If you want to see a lot of people trip over their politics try discussing Texas's runaway success with renewable energy... largely attributable to their light regulatory environment and free market principals.
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"Texas already ranks first in the US in wind power capacity. It is now on its way to having the second-most solar PV capacity in the country after California. But unlike California, with a goal of 100 per cent clean energy by 2045,
the Lone Star state is adding sun power through the incentives of a competitive electricity market. Operated by the Electric Reliability Council of Texas (Ercot), more than half the proposed project capacity queueing for a grid connection in that market is industrial-scale solar, records show.
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Moving renewable electricity from the vastness of the west to eastern cities such as Dallas and Houston was aided by special transmission lines the state authorised 15 years ago. Designed to handle wind power, they are now easing the flow of solar too.
A light-touch regulatory approach, popular with oil and gas executives, has also attracted the solar industry. “It’s Texas: there’s very little in the way of planning laws or restrictions. It’s pretty streamlined from the point of view of permitting and getting connections. So you can develop an asset pretty quickly,” says Chris Archer, head of Americas at Macquarie’s Green Investment Group, a solar and wind developer with projects in Texas.
Green energy builders have encountered pushback in states where the urgency of climate change is widely embraced. New York governor Andrew Cuomo — now in the international spotlight as he addresses the country’s largest coronavirus outbreak — aims to get 70 per cent of the state’s electricity from renewables by 2030, but upstate towns have fought to keep solar panels out of farmland, while beachfront denizens of Long Island have opposed an offshore wind project. No such hurdles confronted Innergex Renewable Energy’s $400m, 250MW Phoebe project in Winkler county, Texas, says Michel Letellier, chief executive. The desert soil was easy to lease and to drive piles into. “Texas is a nice place for business,” Mr Letellier adds. “Maybe it’s because they carry guns — they are very polite.”
The grid operated by the non-profit body Ercot is largely disconnected from the interstate transmission networks to the east and west of Texas, exempting it from federal oversight. Its market rules are distinctive. Generators are only paid for the energy that they sell, not for having capacity at the ready. Wholesale prices that average about $40 per megawatt-hour are allowed to climb as high as $9,000 per MWh when demand surges on the hottest afternoons, a potential windfall for generators. Solar farms’ output crests when the sun is highest, enabling them to participate in these sales.
“The Ercot power market is designed to be the ultimate competitive market,” Mr Archer says.
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“[Texas] is a large, deregulated market. Users of electricity have a choice in who they buy electricity from and the type of energy that they buy,” Ms Palmer says. “I think that’s been another driver of the large uptake of renewables in the state.”
