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.
Texas Renewable Energy Summit Summary
On September 18 through 20, some of the most influential figures in the Lone Star State’s renewable energy sector came to Austin for the Texas Renewable Energy Summit. Participants discussed state of affairs in the “embarrassment of riches” – that is Texas fossil fuels and renewables as well as what the future may hold given some current political uncertainties.
Transmission Tangles in the Permian
Permian Oil/Gas production has been on the increase for a while, and that means electricity demand is growing. Peak electricity demand in the heart of the Permian Basin (Ector, Winkler, Loving and Reeves counties) jumped from 22 MW in 2010 to more than 200 MW in 2016. ERCOT projects that it will exceed 500 MW by 2021.
While ERCOT approved two new 345-kV this past June, transmission lines aren’t going to be hung over night as planning alone can take nearly two years. Transmission congestion problems will continue to increase electricity prices, especially if demand continues on its projected course of growth.
At the same time, the Permian Basin is the hotbed for Texas solar development. While some argue that policy makers are reticent to hang wires to help oil/gas development, connecting up solar farms to ERCOT’s grid is makes more sense because solar power output reaches its peak from the sun’s intensity at about the same time all that sunshine is ratchets up air conditioning demand. ERCOT has about 1 GW of solar capacity in place so far. One fly in the ointment is the pending case against foreign PV panels with the U.S. International Trade Commission which could inflate the price of solar panels.
If west Texas solar capacity brings more transmission capacity, it could probably be used to slake the demands of regional oil/gas operations. Of course, one kind of cringes at the irony of a fossil fuel company setting up a power purchase agreement with a solar farm.
Coal Plants Drowning in Red Ink & Natural Gas
Vistra Energy owns three coal fired plants, operated by Luminant, — Big Brown, Martin Lake and Monticello, which totals to almost 5.3 GW of capacity. Back in the old days of regulated electricity, these coal plants would fire up and run almost non-stop — which was what they were designed to do. Now, however, because of the need to be agile in a demand-response market, coal-fired plants must be operated to cycle from minimum to full load daily or start up shut down daily. All those swings on temperature causes enormous thermal stresses and eventually, parts of the power plant to break. Those outages increase plant operations and maintenance costs and reduce productive run time. With these costs increasing and the price of electricity decreasing due to cheap natural gas, these old plants eventually lose their viability. On October 6, Luminant announced it would close its Monticello Power Plant near Mount Pleasant in January, 2018. In preparation for this (and probably other retirements), Vistra Energy has been acquiring nearly 7.5 GW of natural gas generation. Texas currently has 7 coal fired power plants totaling 8,100 MW of capacity and none are thought to be financially viable.
Texas DER Still A Coming Thing
With ERCOT still studying Distributed Energy Resources (DER), finding ways to encourage their growth and figuring out an equitable way for them to get onto the grid is still under discussion. One area of concern is how net metering and other buyback policies are not consistent throughout the deregulated market with only a few retail providers offering to buy back customer generation either directly or through partnerships with solar developers. With that in mind, efforts by the Sierra Club to change residential building codes across Texas to make them more “solar-friendly” sound like an uphill battle. But several Texas cities, like Austin, Houston, and San Antonio have already made “solar ready” ordinances part of their building codes for new homes. On the corporate side, with more companies adopting sustainability practices and goals, more Texas corporations are shopping for renewable energy power purchase agreements as well as additions to their buildings which can be included in ERCOT’s eventual DER inventory. A recent example is a 8.79 MW solar installation on the roofs of four parking garages belonging to Toyota’s new North American Headquarters in Plano.