Report: Texas will add 13 GW of solar PV by 2035

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Driven by market dynamics including low gas prices, Texas is on a path to move to a grid dominated by natural gas, wind and solar, according to a report by the Brattle Group. This change is also expected to come at little additional cost.

Exploring Natural Gas and Renewables in ERCOT was released on Tuesday, and is the fourth in a series that Brattle Group has produced for Texas Clean Energy Coalition (TCEC). The report looks at changes in the Texas generation mix to 2035. The report also examines the role of market and regulatory factors in this mix, costs and CO2 emissions.

In the report Brattle Group predicts that the ERCOT grid, which covers the vast majority of Texas’ land area and population, will add 9 GW of wind and 13 GW of solar over the next 20 years. This will nearly double the state’s wind capacity, and also means that Texas’ solar will increase more than 20-fold, as GTM Research puts the capacity at the end of 2015 at 537 MW.

In the event one considers a 20-fold increase in PV in 20 years overly optimistic, it is important to note that ERCOT itself has predicted that PV capacity on the grid will reach 13 GW in only 15 years – without implementation of the federal Clean Power Plan.

At the same time, the Brattle Group report expects existing coal and nuclear generation to be replaced with gas. Natural gas made up roughly half of ERCOT generation in 2015, with coal comprising another 28% and nuclear 11%, however the share of coal fell sharply from 2014.

“Based on widely recognized market trends, it is very possible that natural gas prices will stay low (perhaps less than $4/MMBtu) and that solar prices will continue to drop significantly,” said Brattle Group Principal Dr. Ira Shavel.

“Over the next 20 years, due to the free market alone ERCOT can expect to see a cleaner grid that relies on Texas-produced natural gas, wind and utility-scale PV solar power at little additional cost to consumers.”

But while the report says market forces will be responsible for coming changes, TCEC also notes that past regulatory decisions have played a major role in setting the stage for increased deployment of wind and solar. Factors cited by TCEC Chair Kip Averitt are the state having one of the first state-level renewable energy mandates, deregulation and investing in transmission.

Although it was one of the first, Texas’ renewable portfolio standard (RPS) is comparatively weak compared to other states. Regardless the state has been a national leader in wind generation, with ERCOT getting 12% of its power from wind in 2015.

And while it remains a matter of great contention at the federal level, both the Brattle Group Report and ERCOT’s own estimates find that the federal Clean Power Plan will have little impact on PV deployment during the next few decades.

“The cleaner ERCOT grid powered by Texas-produced natural gas, wind and solar power will make proposed new federal regulations largely irrelevant,” notes Brattle Group.

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