Quantcast

Texas Wind and Solar More Competitive Than Natural Gas

Fracking

Environmental Defense Fund

By Colin Meehan

An interesting fact seemed to go unnoticed in all the press around the Electric Reliability Council of Texas’s (ERCOT) Long Term System Assessment, a biennial report submitted to the Texas Legislature on "the need for increased transmission and generation capacity throughout the state of Texas." ERCOT found that if you use updated wind and solar power characteristics like cost and actual output to reflect real world conditions, rather than the previously used 2006 assumed characteristics, wind and solar are more competitive than natural gas over the next 20 years.

This might seem a bit strange since we've been told for years by renewable energy skeptics that wind and solar power can't compete with low natural gas prices. Let me back up a second and explain what's going on here, and what it means for both the energy crunch and Texas' ongoing drought.

Every two years since 2005, ERCOT has used a series of complex energy system models to model and estimate future conditions on the Texas electric grid. This serves a critical function for legislators, utilities and regulators and others who need to prepare for changes as our electric use continues to expand and evolve. As with any model of this kind, the assumptions are critical: everything from the price of natural gas, to the cost to build power plants and transmission lines. Facing an acute energy crunch and given that solar and wind costs have come down a great deal since the first study in 2006, ERCOT dug a little deeper into their historical assumptions and developed a version of the model that used current, real-world cost and performance data for wind and solar power. 

What they found was astounding: without these real-world data points, ERCOT found that 20,000 MW of natural gas will be built over the next 20 years, along with a little bit of demand response and nothing else. Once they updated their assumptions to reflect a real-world scenario (which they call “BAU with Updated Wind Shapes”) ERCOT found that about 17,000 MWs of wind units, along with 10,000 MW of solar power, will be built in future years.

In addition to demonstrating the economic viability of renewable energy, these results show two drastically different futures: one in which we rely overwhelmingly on natural gas for our electricity, and one in which we have a diverse portfolio of comparable amounts of renewable energy (which does not use water) and natural gas.  All of this is crucial to keep in mind as the Legislature, Public Utility Commission and ERCOT evaluate proposals to address resource adequacy concerns and the impacts of a continuing drought on our state’s energy supply. 

Finally, one ERCOT statement in particular stands out from this analysis, in direct contradiction to renewable energy opponents who say that renewable energy is too expensive: “The added renewable generation in this sensitivity results in lower market prices in many hours [of the year].”  This means that when real-world assumptions are used for our various sources of power, wind and solar are highly competitive with natural gas. In turn, that competition from renewables results in lower power prices and lower water use for Texas. 

As state leaders look for ways to encourage new capacity in the midst of a drought, it’s important to realize that renewable energy is now competitive over the long term with conventional resources. The fact that renewable energy resources can reduce our water dependency while hedging against higher long-term prices means that however state leaders decide to address the energy crunch, renewables need to be part of the plan.

Visit EcoWatch’s RENEWABLES page for more related news on this topic.

 

EcoWatch Daily Newsletter

Arx0nt / Moment / Getty Images

By Taylor Jones, RD

Oats are a highly nutritious grain with many health benefits.

Read More Show Less
Pexels

Get ready to toast bees, butterflies and hummingbirds. National Pollinator Week is June 17-23 and it's a perfect time to celebrate the birds, bugs and lizards that are so essential to the crops we grow, the flowers we smell, and the plants that produce the air we breathe.

Read More Show Less
Sponsored
Alexander Spatari / Moment / Getty Images

It seems like every day a new diet is declared the healthiest — paleo, ketogenic, Atkins, to name a few — while government agencies regularly release their own recommended dietary guidelines. But there may not be an ideal one-size-fits-all diet, according to a new study.

Read More Show Less
Logging shown as part of a thinning and restoration effort in the Deschutes National Forest in Oregon on Oct. 22, 2014. Oregon Department of Forestry / CC BY 2.0

The U.S Forest Service unveiled a new plan to skirt a major environmental law that requires extensive review for new logging, road building, and mining projects on its nearly 200 million acres of public land. The proposal set off alarm bells for environmental groups, according to Reuters.

Read More Show Less
Maskot / Getty Images

By Kris Gunnars, BSc

It's easy to wonder which foods are healthiest.

Read More Show Less
Sponsored
Homes in Washington, DC's Brookland neighborhood were condemned to clear room for a highway in the 1960s. The community fought back. Brig Cabe / DC Public Library

By Teju Adisa-Farrar & Raul Garcia

In the summer of 1969 a banner hung over a set of condemned homes in what was then the predominantly black and brown Brookland neighborhood in Washington, DC. It read, "White man's roads through black men's homes."

Earlier in the year, the District attempted to condemn the houses to make space for a proposed freeway. The plans proposed a 10-lane freeway, a behemoth of a project that would divide the nation's capital end-to-end and sever iconic Black neighborhoods like Shaw and the U Street Corridor from the rest of the city.

Read More Show Less
Demonstrators outside a Republican presidential debate in Detroit in 2016. Chip Somodevilla / Getty Images

Michigan prosecutors dropped all criminal charges against government officials involved in the Flint water crisis Thursday, citing concerns about the investigation they had inherited from the Office of Special Counsel (OSC) appointed by former Attorney General Bill Schuette, CNN reported.

Read More Show Less
Samara Heisz / iStock / Getty Images

New York state has joined California, West Virginia, Arizona, Mississippi and Maine in ending religious exemptions for parents who prefer not to vaccinate their children, The New York Times reported.

Read More Show Less