‘It’s just economics.’ Wind blows past coal in Texas

Source: By Benjamin Storrow, E&E News reporter • Posted: Wednesday, July 24, 2019

To witness the transformation of America’s power sector, go to Texas.

Earlier this month, the state’s grid operator reported wind had generated more electricity than coal through the first six months of the year.

The announcement is significant on several fronts. Texas is America’s largest consumer of coal. The 93 million tons burned by the Lone Star State’s power plants in 2017 was more than double that of the 39 million tons consumed by Missouri, the second-biggest coal-consuming state, according to figurescollected by the U.S. Energy Information Administration.

Yet coal is declining in Texas. Four large coal plants retired in the state last year. Another, Gibbons Creek, will close down this fall. Where the black mineral generated almost 40% of Texas’ electricity in 2010, it was responsible for less than a quarter of the state’s power production last year.

Low natural gas prices have been a primary cause for driving coal plants offline. But wind has arguably been the greatest beneficiary. Wind generated 18% of Texas’ electricity in 2018, up from nearly 8% in 2010, according to the Electric Reliability Council of Texas (ERCOT).

Wind’s rise is all the more notable for the general lack of climate policy in Texas. The state enacted a law in 1999 calling for 10 gigawatts of renewable energy by 2025. Texas already had more than 21 GW of wind installed last year.

“I have made the point once or twice that you don’t need a climate policy to effect change,” said Ed Hirs, who teaches energy economics at the University of Houston.

Instead of focusing on renewable mandates, as many liberal states have done, Texas put its policymaking energy into transmission. Much of the state’s wind is located in West Texas, while its population centers are in the east. A $6.9 billion build-out of 18.5 GW of transmission capacity was completed in 2013, linking west and east. A monthly surcharge on consumers’ electric bills financed the expansion.

The transmission build-out was accompanied by a federal tax credit for wind generation, which helped accelerate the deployment of wind across Texas.

“It’s just economics. Texas has the wind resource, and Texas decided to invest in the transmission backbone,” said Joshua Rhodes, an energy researcher at the University of Texas. “It’s like ‘Field of Dreams.’ If you build it, they will come. Texas built the transmission, and they sure have come.”

Texas’ experience stands out in a year when other states are moving quickly to boost their supplies of renewable energy. New Mexico, New York and Washington all committed this year to eliminating carbon emissions from their power plants by midcentury, largely by ramping up production from wind and solar. Maryland and Nevada also pledged to generate half their electricity from renewables by 2030 (Climatewire, June 26).

Those states will be hard-pressed to emulate Texas, however. For one, few boast the state’s abundant wind and solar resources. Another advantage for Texas: It’s one of only a few states with its own independent grid operator. That helped save Texas from messy negotiations with its neighbors over the construction of the transmission lines needed for the build-out of its wind industry.

But if those states face a difficult climb in matching Texas’ renewable prowess, it has a much longer road to cleaning up its power sector. Its power plants emitted 239 million tons of carbon in 2017, according to the most recent EIA data. Florida, the second-largest power sector emitter, reported carbon levels of 107 million tons. California is America’s largest state, but its emissions from the power sector are 44 million tons.

Emissions from Texas power plants declined 7% between 2013 and 2017. Further reductions are likely. The five coal plants shuttered in 2018 and 2019 accounted for 14% of Texas power-sector emissions in 2017.

Still, some argue the state could easily be doing more.

Daniel Cohan, a professor who studies power-sector emissions at Rice University, noted many Texas power plants have not been subject to the federal haze requirements that have contributed to the closure of coal plants in other parts of the country.

“Part of the reason this transition is happening in Texas now is because we didn’t pass the air quality policies that should have driven it,” he said. “With this much sun, wind and natural gas and some nuclear plants still around, there really is no reason to use coal at all except that policy and the market hasn’t pushed us in that direction.”

Indeed, the question is where Texas goes next. The recent coal retirements meant ERCOT entered the summer with a slim margin of electricity reserves (Energywire, May 9). That could temper future coal retirements in the state.

At the same time, more renewable development will put more pressure on coal. ERCOT expects solar to grow from 1.8 GW in 2018 to 9.7 GW by the end of 2021. The grid operator is projecting 36 GW of wind capacity by the end of 2021, up from almost 21 GW last year.

This year shows just how much the Texas grid has already changed. Wind generated 38,713 gigawatt-hours of electricity — or 22% of the state’s power — through the first six months of 2019, according to ERCOT. Coal generated 37,977 GWh, which was 21% of total electricity production. Natural gas was by far the leader at 68,266 GWh (38%), while nuclear generated 20,171 GWh (11%).

Coal may yet edge out wind in terms of power production this year. July and August are generally the best times of the year for coal generation. Then again, the fall usually brings stronger winds.

Texas may not boast much in the way of climate policy, but its grid is decarbonizing just the same.