Texas continues to have an advantage in wind power

Fuel Fix:

Wind and solar power competing evenly with their fossil fuel counterparts without federal subsidies could come in just a few years in Texas and other areas, while it may take another 15 years or more in other parts of the country, according to reports released this week.

The “paradox” slowing renewable power growth somewhat is that the regions with the greatest natural resource potential for wind and solar, like the southwest and mid-continent, already have relatively cheap power prices that make it harder for wind and solar to compete, while the northeastern part of the country with more expensive power has weaker resource potential, according to the “Journey to grid parity” report from the Deloitte Center for Energy Solutions.

The key factors contributing to wind and solar power becoming more competitive include the ever-decreasing manufacturing costs for renewable power projects, improving power generation efficiency from wind and solar technological enhancements, the projected increase of natural gas prices from greater global demand and more U.S. exports of liquefied natural gas, and the anticipated need for more power generation from the expected retirement of more older, coal-fired power plants, the report contends.

However, grid parity for wind and solar may take a decade longer in many parts of the country if legislators on Capitol Hill do not extend the production tax credit for wind and the solar investment tax credit — the benefits for both expired tax credits run out after 2016, according to the report.

“Renewable power generation reaching grid parity without federal or state subsidies, except in certain markets possessing the most robust renewable resources and having relatively high wholesale power market prices,” the Deloitte report finds. “Indeed, without dramatic cost declines and improvements in efficiency and utilization, it is unlikely some parts of the U.S. can reach grid parity without federal or state incentives within the next 10 to 15 years.”

Onshore wind is expected to achieve parity faster than solar in most parts of the nation, including Texas, which already leads the nation in wind power. Buoyed by the production tax credit, transmission expansion projects, ample land and strong wind, Texas accounted for 22 percent of the nation’s wind power generation last year.
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The hidden expense in wind power and solar comes from having to have back up gas fired energy plants for when the wind does not blow or the sun does not shine.   It looks like Texas will continue to have a competitive energy advantage even as more areas switch to wind and solar.