Monday, February 4, 2013

Texas Grid Operator Report Says Renewables Are Competitive With Gas Over Next Decade

The economics of wind and solar engenders lively discussion on this blog and elsewhere.  In part, the reason for the robust discussion is that the facts about the economics of wind and solar change rapidly.

Indeed, among energy technologies, only solar saw prices decline as sharply as natural gas did since 2008.  Not too far behind gas and solar in the price drop race has been wind that also has had large improvements in its competitiveness over the last 5 years.

Now in a biennial report to the Texas Legislature, the Electric Reliability Council of Texas (ERCOT) states at page 2: "Scenario analysis indicates that both natural gas generation and renewable resources are likely to be competitive across a broad range of potential future market outcomes."  At pages 18 to 19, ERCOT which operates the grid for the most of Texas states that the most recent information about wind and solar documents their much improved economics and ERCOT's planning models indicate that 17,000 megawatts of wind will be added in Texas by 2032.

What does the continued boom of wind and solar in Texas mean for consumers and the price of power?
ERCOT states at page 20: "The added renewable generation in this sensitivity results in lower market prices in many hours and lowers the revenue potential for all intermediate and base-load units (including the combined cycle units)."

Colin Meehan who works for EDF has also written an excellent analysis of the ERCOT Report:  The ERCOT report is another piece of evidence documenting the rapidly improving economics of wind and solar, and their improved economics is the principal reason why wind, solar as well as natural gas will dominate America's market for new electricity generation.

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