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2016 Another Strong Year for Renewable Energy and Natural Gas

2016 Renewable EnergyContinuing a 3 year trend, 2016 saw renewable energy account for the majority of new electricity generation capacity in the United States.  The lion’s share of these additions came in the form of wind and solar power.

As is often the case, renewable energy generation peaked in the spring on a nationwide basis.  The spring typically sees a peak in hydroelectric power in the western part of the U.S. as rain and snowmelt drives hydro power. The Western United States also contributed the majority of the country’s solar power with 77% of total U.S. solar generation.  In Texas, the state’s massive installed wind base continued to churn out electricity for the Texas electricity grid which is separate from the other major U.S. electricity grids.

While 2016 also saw a large increase in solar power, most new solar capacity comes from small scale solar photovoltaic rather than large scale utility generation.  As of October of 2016 the U.S had a total of 12.6 GW of small-scale solar power installed.

Wholesale Electricity Rates Continue to Fall

Despite the fact that new capacity generation is coming largely from renewable energy sources, it is cheap natural gas that continues to put downward pressure on electricity rates.  Monthly wholesale prices for 2016 were lower than 2015; driven largely by lower natural gas prices.  The cost of natural gas delivered to power generators was 17% lower for the first 10 months of 2016.

Low rates for natural gas also contributed to an increased reliance on natural gas for electricity generation.  2016 saw, first the first time, natural gas surpass coal for electricity nationwide.  Although, in Texas this has been the case for a number of years.

 

GM Continues Transition To Renewable Energy With Wind-Powered Arlington, Texas Plant

electric-car-plantGM has recently announced its latest milestone in its drive to increase its use of renewable energy to power its operations. The company last year completed a deal to purchase sufficient wind-generated energy to power its major plant in Arlington, as well as 15 other separate facilities, which includes GM’s financial headquarters located in the downtown area of Fort Worth.

The company stated that it has agreed to buy 50 megawatts of electricity produced at the Cactus Flats wind farm, a massive 150-megawatt farm that is under development near San Angelo by Renewable Energy Systems. The Cactus Flats wind farm is another major investment in wind energy in Texas, which is currently the largest producer of wind energy in the country with over 10,000 turbines currently in operation.

The plant in Arlington builds some of GM’s most iconic models, focusing on the company’s top-selling sport utility vehicles. The plant already receives 50% of its power from renewable sources of energy, and the addition of the Cactus Flats wind farm will result in the plant being powered completely by green energy sources. It is estimated that the shift to wind power will reduce the plant’s total energy costs by up to $3 million a year, as well as reduce carbon dioxide emissions by more than 1 million tons over the entirety of the contract.

GM’s Worldwide Targets for Renewable Energy Part of Climate Change Commitments

Beginning in 2018, GM will be sourcing over 193,000 megawatt hours of power per year from wind alone. At the beginning of the contract over 6% of GM’s worldwide energy use will be from renewable sources. This recent deal is just a small part of GM’s long-term commitment to being powered entirely by renewable sources by 2050. This goal was set alongside other similar climate change commitments, such as the development of vehicles powered by electricity.

See Also: Amazon Comes To Texas For Electricity

See Also: Arlington Electricity Providers

 

Texas Sets Another Record For Wind Power

Texas Wind EnergyTexas has set a new record for electricity generated from wind.  On November 27th 2016, the ERCOT system saw more than 15,000 megawatts of electricity provided to the grid from wind turbines.

The amount represented about 45% of the spot demand for power in the grid in the afternoon.

“We saw high wind output throughout the day, ranging from just over 10,000 MW during the late night hours to this peak output during the noon hour,” said ERCOT Senior Director of System Operations Dan Woodfin. “Over the years, ERCOT has taken a number of steps, such as improving renewable generation forecasts, to allow us to operate the grid reliably on days like this.”

During the period, total output from wind approach the system capacity of 17,000 MW.

See Also: Wind Energy Provides Cheap Electricity In Texas

 

Cheap Natural Gas Leads to Falling Consumer Electricity Rates

Plunging oil prices may have hit some energy companies hard and have some oil-producing nations worried about their budget deficits, but it has been a boon to the average American consumer as electricity rates have dropped 1% nationwide to an average of 12.4 cents per kilowatt hour, the first nationwide decline in energy prices in decades.

electricity_rates

As developed nations move away from burning dirty coal for energy as a result of the efforts to meet international greenhouse emission caps, cleaner burning natural gas plants and alternative energy sources (wind, sun, geothermal, etc) are filling in the gaps. Natural gas is now the major source of fuel for energy producing plants, and a 28% drop in the price of natural gas for energy producers over the first half of the year has translated into big gains for consumers nationwide.

However, the replacement of coal burning plants with plants that use natural gas and a plunging price in hydrocarbons is not the entire story. Solar and wind energy in particular continue to become more efficient with advancing technologies, and are taking an increasing share of national, and international, energy production. This year the United Kingdom produced more energy from solar panels than from burning coal, and marked the first day since 1882 that no energy was produced from the burning of coal across the entire nation.

