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Study: Gas, renewables will provide state’s future electricity needs

By: Laylan Copelin |

Over the next two decades, natural gas and renewable energy, particularly wind and solar, will provide all new power generation for the state’s primary electricity grid, a new study predicts.

The future of utility-size solar and wind energy generation remains very much linked to the price of natural gas. The state’s existing coal plants will remain profitable only if the federal government doesn’t enact tougher regulations on carbon emissions, according to the study.

The study was conducted by The Brattle Group on behalf of the Texas Clean Energy Coalition, which advocates that natural gas and renewables — often seen as competitors — can complement one another.

“This is about advancing clean energy,” said Kip Averitt, the coalition’s chairman and a lobbyist for the American Gas Alliance. “They are all Texas born and bred. We see opportunities for jobs by enhancing renewables and natural gas.”

The study looked at six scenarios between now and 2032, including modest increases in gas prices, high gas prices, tougher emission standards and the declining cost of solar and wind over time.

The study focuses on the grid managed by the Electric Reliable Council of Texas that provides 85 percent of the electricity load to the state, including Central Texas.

It assumes that the price of wind generation drops 20 percent over the next two decades and utility-size solar drops 57 percent even as government subsidies are phased out. But because solar costs have further to drop, that generation source doesn’t take off until about 2025 and then accounts for a fourth or a third of all renewable energy.

The overall generation mix is affected by the price of natural gas, the state’s primary generating fuel.

If the current low gas prices rise only modestly — 3 percent or so a year — then renewable energy usage remains at or below current levels. Natural gas would claim almost half of the energy usage and coal would keep its current third.

Peter Fox-Penner with The Brattle Group said he doesn’t believe that example is the most likely scenario.

He said renewable energy could more than double — to 25 percent of the energy usage by 2032 — with high gas prices. And it might hit 33 percent if renewable energy prices drop even further than expected.

Tougher carbon emission standards would all but eliminate coal plants if the federal government required a 90 percent reduction in emissions. Under that scenario , natural gas and renewable energy each would provide about 43 percent of the generation mix.

Wind and solar power isn’t always available due to weather conditions, but Fox-Penner said grid reliability could be maintained with the aid of fast-ramping natural gas units.

He said ERCOT might have to develop an intra-day market dedicated to power plants that could provide back-up power quickly. But he said cheaper renewable energy costs would help hedge against higher gas prices.

The study didn’t include scenarios with greater energy efficiency, demand response programs or rooftop solar.

Fox-Penner said he hopes to include those factors in the third part of the study.