Next Texas Energy Boom: Solar
Companies are spending $1 billion on new projects to harvest electricity from the sun
FORT STOCKTON, Texas—A new energy boom is taking shape in the oil fields of west Texas, but it’s not what you think. It’s solar.
Solar power has gotten so cheap to produce—and so competitively priced in the electricity market—that it is taking hold even in a state that, unlike California, doesn’t offer incentives to utilities to buy or build sun-powered generation.
Pecos County, about halfway between San Antonio and El Paso and on the southern edge of the prolific Permian Basin oil field, could soon host to several large solar-energy farms responsible for about $1 billion in investments, according to state tax records.
On a recent day, contractors for OCI Solar Power LLC erected posts for a solar farm that will be the size of more than 900 football fields.
First Solar Inc. was negotiating to lease an adjacent property, its second project in the county. Last year, the Arizona company began capturing sunlight on 400,000 black solar panels in a separate project, converting the abundant sunlight into about 30 megawatts of power.
SunEdison Inc. has presented plans for its own utility-scale solar farm to county commissioners, and Recurrent Energy, a subsidiary of
Canadian Solar Inc., is readying another site nearby for construction.
State incentives in California, Nevada and North Carolina helped fund the construction of many large-scale solar farms designed to sell electricity into those local power grids.
But in Texas, while there is federal financial support for such projects, there are no state subsidies or mandates that encourage solar power.
Texas currently has only 193 megawatts of large-scale solar arrays, enough to power about 40,000 Texas homes on a summer afternoon. But the Electric Reliability Council of Texas, the operator of the power grid that covers most of the state, expects between 10,000 megawatts and 12,500 megawatts of solar-generating capacity to be installed by 2029.
That is roughly equal to the size of all solar farms currently operating in the U.S.
Texas’ growth will be driven by falling prices, said Warren Lasher, ERCOT’s director of system planning. By the end of the decade, he said, “Solar is going to become one of the most cost-effective sources of electricity on the grid.”
In 15 years, ERCOT predicts between 3% and 9% of its electricity generation will come from the sun, though that could be slowed by low natural gas prices, according to the grid operator and energy company officials.
West Texas “is
flat, the land is open, available and cheap and there is a lot of sun” said Raiford Smith, vice president of corporate planning for CPS Energy, a city-owned utility in San Antonio. “It is an ideal place for putting solar.”
Another reason for the boom: Texas recently wrapped up
construction of $6.9 billion worth of new transmission lines, many connecting West Texas to the state’s large cities. These massive power lines enabled Texas to become, by far, the
largest U.S. wind producer.
Solar developers plan to
move electricity on the same lines, taking advantage of a lull in wind generation during the heat of the day when solar output is at its highest.
In the afternoon, the average wholesale power price in the Texas grid’s western zone for the past year has been
$35.43 a megawatt hour, according to data from the grid operator. Over the coming years, these wholesale prices are
expected to rise, creating more opportunity for solar farms to be profitable. And in a heat wave, ERCOT
rules allow wholesale prices to spike up to $9,000 a megawatt hour, creating the potential for large windfalls for solar farms and other power generators.
http://www.wsj.com/articles/next-texas-energy-boom-solar-1440149400
No state mandated green energy production and prices are uncapped to reap huge profits on time of day demand.
The state that has the cheapest energy will win the jobs race. The cost of doing business, especially energy intensive business, will move where the total cost of doing business is cheapest.
That puts California at a distinct disadvantage. Expect computer server farms to locate in Texas.
Data centers don't just suck down energy. They guzzle it. According to the National Resources Defense Council, data centers are one of the largest and fastest growing consumers of electricity in the United States. In 2013, U.S. data centers used 91 billion kilowatt-hours of energy, enough to power New York City households twice. The NRDC expects that demand to
grow to 140 billion kilowatt-hours by 2020.