Texas’ power grid is holding up. Thank wind and solar energy | Opinion

This summer’s record-breaking heat around the country has exposed a major vulnerability in the U.S. economy: our outdated electricity grid.

From factory slowdowns to data center outages, the cost of unreliable power is mounting. The Atlantic Council estimates that extreme heat alone could shave more than half a percentage point off our gross domestic product by 2030.

For business leaders, the energy grid is an operational and financial risk. But it also represents a massive investment opportunity.

While much public conversation suggests renewables aren’t reliable enough, the data tells a different story. In the middle of last summer’s brutal Texas heat wave, wind and solar combined to supply nearly 40% of the state’s electricity on several peak-demand days, and the grid never buckled.

The state’s grid operator, the Electric Reliability Council of Texas, credited the system’s reliability to a surge of new batteries, improved forecasting for renewable energy generation and new ancillary services to support the grid. What may have sounded fanciful a decade ago in the capital of oil and gas is now one of our best examples of disruptive energy innovation.

The real threat to energy reliability isn’t renewable energy — it’s a grid that hasn’t adapted to how that energy is generated, stored and used.

Solar panels and wind turbines are variable but not inherently unreliable. Their output rises and falls with the weather, but the swings are predictable and manageable. Modern tools such as lithium-ion batteries can store the power and inject it into the grid as conditions change.

Demand response programs reward large electricity users for scaling back usage during spikes, offsetting the need to build more generation. Where these tools are in place, renewables already dominate the supply stack without blackouts.

California is a telling case. Since 2020, the state has added about 12 gigawatts of battery storage — enough to power 400 auto factories or hospitals for four hours. In 2023, the California Independent System Operator managed the hottest September on record without issuing a single Flex Alert, a public call to conserve power during peak periods.

Renewables provided more than 60% of peak demand, while battery discharges filled the gap as solar faded later in the day. Grid reliability improved, even as fossil fuel use declined. Once an annual ritual, there hasn’t been a Flex Alert in years.

Other innovations are capitalizing on this new perspective of what reliability looks like on a modern grid. Emerald AI, for instance, is turning on-site batteries at data centers into grid assets, acting as “virtual power plants” that balance renewable energy supply and demand in real time. Regional power-sharing and better forecasting tools are shrinking the margin of error.

Despite these successes, skeptics warn that unless renewable energy is backed by fossil fuels, the power might not be there when we need it. But gas and coal plants are not the fail-safe they are made out to be.

In the 2021 Texas blackout, frozen gas wells and pipelines — not wind turbines — triggered the crisis. Fuel-supply failures have also hobbled coal and gas plants during Midwest cold snaps and Southwest heat waves. Even when fuel is available, thermal plants need minutes or hours to ramp up; batteries and flexible loads react in seconds.

Costs making renewable energy competitive with natural gas

Lazard’s 2025 survey finds that battery storage is now cost-competitive with new natural gas peaker plants for meeting peak demand. Even if federal tax credits expire after 2032, battery costs are falling faster than turbine costs, positioning storage as the faster, cleaner and increasingly cheaper option for grid flexibility.

Texas, improbably, offers a glimpse of the future, where renewables and reliability can grow together. From January to May of this year, 37% of the state’s electricity came from low carbon sources (wind, solar and nuclear) — up from 27% six years ago. Over the same period, the grid set 15 new demand records and met every single one.

So, the question is no longer whether clean energy can power the economy — it already does. The question is whether we will modernize our infrastructure to let renewables shoulder even more of the demand.

For business leaders, the implications are clear:

• Grid risk is business risk: Extreme heat and outdated infrastructure threaten operations, productivity and growth.
• Flexibility beats fossil backup: Batteries and demand response are now faster, cleaner, and cheaper than new gas peaker plants.
• Invest in resilience: On-site storage, smart loads and participation in virtual power plants are becoming core business strategies.
• A modernized grid is essential: Business leaders must advocate for grid upgrades and regional integration — the real bottleneck is the grid, not renewables.

If a state like Texas — long defined by its fossil fuel legacy — can build a cleaner, more resilient grid, then the rest of the country can, too. The real test now is whether business, utilities and policymakers choose to fix the grid we have or keep searching for comfort in the fuels of the past.

Daniel Vermeer is an associate professor at the Fuqua School of Business at Duke University in Durham, North Carolina.