More and more, coal is gone with the wind in Texas

CoServ expects to increase share of renewables in coming years

BY NICHOLAS SAKELARIS | CoServ

Fossil fuels have long been king in Texas, but wind and solar power are quickly gaining prominence.

Texas’ wind power not only blows away all other states, but it also ranks in the top five among countries worldwide with nearly 25,000 megawatts (MW) of installed capacity at the start of 2019, according to the Energy Information Administration. 

Solar power is on the rise, too, as Texas ranks sixth in the country for solar power and has doubled capacity in the last two years, the EIA reported.

With this well-publicized shift to renewable energy in a state known for oil and natural gas, CoServ Members might be wondering how much of their electricity comes from renewable sources.

In 2019, CoServ sold about 629,000 megawatt-hours (MWh) of renewable energy.

CoServ buys power from Brazos Electric Cooperative, and Brazos in turn buys a portion of its power supply from the Electric Reliability Council of Texas (ERCOT) wholesale market. The electricity comes from a variety of generation resources, including coal, natural gas, solar and wind.

The average CoServ home uses approximately 1,375 kilowatt-hours (kWh) per month, so looking at the renewable energy profile from both Brazos and ERCOT, about 11.5 percent, or 158 kWh, comes from solar and wind power.

And this number is expected to only increase in the coming years.

In January, CoServ started purchasing half the production from the 100 MW Lapetus Solar Energy Project in West Texas. This project alone boosts CoServ’s renewable energy purchases from Brazos by 2.5 percent. In addition, ERCOT has signed interconnection agreements for 8,200 MW of wind power expected to come online by the end of next year.

“As ERCOT gets more and more green with a higher share of renewables, CoServ benefits because we get more low-cost renewable energy,” said Gary Franzen, CoServ’s Director of Energy Services. 

Increasing renewable energy resources usually makes better economic sense than constructing more fossil fuel generation plants, Gary said. Brazos, CoServ’s main power supplier since 1941, hasn’t built a fossil fuel plant since 2013.

But when it comes to renewable energy, Gary said CoServ and Brazos are always evaluating the need for additional power purchase agreements like the Lapetus deal executed in January. At the time, it marked the largest power purchase agreement between an electric cooperative and a solar facility in Texas.

Coal power continues to lose market share in Texas due in part to increasing renewables, but also due to hydraulic fracturing and shale drilling making natural gas cheap and abundant in the United States. The declining cost of natural gas has turned the power world on its head in the past decade, and it has made many natural gas-fired generation plants less expensive to run than coal plants.

“Cheap natural gas and renewables have displaced coal,” Gary said. “When ERCOT decides which plants to run, they start with the cheaper ones before the more expensive ones,  so the coal plants are called upon to run less often.”

In 2010, coal produced 40 percent of the power in the ERCOT grid while natural gas produced 38 percent and wind produced only 8 percent. In 2019, coal production fell to 20 percent, the same as wind power, and natural gas increased to 47 percent.  

The economics of wind and solar have shifted in recent years to the point that they cost less over the entire life of the generation source. This includes both upfront capital costs and ongoing operating costs with all things being equal and not considering government subsidies, Gary said. And once they are built, wind and solar facilities require less manpower than fossil fuel plants and don’t require any fuel to generate electricity.

“The overriding trend is that with the growth of renewables, prices have become cheaper to the point where in most places, including Texas, it’s cheaper to build a solar or wind farm than it is a new fossil fuel generation facility.”

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