A new Aurora study finds SB 715 & HB 3356 could force the re-contracting of hundreds of projects, push up 5 GW of wind offline and leave a firming capacity shortfall by 2026
Austin, TX (AURORA ENERGY RESEARCH)—A new analysis from Aurora Energy Research, a leading global provider of power market analytics, found that Senate Bill 715 (and companion House Bill 3356), currently under consideration in the 89th Texas Legislature, would reduce reliability of the Texas power grid while increasing electricity costs for consumers if enacted.
The proposed legislation would retroactively impose firming requirements on renewable energy facilities, potentially creating an unsustainable market and forcing the premature retirement of up to 5 GW of wind generation capacity by 2026. Texas law currently mandates that firming requirements apply only to facilities with interconnection agreements signed after January 1, 2027. However, SB 715 & HB 3356 would update it to apply retroactively to hundreds of existing projects, requiring them to quickly secure contracts that demonstrate seasonal reliability. This unexpected shift creates new legal and regulatory risks for investments in Texas.
The report finds that by 2026, only around 12 GW of suitable firming capacity from thermal generation would be available for contracting, meeting just 50% of the required demand. This imbalance is likely to drive up contract prices, ultimately increasing consumer electricity costs.
In addition to higher prices, the early retirement of wind assets would reduce capacity at a time when demand is rising, weakening system reliability. Although new thermal generation could eventually help bridge the gap, projects of that scale typically require three to four years to complete. As a result, even if construction began immediately, these facilities would not be ready in time to prevent the shortfall.
Despite the intent of SB715/HB3356 to firm generation capacity, Aurora’s analysis shows it would instead increase costs and reduce the reliability of the Texas’s grid.
Olivier Beaufils, Head of USA Central at Aurora Energy Research, commented:
“Rather than strengthening the grid as intended, the retroactive requirements in SB 715 would create new legal and regulatory risks, negatively impacting reliability while also increasing electricity prices for Texans. This bill is likely to discourage investment in new generation at a time when demand is only increasing.”
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sarah.hrovat@auroraer.com
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Established in 2013, Aurora Energy Research is a leading global provider of power market forecasting and analytics for critical investment and financing decisions. Headquartered in Oxford, England, we operate out of 16 offices worldwide covering Europe, North & South America, Asia, and Australia.
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