Texas GOP bills take aim at battery storage sites as industry worries about ‘supply squeeze’

Texas battery site operators were ready to demystify grid storage for lawmakers this legislative session — but they’re facing a fight instead.

With data centers, artificial intelligence, extreme weather and population growth creating a voracious appetite for power across Texas, Republicans have filed bills that would create new hurdles for the battery, solar and wind projects needed to carry the load.

While the president’s action doesn’t have immediate impact in Texas and will be challenged in court, his action makes clear his party’s priorities: More oil and gas and less renewable energy.

“It’s concerning because we need all the power we can get,” said Luke Metzger, executive director of advocacy group Environment Texas.

Battery storage has boomed in Texas and, along with solar and wind, has been credited with helping the statewide electric grid keep up with demand increases that are outpacing the addition of traditional generation, which takes longer and is more expensive to build.

By this summer, the state grid operator says, Texas battery storage sites will be harnessing enough energy to power 2.5 million homes during extreme weather. Texas already leads the country in wind generation and recently surpassed California for building the most utility-scale solar.

But among the more than 2,300 bills filed by Texas lawmakers this session are proposals for a state-level permit process for battery sites and to give regulators with the Public Utility Commission of Texas final authority over construction of new battery, wind or solar farm sites.

Such regulations don’t exist for gas-fired or even coal-powered plants, which are rapidly dying out.

‘The right information’

Lawmakers say their goal is safety, and the new wave of energy generation needs more check-ins along the way.

“There have been multiple instances of battery storage facilities going into tiny rural towns that simply do not have the safety infrastructure to protect citizens if something did happen,” said Rep. Ellen Troxclair, a Republican from Lakeway who filed a permitting bill. “I just want to make sure battery storage facilities are appropriately sited.”

The buzz around such regulation ahead of the session prompted the battery industry to create its own interest group to help educate Texas lawmakers. It’s called the Lone Star Energy Storage Alliance.

“Part of our job this session is to make sure that people have the right information,” said Stephanie Smith, a battery company executive who’s chairing the new alliance. “A lot of misinformation could potentially wind up in some of these bills. We want to give people the data and the studies so they can start to think of them as an overall solution for load growth.”

Battery sites have some residents of rural communities, especially, on edge as they point to battery fires in California and worry about storage sites being built in their backyards.

GOP bills also propose giving counties the ability to ban a battery site within a quarter-mile of homes and require setbacks from property lines. One would impose new fees and environmental studies for all solar, wind and battery sites.

So, while the industry was looking forward to good-faith discussions with lawmakers related to safety and environmental impacts, its leaders say bills filed veer beyond reasonable regulations and suggest restrictions that would be harsher than those faced by traditional generation sources.

Their adoption could slow down renewable resources coming online in Texas, Metzger said. That could impact business in a state now known for bringing new generation of all types to market more rapidly because of less red tape than in most other states.

“At the end of the day, some of this legislation would grind renewable energy to a halt,” he said.

Threats to grid

While the state is trying to spur development of gas-fired plants with a taxpayer-funded low-interest loan program, those plants still take longer to build and are more costly then their renewable generation and storage counterparts. The bulk of new megawatts in the state’s energy queue already is solar and batteries.

“Curtailing the construction of the majority of the generation that is asking to come online in the next few years, that’s going to put Texas in an extreme supply squeeze,” said Bryn Baker, policy director of the Texas Energy Buyers Alliance. “That’s going to directly threaten the reliability of the grid.”

Her group represents more than 260 large and small employers across Texas, including heavy hitters such as Walmart and major tech companies like Microsoft that are building power-hungry data centers. Such companies are attracted to Texas by multiple factors but say they need to know the juice is going to be here to support their needs — and they want that power at the lowest cost.

“We’ve seen a whole slew of bills introduced that appear to be written to dramatically curtail the additions of renewables and battery storage resources onto the grid,” Baker said. “The bottom line is that’s going to affect the bottom line. That is going to cost consumers significantly.”

A study her group recently commissioned found renewable energy saved Texans $11 billion in energy costs in the past two years and saved commercial customers 9% in power costs since 2010.

