Market forces driving Lone Star State toward a cleaner grid
A new report commissioned by the Texas Clean Energy Coalition shows market forces are driving Texas toward a cleaner electric grid. More importantly, natural gas and renewable energy will provide all of the new generation the state will need in the next 20 years — at the same wholesale power prices as today, except for inflation. And the transition to a cleaner electric grid is creating jobs for Texans.
According to a new analysis by energy economists at the Brattle Group, sustained low natural gas prices are driving a transition to Texas-produced wind, solar and natural gas in the electric grid managed by the Electric Reliability Council of Texas, which manages 90 percent of the state’s electricity. By 2035 wind, solar and natural gas will likely power about 85 percent of the ERCOT grid. Combined-cycle natural gas plants will provide the lion’s share of new generation, and the study also forecasts big increases for large-scale solar photovoltaic generating capacity — 13 GW by 2021 — and a continued strong wind power sector.
The market-driven transition to a cleaner electric grid also creates jobs for Texans. According to the Brookings Institution, the clean energy industry created 9,254 Texas jobs in the first decade of the 21st century. And the industry continues to expand rapidly. According to a 2014 report from the office of the governor, more than 1,300 Texas companies employ about 102,000 workers in industries directly and indirectly related to the renewable energy industry.
Clean energy jobs pay well, an average annual salary of $78,257. Last year alone, 16 new clean energy projects were announced for our state, which will create more than 5,200 additional clean energy jobs, according to Environmental Entrepreneurs’ 2015 jobs report. Some Texans who have been laid off from the oil industry are finding work in the clean energy industry, with companies like Mission Solar in San Antonio.
State officials deserve credit for laying the foundation for Texas leadership in the new clean energy economy. In 1999, the Legislature established a renewable energy portfolio requiring 10,000 MW of electricity be generated by renewable resources by 2025. Texas has been adding sizable quantities of wind power to its energy portfolio for over a decade, and we exceeded the renewable energy portfolio goal 15 years early.
Texas also invested in transmission infrastructure to support the development of wind power in West Texas. In 2005, the Legislature voted to invest $7 billion in Competitive Renewable Energy Zones, resulting in the construction of 3,600 miles of transmission lines that move wind power from the north and west to cities in Central and East Texas. Currently, Texas claims the largest wind fleet in the country and is home to five of the world’s 15 largest wind farms.
The transition to wind, solar and natural gas will also create an electric grid that produces far less toxic air pollution than coal. Brattle’s findings forecast that 12 gigawatts, or 60 percent, of the coal plants in ERCOT could retire in the next several years, causing a dramatic reduction in carbon pollution.
Many of these coal-fired units are small, old, and lack the required pollution control equipment, while newer combined-cycle natural gas plants and renewable energy from wind and solar power are cheaper and cleaner. The transition to a cleaner electric grid could reduce annual CO2 emissions in ERCOT by an average of 28 percent below 2005 levels — exceeding the carbon reductions proposed in the EPA’s controversial Clean Power Plan. The market forces driving this transition are so strong that EPA’s regional haze rule, if implemented, would likely have only a marginal impact on projected coal plant retirements.