Texas, Land of Wind, Could Soon Also Be Land of Solar

Texas, land of wind, could soon also be the land of solar, as the state embarks on its first utility-scale solar farms – at prices that compete with conventional energy.

Recurrent Energy, the solar developer arm of Sharp Corp., won the contract to build a 150 megawatt (MW) solar farm from the state’s leading utility on renewable energy, Austin Energy. It comes online in 2016, and the utility is buying all its energy under a 20-year power purchase agreement.    

"Solar power has reached a price that is competitive in the ERCOT market, allowing us to further diversify our energy portfolio with renewable resources," says Larry Weis, General Manager of Austin Energy.    

"The Texas market represents one of the most exciting opportunities for the solar industry," says Arno Harris, CEO of Recurrent Energy. "The industry’s growing scale and decreasing costs are enabling us to successfully compete against conventional energy in deregulated markets like ERCOT.

Earlier this year, Austin Energy signed a contract for what could be the lowest price for solar electricity ever, just under $0.05 per kilowatt hour (kWh), locked in for 25 years – without any local or state subsidies. The electricity comes from two solar farms also going up in West Texas, a 150 MW and 50 MW plant built by Sun Edison.  

The price is less than a third of what Austin Energy paid in 2009 for solar, and beats natural gas ($0.07), coal ($0.10) and nuclear ($0.13)!

The utility’s goal is the highest in the US – 35% of electricity from renewables by 2020 – and it’s almost there, six years early, demonstrating that it’s not that hard to meet aggressive renewable energy targets. It’s also been getting incredibly cheap deals for wind energy.

Recurrent says it has over 500 MW of operating solar projects in North America and 2 gigawatts under development.

400 MW Project Moves Ahead

Meanwhile, the first phase of a 400 MW project is online in San Antonio. Rather than being built as one, massive project, South Korea’s OCI Solar Power consists of four separate solar plants – the first phase is the 41 MW Alamo I solar farm.  

When the entire project is finished, Texas will be one of the top solar producing states.

Alamo 1:

Solar OCI Alamo 1

"By 2020, 65% of our community’s electricity will come from resources that are low- or no-carbon emitting – reducing emissions in an amount that’s equal to removing more than a million cars from local roads," says CEO Doyle Beneby of San Antonio’s municipal utility, CPS Energy.

The project represents one of the most creative agreements for bringing solar to a state. Negotiated by San Antonio’s Mayor Julian Castro, he convinced the utility to tie clean power purchase agreements to economic investments in the city. As a result, OCI Solar Power moved its headquarters there and opened a $100 million manufacturing facility that makes the components for all its North American projects, creating 800 permanent jobs and $700 million in an annual economic impact for Texas. 

Castro led an impressive turnaround at CPS Energy, turning it away from "bullheaded reliance on a fleet of enormous nuclear and coal-fired power plants built decades ago," to instead following a "New Energy Economy" plan. Now it’s aiming to get 20% of its power from renewables by 2020, and is on track to beat that goal.

El Paso Electric Company

The utility says it will be coal-free by 2016, as it moves forward on utility-scale solar to serve its 395,000 customers in west Texas and southern New Mexico.

"Our west Texas and southern New Mexico region has the right kind of sun for optimal solar energy production, making this region the ‘goldilocks’ in terms of climate, humidity and heat characteristics that allow us to expand our renewable portfolio with cost-effective technologies and reliable energy resources," says Tom Shockley, CEO.

Also in Texas

San Antonio’s leadership on renewable energy is bringing other rewards – the city is attracting talented individuals that work in the space and companies like Microsoft that want renewables to run their data centers.

Microsoft announced a 3-year partnership with the University of Texas to "transform how data centers consume energy." Noting that CPS Energy "is the largest publicly owned purchaser of wind power in the country," the team will evaluate using micro-turbines instead of diesel generators during times of peak demand and grid outages.

The company is also donating $1 million to the university’s Texas Sustainable Energy Research Institute. 

Last year, Microsoft made its biggest purchase of renewable energy, 100% of the energy from the 110 MW Keechi Wind Farm in Texas, to power its data center there. The money came from Microsoft’s internal carbon fee.

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