Going forward almost all new electricity in Texas will come from renewable energy sources – primarily solar energy. This is according to a report released by the agency responsible for maintaining the Texas electricity grid. Once the dominate sources of electricity in Texas, coal has been on its way out for a number of years. Due to a combination of market forces and federal regulations, coal can no longer compete with other sources or power.
The report looks at a number of possible scenarios to project the makeup of the Texas electricity market over the next 15 years. The scenarios include High Economic Growth, Recession, and Extended Extreme Weather.
Under every scenario solar energy is the predominate theme. It seems that solar energy is finally having its moment in the Texas sun. Today the state gets a tiny percentage of its energy from solar power. According to the latest projections, this amount will soar to around 17% in the next 15 years. Practically all of the gains in solar will come at the expense of coal.
The Texas deregulated electricity market is designed to allow competition to keep electricity rates low. The largest component of electricity rates is the wholesale price of electricity paid to the producers from retail electricity providers. The fact is, electricity generated by solar power is now cheap and getting cheaper.
This is not just a Texas phenomenon. Worldwide, solar energy is expected to be the cheapest source of new energy over the next 15 years. Between now and 2040, 43% of new capacity worldwide is expected to come in the form of solar.
Pressure on coal is not coming just from competition from clean energy sources. Tough federal regulations will continue to have their intended effect over the coming years. Over the next 5 years alone, 5 gigawatts of coal power will be leaving the Texas electricity grid because of the EPA’s “regional haze rule”. Against this, 14 to 28 gigawatts of solar power are expected to come on line in Texas over the next 15 years.