Sunday, June 15, 2014

Solar power comes to oil country

One of the benchmark prices for oil is West Texas Intermediate, while oil and Texas have been linked so long in the popular imagination that the culture business has turned the Texas "awl bidnus" into dozens of movies and TV shows.  In real life, the Texas oil multimillionaire has spawned some of the most reactionary politics in the history of USA (Hunt brothers anyone?)

Oil dominance notwithstanding, Texas is also home to some of the best solar and wind sites on earth.  But while wind power has gotten a foothold, solar has gone essentially nowhere.  But that seems to be changing fairly rapidly and the driver of that change is cheaper solar cells.

Now it will probably be a while before they remake Dallas with nasty J.R. Ewing as the owner of a large-scale solar farm, but the changing technology will eventually make such a thing (more or less) believable.  And when some big-time Texas energy players start making money on solar, it will change the culture in important ways.  Such a development could not come a moment too soon.

Solar power gains momentum after long struggle in Texas

By JAMES OSBORNE 04 June 2014

Solar developers have eyed West Texas’ combination of cheap land and lack of cloud cover for years.

Now vast swaths of ranch land have been optioned for the large-scale solar developments usually seen only in California. Already a solar farm more than three times the size of anything that currently exists in the state is being built.

Whether solar will take off the same way wind power has remains to be seen. But the recent developments represent the strongest foothold the solar industry has achieved in a state that does not offer the lucrative subsidies that drive development in other parts of the country.

“We have a large land portfolio in Texas. … For the last couple years we’ve had teams driving around, knocking on doors to option land until we’re ready to build,” said Arno Harris, CEO of San Francisco-based Recurrent Energy. “Texas is a large market. And it’s a growing market. … It’s really just economics. The solar industry has driven prices down to where solar can compete.”

Recurrent announced plans last month to build a 150-megawatt solar farm in West Texas after signing a 20-year power purchase deal with Austin Energy. That comes just months after First Solar, one of the world’s largest solar companies, began construction on a 22-megawatt farm near Fort Stockton with plans of eventually expanding to 150 megawatts.

From small rooftop systems to Texas’ largest installation, a 39-megawatt solar farm in San Antonio, the state counts less than 220 megawatts of solar power. On a per-capita basis, that is nearly the lowest in the country.

But with almost 350 megawatts of new capacity scheduled to be built by 2016, that is likely to change.

And an even more dramatic acceleration could be ahead. Solar developers have been flooding the state’s grid operators with applications for more solar farms, close to 2,000 megawatts worth, said Warren Lasher, director of system planning for the Electric Reliability Council of Texas.

“It’s hard to say how much will actually get built,” he said. “It’s been this way for more than a year. But it’s a significant increase from before.”

Pricing advantage

Driving the recent interest are environmental mandates from Austin’s and San Antonio’s city-owned utilitiesto vastly expand how much electricity they get from solar in the decade ahead. At the same time the cost of solar has come down dramatically over the last two years — Harris estimated between 60 and 70 percent.

Recurrent is reportedly selling power at the rate of around 5 cents per kilowatt hour, roughly 25 percent above the current wholesale rate in Texas.

But considering the 20-year contract and that power prices are prone to rise in the decades ahead, solar seems close to winning contracts on pricing alone.

“On the surface it looks like a very attractive deal,” John Fainter, president of the Association of Electric Companies of Texas, said of the Recurrent contract. “With all this coal being retired, you’re probably going to replace it with gas [plants]. And that will probably move the price of gas up and the price of power here. … If the price of the equipment keeps coming down, solar is going to be more and more attractive.”

For residential customers, solar remains a tough sell in Texas.

Retailers like TXU Energy and Reliant Energy are marketing rooftop solar leasing programs more aggressively and buying excess solar power from customers. But so far interest has been modest.

“It’s not my expectation half of Texas customers will go solar overnight. We think this is the beginning,” said Reliant president Elizabeth Killinger.

Last year solar accounted for a fraction of a percent of total generation. Even so, Texas regulators are studying the potential implications were solar to play a significant role on the grid.

Solar panels rely on direct sunlight. Even thin cloud cover can play havoc with their electrical output, necessitating precise weather forecasting. ERCOT engineers are already developing a forecasting program specifically for solar.

Connecting cities

Then there’s the matter of getting the power to the population centers in the eastern half of the state.

Last year, transmission companies completed $7 billion worth of high-voltage lines running to West Texas. Known as the Competitive Renewable Energy Zone project, it was intended to connect cities to the flood of new wind farms. Because most wind power is generated at night, ERCOT believes the lines could easily handle any demand for daytime solar transmission.

“It could work out well,” Lasher said. “Solar is much more consistent than wind, especially on hot summer days when it’s not windy and you don’t have a lot of clouds moving through. That’s when we really need the power.” more


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