Battery sites have been coming online steadily. Already, Texas has at least 121 sites providing nearly 8,000 megawatts of power. The number of sites could more than double in the next five years, according to planning data from the U.S. Energy Information Administration.

The juice is needed: The Electric Reliability Council of Texas has estimated total demand on the statewide grid it operates could be near 150 gigawatts by the end of the decade. Capacity will be about 115 megawatts by this summer, according to ERCOT. Most estimates say it takes about 1 megawatt to power 250 homes on an extremely hot or cold Texas day.

Batteries pair well with renewables like wind and solar. They’re like sponges that soak up extra power when the sun is shining on solar panels or the wind has towers cranking out megawatts. They can release that power when capacity is tight or demand high — quickly dispatching electricity in the early morning before the sun comes up. That’s a period when the grid is most at risk for outages during periods of extreme weather. They have also been key contributors on hot summer evenings.

During close calls or high demand periods, ERCOT often relies on batteries to provide power to prevent emergencies. That happened during last week’s  severe cold spell. When demand soared Tuesday morning, about 4,000 megawatts of battery power provided a boost that was needed to keep the grid supplied.

Safety concerns

Troxclair, the lawmaker from Lakeway, said her aim is ensuring battery storage sites are located in places that allow safe operation.

Pointing to a site being planned in the Hill Country near a dead-end road, for example, she said a battery fire could leave residents with no way to evacuate. Her bill calls for battery locations to be forbidden if there aren’t at least two accessible evacuation routes.

“We can support diversity in resources without putting residents’ safety at risk,” she said, adding that she views gas-powered plants as a more reliable option for the Texas electric grid.

As it stands, Troxclair said counties or state regulators aren’t able to weigh in on locations for battery sites. Her HB 1343 would charge the state’s Public Utility Commission with permitting sites before they could begin selling power on the ERCOT marketplace.

Troxclair and a vocal group of Hill Country residents also worry about battery sites catching fire, emitting toxic fumes and spreading flames.

Kendall and Kerr counties recently agreed to set up an intra-county planning commission aimed at discussing battery storage. The commission would have limited power, commissioners said, but give residents an avenue to speak out.

Residents and lawmakers point to a recent fire at the massive 5-year-old Moss Landing battery site in California as among the reasons they view the new technology as risky. The Jan. 16 fire closed roads and forced more than 1,500 people to evacuate.

Local officials in California said everyone was evacuated safely and about 75% of the fire was out by the next morning. The evacuation order was lifted the next day.

Battery fires or explosions can be caused by thermal runaway, a chain reaction that occurs when a cell overheats. It can happen because of a defect, contamination from humidity or dust, improper electric input and other factors. Lithium battery fires burn hot and do release harmful chemicals. They’re difficult to extinguish so are usually left to burn themselves out.

“There are plenty of battery storage facilities around the state that are located in areas that do have the appropriate degree of safety,” Troxclair said. “They just need to go in the right locations — not in teeny tiny communities.”

‘Disingenuous’ rules

Amid booming growth of the industry across the U.S. — the number of storage sites increased 25,000% since 2018 — there have been 20 fires or related incidents across the U.S. in the past decade.

So far, no Texas battery site or public safety agency has reported such an incident.

Texas operators typically target locations near existing substations to receive and ship out power, or close to transmission chokepoints that need the support batteries provide.

Smith, chairwoman of the Energy Storage Alliance, said fires or explosions are rare and, when they do happen, don’t spread outside the site itself due to site safety standards that have improved since early fleets were first built in California.

Baker, of the Energy Buyers Alliance, said all energy sources have fire risks — and many cause greater damage than batteries. In September, for example, a gas line explosion in a Houston suburb caused a fire that burned for four days, causing evacuation orders. In that case, homes and cars were damaged.

Beyond that reality, business and industry are counting on Texas to acquire the power needed to support rapid economic and population growth and the overall reliability of the grid, she said.

That generation makeup must include gas-fired plants, energy experts say. But the cost and time to build them means they’re not enough to meet the state’s forecasted growth in demand and transmission needs. Renewables are required.

“We support good-faith rules that are going to allow communities to integrate these resources,” Baker said. “But bills that are disingenuous or discriminatory don’t make communities safer.”