Texas: Clean Power Powerhouse – 9/12/16

The Texas electricity market hit a milestone in Feburary when nearly half the power flowing onto the grid came from wind turbines demonstrating what a clean powerhouse the Lone Star state has become

Though it is still a leader in the oil and gas industry, a key player in hydraulic fracturing adoption, Texas has dominated in wind energy like no other. The state added more wind-based electric generation capacity than and all other states combined. It surpassed even California in total renewable energy generation added with its wind alone.

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Wind turbines accounted for 16% of the state’s electrical generating capacity as of April, but now Texas is anticipating a huge surge in solar power as well.

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The fight over climate change and the necessity of clean power may still be going on, but Texas’s free-market-based electricity system doesn’t seem to be paying it any mind. Even state officials, who favor the hands-off approach, say wind and solar are set to play a major role in the state’s energy future even when federal subsidies begin to decline.

The road that took Texas to its current transformation was a free market-oriented deregulation. Deregulation cost many utilities their monopoly power over generation, transmission and retail sales of electricity, and introduced competitive auctions for wholesale power. The deregulation plan was signed by former President Bush, and included a government-imposed requirement to have at least 2,000 MW of renewable generating capacity by 2009.

Texas blew past that goal in 2005, as well as a new goal of 10,000 MW by 2025 set by then Gov. Perry; it passed the 2025 goal in 2011.

Texas officials ignored global warming when presenting the program. Instead, they framed it as a jobs producer and a means of getting more money flowing to rural counties. In the end, it did that much and more as Texas retail electricity prices have fallen the average U.S. price over time. The state now has more than 100,000 people working in renewable energy, according to the Texas Workforce Commission.

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Yet, the change hasn’t come without some trouble. Early on, electric-system users spent billions to build transmission lines from windy West Texas to cities. There was also the problem of integrating a intermittent power supply when the grid requires a balance of supply and demand at all times. In addition, wind projects get hefty federal payouts for whatever they generate meaning that they can undercut the business model of fossil-fuel generators. Critics point out that the decommissioning fossil-fuel plants prematurely could lead to instability if infrastructure cannot keep up or if declines in subsidies have a greater negative impact than expected.

Federal subsidies are scheduled to shrink, but the falling costs of solar and wind technology have done as much, if not more for adoption rates. Solar costs are down 48% since 2010, according to the Solar Energy Industries Association. Those reductions are expected to continue consistently with technological advances and greater economics of scale.

Texas grid operator, ERCOT, expects explosive growth in solar with one analysis suggesting that the recent extension of the federal solar tax credit could lead to as much as 19,000 MW of solar capacity being built within 15 years. Texas could go from 10th place among states in solar capacity to second in the next five years, according to the Solar Energy Industries Association.

“The cost has come down to the point where people can really see the value,” said Cris Eugster, the chief operating officer for San Antonio’s utility, CPS Energy.

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