The state of Texas has enjoyed an even greater drop in consumer electricity prices, down 6% to 11 cents per kilowatt hour, thanks to easy access to plentiful supplies of cheap natural gas and a deregulated market. The deregulated market has allowed producers to adjust their prices sooner to reflect the lower cost of natural gas, and then pass these savings on to the consumer.

New England, which has a similar share to Texas of energy produced by natural gas, saw a similar decline in electricity rates over the year. However, the biggest decline of 12% was observed in the state of Hawaii, which uses oil for the vast majority of its energy production. The steep decline in the price of oil helped to bring electricity rates down substantially, albeit from a position that was far above the national average as a result of the state’s remote location and the difficulties that its geography causes for the installation of energy infrastructure.

 

Amazon Comes To Texas For Electricity

Texas Wind EnergyAmazon.com has become the latest big company to turn to Texas serve their green energy needs.  They recently announced they will be building a huge wind farm in the state – their largest renewable energy project to date.  The 253 megawatt wind farm will be located in the West Texas county of Scurry.  Amazon has committed to buying 90% of the facilities output of electricity.  It will be capable of producing up to 1 million megawatt hours of electricity per year when it goes on line late next year.

Amazon’s Web Service cloud data centers (AWS) are large consumers of electricity.  Amazon has committed to a goal of 100% renewable energy.  The new wind farm in Texas will bring the company’s renewable energy portfolio up to 2.6 million MWh annually.  Amazon estimates that 40% of its AWS infrastructure will be powered by renewable energy by the end of the year.

Amazon is far from the only large company to go big on Texas electricity. Johnson & Johnson recently agreed to purchase half of the output of a 200 megawatt wind project being developed by EON SE in the Texas panhandle.  In 2013 Microsoft signed a 20 year deal to purchase all of the output of a 110 megawatt wind farm near Fort Worth developed by RES America.  Texas is also home to the largest federally owned wind farm which was built in 2014 to power the Pantex nuclear weapons facility.

Texas has paved the way for these large projects by investing billions of dollars in infrastructure to support what is by far the country’s largest installed wind capacity.   Texas has an independent electric grid and is the largest deregulated electricity market in the country.

 

Coal’s Importance To Texas Electricity Continues To Decline

smokestackThe use of coal to generate electricity in Texas continues to slide.  Just ten years ago, half of the electricity in Texas came from the burning of coal.  Today, coal only contributes 20%.

Why the huge drop off?  The two main factors are natural gas and wind energy, with solar and hydro also playing a part.

Texas is by far the largest producer of natural gas in the U.S., more than doubling the production of the #2 state, Pennsylvania.  Texas is now producing so much natural gas, that a pipeline is being built that will send a significant amount of natural gas to Mexico to be used by their electricity generators.

Texas also produces more electricity via wind energy than any other state.  There have already been days when the state saw more electricity produced from wind than from coal.

It is expected that by 2020, more than half of all coal-burning power plants in Texas will be shuttered.

 

Enough Electricity In Texas For Spring As Renewable Energy Surges

ERCOT, the organization responsible for maintaining the Texas electricity grid, is predicting more than adequate capacity in the spring amidst an expected surge in renewable power for the state in 2016.   In its Seasonal Assessment of Resource Adequacy, ERCOT is predicting a spring usage peak of 58,279 MW.  This is well within system capacity even with the assumption that there will be 9,482 MW of lost system capacity due to maintenance and forced outages.  This is based on historical outage data going back to 2010.  The demand estimates were made using May 2006, a hotter than normal May, as a model.

Due to the fact that Texas’ operational solar capacity recently passed a threshold of 200 MW, the methodology for determining how much solar power to include in capacity projections has changed.  This resulted in a decreased amount of solar power included in the spring projections.  However, 2016 is expected to be an exceptional year for solar energy in Texas.

ERCOT Solar

By some estimates, the state will see an additional 2 GW of installed solar capacity in 2016.  This would result in a 10-fold increase in solar electricity.  Texas has long been considered a sleeping giant when it comes to solar power. Although it has the geography and climate to be a substantial producer, it has had very little in the way of utility scale solar power.  This is changing in a big way with projects underway for both the Austin and San Antonio municipal utilities among others.  The Austin project, in particular, is notable for its low cost. The purchase agreement for that project calls for a rate of less than 5 cents per kilowatt hour.  This is cheap even when compared to natural gas.  Several years of cheap natural gas have led to low electricity rates in Texas and created a challenging environment for solar and natural gas to compete on price.

Despite this, renewables have continued to gain ground in Texas, led by wind in particular. Wind, along with solar, make up around two-thirds of the state’s additional capacity for 2016.  Of the 12,500 MW in new power expected to come online, wind will account for about 63%. 2016 will likely see wind overtake coal as the second largest source of electricity in the state.

Although coal is rapidly becoming a smaller contributor to the state’s electricity output, coal plants are still critical for keeping the lights on in Texas.  The report downplays any potential impact of compliance with the Mercury and Air Toxics Standards regulations for coal units.   With the final compliance date being April 15, 2016, planners expect generators to be in compliance.

The preliminary summer report predicts record peak electricity usage for the state with demand peaking at over 70,000 MW for the first time.  Against this, it is predicted that the system will have over 79,000 MW of available generation.