Most Texans already know that the state’s fortunes were and are fueled by oil and natural gas. What many don’t realize, however, is just how much the future of the Lone Star State will be powered by renewable energy. With the Green Energy in Texas series, we will explore various aspects of the green energy industry and keep you informed on how those changes and innovations might affect your Texas electricity bill.
GE Layoffs Show Strong Renewables Impact
General Electric’s announcement that it is cutting 12,000 jobs in its electrical power division has shown the impact on renewable energy generation world wide. GE cites the worldwide demand reduction for its turbines due to the rise of renewable energy sources. Most of these job cuts will be overseas in its turbine manufacturing division which makes turbines for natural gas and steam generators. In their press release, GE stated, “Traditional power markets including gas and coal have softened. Volumes are down significantly in products and services driven by overcapacity, lower utilization, fewer outages, an increase in steam plant retirements, and overall growth in renewables.”
In a related note, GE Hitachi Nuclear Energy announced on December 14 they would be laying off workers at its North Carolina plant.
Another major turbine maker, Siemens AG, is also facing slackening demand for it’s fossil fuel powered turbines. Siemens announced last month it would cut 6,900 positions worldwide and close factories due to sluggish demand for its power-plant equipment. Analysts have said this is one more sign that the power industry is struggling with the change. One Siemens board member commented, “The market is burning to the ground.”
Will Texas Wind Power Overtake Texas Coal?
Ironically, both GE and Siemens are two of the world’s biggest wind turbine manufacturers. GE’s wind turbine and other renewables demonstrated a 13% year-over-year increase for the first 9 months of 2017. Plus, with the continuance of the wind production tax credit in Congress’ current tax overhaul bill and additional negotiations in the works, there is a good possibility that wind power will attract more investors in coming years.
That’s a bit of well-timed good news for Texas because it comes on Luminant’s announced closing of three coal-fired generators and confirms October’s announcement by UT Austin’s Energy Institute that wind generation will overtake coal generation in ERCOT in 2019.
How Long Will Texas Solar Be Relevant For?
A recent report by the Dallas News pointed out that Texas added 227 megawatts of solar capacity in just over the past three months. That’s enough to light up 44,000 Texas homes. Yet, Texas, in spite of its abundant sunshine, only ranks 7th nationally with a nameplate generating capacity of less than 1%. Compared nationally, the U.S. added more than 2,000 megawatts of solar capacity during the third quarter. Solar account for 25% of new generation capacity during the first three quarter of 2017, second only to natural gas additions.
The news also shows there’s still lots of hustle in the Texas solar biz the looming uncertainty on the regulatory horizon.
Back on October 31, the U.S. International Trade Commission (ITC) unanimously ruled on the charges of solar panel dumping by Chinese companies brought by Suniva and SolarWorld Americas, both of which are bankrupt. The ITC recommended a tariff of 6¢/watt on imported solar cells and 10-15¢/watt per panel.
The ITC called the U.S. solar manufacturing industry “injured” by the cheap imports. Ironically, a prime example of that impact can be found in Suniva’s bankruptcy declarations where it is spelled out that Suniva had relied heavily on Chinese parts and manufacturing for its own line of panels.
Before the case went before the ITC, Chinese companies relocated their factories to other Southeast Asian countries, including Malaysia, Vietnam, and Thailand, to evade possible tariffs as those countries had not yet been specified by the complaint. Meanwhile, solar companies in Singapore and Canada were never involved in the dumping complaint stand to reap the most benefit as they will practically have the U.S. solar market to themselves, tariff-free.
However, no tariffs will take effect until President Trump makes a decision in early January on the ITC’s recommendations. For Texas solar installers, these next couple of weeks will be fraught with apprehension for the coming year as solar panel prices could rise and demand for home solar could fall.