergency events during [peak demand] periods is shrinking, dropping from over 10 percent a year ago to under 1 percent.”

Vegas — again, the CEO of ERCOT — also said, “The peak in the summer, of course, is in the afternoon at the peak heat, when air conditioning load is at its highest. Solar energy is very well suited to help support that.”

And the Chairman of the Public Utility Commission of Texas, Thomas Gleeson, said much the same late last year: “Solar and storage are key for reliability in this state,” Gleeson said. “We need them to be successful.”

He added that solar and storage “saved us this summer.” He was speaking of 2024; it’s almost certain to be true this summer as well.

Yet President Trump’s Department of Energy reached a very different conclusion – thanks to deeply flawed assumptions and methodology.

What the DOE got wrong

First and foremost, the DOE assumes that only “Tier 1” energy generation projects will be built over the next six years. These are projects that are so far along that they’re almost certain to be completed. Texas has about 29 gigawatts-worth of them (see graphic below).

The thing is, Texas has added 50% more than that to the ERCOT grid in just the last four years.

There are 112 gigawatts-worth of projects — nearly four times as much as is in Tier 1 — in Tiers 2 and 3, just waiting to graduate. The DOE assumes that none of that will get built.

Unfortunately, the DOE report comes on the heels of the catastrophic new federal budget law (the apparently unironic “Big, Beautiful Bill”) that was designed, especially with subsequent executive actions, to hobble renewable energy projects in Texas and around the country.

Maybe that’s the reason for the DOE’s pessimism about the Texas grid: it’s like a doctor mocking the health of a patient after cutting off the patient’s medicine.

The DOE report seems to describe a state of energy scarcity that the administration and Congress have created. Given the regulatory uncertainty they’ve injected into the process, a shortage of Tier 2 and Tier 3 projects might become a self-fulfilling prophecy.

The graphic below is from the North American Electric Reliability Corporation’s (NERC’s) Long-Term Reliability Assessment, published in December last year. It shows more than 100 gigawatts of generation in Tiers 2 and 3. It also shows steadily rising reserve margins — the amount of supply in excess of demand represented in the blue bars — as additional Tier 2 and 3 capacity is brought online.

But because the President has directed the Treasury Department to make it as hard as possible to qualify for tax credits, many of these projects won’t get built to service rapidly rising load growth.

They’re literally creating energy scarcity in place of energy abundance.

What We Talk About When We Talk About Coal

Why would the administration make such a big bet on such dubious numbers?

The clear implication is that officials are scrounging for excuses to force inefficient coal and gas plants to keep running, no matter how bad they are for consumers and grids. As Princeton energy modeler Wilson Ricks told Canary Media: “This report seems designed from the ground up to justify keeping coal plants open with emergency orders.”

Of course, old coal plants are far from reliable. As TRE noted in their report, and as shown in the chart below, forced outages of conventional generation are up significantly in recent years. Forced — that is, unplanned — outages at gas and coal plants are up 50% compared to ten years ago.

Indeed, old gas and coal plants are among the least reliable generation resources in existence.

What’s the Plan?

DOE’s shoddy analysis also doesn’t bother with a prescription. Clinging to aging, unreliable power plants is a Band-Aid at best.

Worse, there’s a worldwide shortage of gas turbines right now. If you order a turbine today, you’ll get it a year or two after President Trump’s term ends. Gas plants aren’t coming to save us.

Nuclear power also can’t deliver the amount of electricity we need, at least not until well into the 2030s. To be clear, I’m excited about new nuclear plants. There’s real hope there for clean, constant power … but not in the next few years. The technology simply can’t scale that fast.

So, seriously, where does anyone — including the Trump administration — propose getting the new electricity that America is going to need to power rising demand from AI data centers, industrial electrification, and increasing extreme heat?

Texas is a place to look for answers. ERCOT expects to integrate a mix of renewables, storage, gas peaker plants, and demand response programs in coming years to meet the state’s aggressive demand growth projections. Texas is also on the front lines of energy waste reduction: the PUC and ERCOT’s Energy Waste Advisory Committee will soon take that crucial issue up, per requirements that the legislature approved this year.

Vegas, ERCOT’s CEO, has been a consistent defender of the state’s competitive energy market and its ability to meet the state’s energy needs. In a House Committee on State Affairs meeting this year, state Rep. Rafael Anchia asked Vegas whether “market forces exist today, absent heavy government involvement, for us to meet load forecast?” (That’s a load forecast showing a 75% increase in peak demand in five years, by the way.)

Vegas’s reply: “The market, as structured today, is very well suited to support the growth trajectories that we're seeing increase in the state of Texas.”

And it’s working. The U.S. Energy Information Administration says the wholesale cost of power in ERCOT is 15% below the national average — all while reliability in Texas has improved:

The Trump administration should be looking for ways to support these market forces. Instead, with the budget bill, executive orders, and now a misleading DOE report, it’s undermining them.

We Need More Supply

Texas Governor Greg Abbott rightly bragged in his State of the State speech this year that the ERCOT grid’s generating resources grew by 35% over the past four years.

Of that growth, 92% came from wind, solar, and storage.

Unfortunately, the President and Congress just passed a law that makes it much harder to add new supply. That reduces grid reliability.

It’s kind of perfect that the DOE released its doom-and-gloom report just days after the bill was signed. It’s a self-fulfilling prophecy, foretelling a future of energy scarcity, higher prices, and lower reliability that the administration itself is creating by throttling the renewables that our state and nation increasingly need for economic growth..

Their report is not a representation of current reality or trends; it’s a window into the world they’re creating.

When we get there — when you’re spending more than you can afford on less reliable power — remember who to thank.

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Ep. 79: Revive a Dormant Friendship