The Implications of Texas's Capacity Market

The capacity market in Texas presents a significant barrier to expanding the state's power generation capabilities, particularly for renewable sources like solar. Although solar power is thriving in certain areas of Texas, the current regulations prevent the construction of power plants that could provide electricity during peak demand times, particularly in the evening when air conditioning usage surges. This limits the ability to scale up energy production in response to the rapid industrial and population growth experienced in the state over the past 35 years. As a result, Texas may face the difficult decision of seeking federal assistance to stabilize its energy supply, which would involve relinquishing some control over its regulatory framework.