5 Signs of Texas’ Clean Energy Momentum in 2015

From Apple to General Electric, it is common practice in the corporate world for established juggernauts to invest significant sums for research and development. Why? Maintaining one’s reign atop a sector requires dynamic, cutting edge innovation.

The same logic applies to state economies. And when it comes to energy, Texas – where oil and gas reign king – has arguably been America’s most dominant state for the past century. Over recent years, however, technologies and developments reshaping the sector have advanced at an unprecedented rate. As a result, it’s become clear that the energy sector of the future will rely far more on clean energy and smart technologies than on fossil fuels.

The good news: Texas has by far the most potential for solar and wind generation in the United States, which means the Lone Star state might be even more energy-rich in the 21^st century than it has been in the past. In addition, the state’s energy sector is trending cleaner due to market forces.

And, in case you needed more proof, 2015 has been a dynamite year for clean energy momentum in Texas. Here are five reasons why:

• As prices have dropped, the growth rate for renewables has accelerated.

Texas’ grid operator, the Electric Reliability Council of Texas (ERCOT), keeps track of all electric generation in the state year to year, and evidence from 2015 suggests renewables have taken off. ERCOT’s installed wind capacity – or the amount of wind energy capable of being produced – is projected to increase nearly 25 percent from 2014 by year’s end. In addition, solar capacity has increased more than 30 percent this year. And the groundwork has been laid for an explosion in 2016: ERCOT solar installations are expected to quadruple, and wind installations are forecast to grow more than 35 percent.

Why is all this wind and solar growth occurring? Prices for both are plummeting. In particular, these competitive prices have manifested in unprecedented 2015 Texas solar power deals. Austin’s utility, Austin Energy, received offers earlier this year for solar energy at 4 cents/kilowatt hour (KWh), which led Greentech Media to declare it the “Cheapest Solar Ever.” Houston, Texas’ biggest city, also made plans for solar energy to generate 7 percent of its power by late 2016 at 4.8 cents/KWh, a price that city officials estimate could save the city more than $19 billion over the deal’s 20-year lifespan.

An encouraging sign for the future is that solar costs have historically fallen over 20 percent as global capacity has doubled, and global capacity is expected to double from the 2014 level by 2017. Austin Energy expects the price of solar to drop below 2 cents/KWh by 2020.

• Economics are driving corporate giants and cities (even conservative ones) toward ambitious clean energy action.

Stellar clean energy prices have contributed to big Texas news from companies and cities alike in 2015.

For example, Facebook announced earlier this year that it will power its large new data center in Fort Worth using wind energy. This announcement preceded an October 2015 announcement from Procter & Gamble and followed a 2014 statement from Mars who both will power 100 percent of their U.S.-based electricity needs using Texas wind.

And last month, the municipal electric utility that serves Denton, a North Texas city of 130,000 people, announced plans to get an impressive 70 percent of its energy from renewable sources by 2019. This ambitious renewables target echoes one set earlier this year by Georgetown, a fellow Texas city just north of Austin, which is on track to be 100 percent renewable by 2017. The city’s mayor, Dale Ross, minced no words in clarifying the reason behind the decision saying, “environmental zealots have not taken over our city council…Our move to wind and solar is chiefly a business decision based on cost and price stability.”

While in the past, Austin, San Antonio, and El Paso have set ambitious clean energy goals, what is especially encouraging about Denton and Georgetown is that they are politically conservative. For example, in the 2014 Senate race, Williamson County (which subsumes Georgetown) and Denton County voted 62 percent and 68 percent for the Republican candidate, respectively. Even in Texas’ conservative cities, politics are not proving to be a hindrance as renewables begin to outcompete fossil fuels.

• Private utilities are increasingly opening their minds to clean energy.

Earlier this year, Luminant, the state’s biggest electricity generator with a coal-heavy fleet, announced plans to power more than 50,000 homes with West Texas solar by late 2016. This is the largest solar deal in the country for an investor-owned utility in a competitive market. Although Luminant has a long way to go, it has taken its first step in the right direction.

In addition, transmission and distribution utilities, like CenterPoint, are modernizing through an aggressive push for pervasive advanced meter installations and a cleaner energy portfolio that enables customer-owned distributed energy resources (or everyday folks adding rooftop solar to their homes, for example).

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• The state has experienced substantial energy efficiency progress.

According to the American Council for an Energy-Efficient Economy’s (ACEEE) annual state rankings, Texas was most improved – jumping from 34^th most efficient state in 2014 to 26^th in 2015. The state’s emphasis on adopting the newest building energy codes and ensuring compliance to them was the primary driving force behind this improvement.

In addition to building codes, the perennial energy efficiency leaders within the state, Austin Energy and CPS Energy in San Antonio, continue to be on track to achieve their ambitious energy efficiency targets. Austin Energy aims to reduce peak 2020 energy demand by 17 percent through energy efficiency. In addition, CPS Energy is midway to achieving a similarly ambitious efficiency goal for 2009-2020.

• The Clean Power Plan anchors a future policy landscape that is favorable for renewables.

August 2015 saw the finalization of the Clean Power Plan (CPP), Environmental Protection Agency’s plan to limit carbon pollution from our nation’s power plants for the first time ever. By emphasizing carbon-free energy sources and energy efficiency, this policy creates a landscape for clean energy growth in the United States like never before.

Fortunately, Texas is nearly 90 percent of the way toward compliance with the plan by 2030 under “business as usual.” And the even better news is the Clean Power Plan is a major boost for clean energy progress in the state because it will:

• Spur clean energy activity in order to achieve the remaining 12 percent gap in compliance.
• Add clarity for businesses about what to expect from the state’s energy sector over the coming years, meaning they can feel confident about developing long-term strategies.
• Provide certainty that politically-charged decisions will not hinder Texas’ current clean energy momentum.

Over the past decade, year-on-year clean energy progress has been exponential in Texas. Not only has this trend ramped up in 2015, all signs point to 2016 leaving this year in a North Texas dust storm.

And for every Coca-Cola, which has adapted to the times decade after decade to remain on top, there are 10 companies like America Online (AOL), whose market share fizzled as its competitors’ superior technologies turned its value proposition obsolete. With more years like 2015, Texas will set itself up to be the energy world’s Coca-Cola as it dominates the sector for another century.

This post originally appeared on our Texas Clean Air Matters blog.