More than 100GW of solar projects are seeking interconnection in the main Texas electric grid, the largest US renewables market – almost five times as much as the wind power queuing to join a system where turbines previously enjoyed explosive growth, latest data shows.
As of 30 September developers had 100.3GW of solar capacity in the queue, 42.4GW of utility-scale battery storage, 22.5GW of wind, 13.5GW of natural gas and minor amounts of other technologies such as biomass.
There was no coal, which had been the dominant fuel for electricity generation since the 1960s but started losing market share in 2010 to cheaper and cleaner natural gas and wind. Last year, coal supplied 17.9% power within Electricity Reliability Council of Texas (ERCOT) system, versus natural gas (45.5%) and wind (22.8%).
Utility-scale solar, a relatively new entrant, provided about 2.3%. That is about to change – and fast. Texas, already the leading wind power state, installed 2.5GW of solar capacity in 2020. The EIA forecasts 4.6GW and 5.4GW of additions this year and in 2022, respectively, versus 3.2GW in California over that two-year period.
EIA, the statistics arm of the Department of Energy, also estimates that Texas will install one-third of new utility-scale solar capacity in the US through 2022. Texas, by then, will have 14.9GW in place versus about 17GW in California.
The federal investment tax credit (ITC) is a key driver of large solar growth in ERCOT. Projects that start construction in 2021-22 are eligible for a 26% tax credit (on capital expenditure) that declines to 22% for projects that start in 2023 and then 10% for those starting in 2024 or later.
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If Congress extends the ITC for 10 years as President Joe Biden wants, ERCOT and Texas more broadly would be among the states that would most benefit, according to sector consultants.
Texas has more privately owned land available for lease for world-class PV projects than any other state and the cost of doing business, including environmental reviews, is much lower than in California. With a fast-growing population now 30 million and an economy larger than Canada’s, Texas has been a magnet for clean energy investment despite having the most important oil and gas sector in the US.
Availability and recent increases in cost of imported solar panels from China could slow growth in Texas, but this is a problem for the US industry more broadly. Much will depend to what extent President Joe Biden blocks imports of panels allegedly made with slave labour in China’s Xinjiang province or by Chinese solar factories that rely on coal-fired electricity.
How much solar in the ERCOT queue will also depend on availability of project financing, duration and severity of Covid-19 impacts on the Texas economy, and electric power and gas prices.
This post appeared first on Recharge News.