Energy Exchange

A Texas Sized Solution for a Texas Sized Problem

It’s true what they say: everything is bigger in Texas, even the hole in our budget.  Today the Comptroller’s office released their estimated revenue projections, and according to most calculations, given state budget needs for the next cycle our deficit weighs in at a hefty $27 billion dollars.  Compare that big budget deficit to another number from the Texas Comptroller’s office (that’s right, the same office):$19 billion dollars.  That’s how much they estimate in a new report Texas could save annually through energy efficiency, smart building standards and other strategies that have environmental benefits and save money at the same time.

The report is the result of legislation passed in 2009 by Sen. Kirk Watson called the “No Regrets” bill, which asked the Comptroller to look at strategies for the state that would save money in Texas, and also reduce CO2 emissions.  The final report is the product of exhaustive work on the part of the Comptroller’s and Senator Watson’s offices, along with the PUC, Railroad Commission, TCEQ, the General Land Office and a broad set of stakeholders including oil and gas companies, manufacturers, businesses, electric companies, environmentalists, Texas A&M, and UT Austin to name a few.

With a set of stakeholders that broad it’s never easy to come to an agreement on even a single strategy.  To Comptroller Combs and Senator Watson’s credit, they shepherded a process that lead to full stakeholder agreement that 20 of the 44 proposed strategies would both save the state money and reduce carbon dioxide.  According to an analysis from the final report, the total annual savings of enacting these strategies would be almost $20 billion.  Of course, saving money for Texans isn’t the same as saving money for the state government, but some of these savings translate directly into state budget savings, while others could be used to offset the need for budget cuts.

During the last budget cycle state leaders were able to patch the budget gap with federal stimulus money but this time around we won’t have that option. Tough decisions will need to be made and Texans have made it clear they’re not interested in new taxes. If you compare Texas’ deficit to other states with Texas sized economies like New York ($9 billion) and Florida ($3 billion) as economist Paul Krugman did in a column last week, you start to get an idea of the sort of trouble we’re in.  Even California’s deficit is about 20% of their general revenue, compared with about 31% for Texas and with an economy about two thirds the size of California’s.

State leaders have been vocal that this time around some difficult decisions will have to be made.  Texans will likely have to deal with longer Emergency Room visits (and more of them!), larger classroom sizes, fewer police officers and firefighters and less care for our grandparents.  State leaders are right to be worried about the looming budget shortfall and the need to tighten our belts, and the No Regrets Report lays out a good roadmap to begin to do that. In the mean time as has been mentioned by my colleagues Elena Craft and Jim Marston, the state could save money immediately by dropping their frivolous lawsuit aimed at circumventing a unanimous decision by the Supreme Court.

Also posted in Energy Efficiency, Texas / Read 1 Response

A Move In The Wrong Direction

For the last century, Texas has been the energy capital of the United States and in order to maintain that position at the top we must attract new renewable energy companies to Texas.  Today the PUC convened in an open meeting to discuss the important question of whether Texas should be involved in the 21st century energy market, a market which is rapidly becoming dominated by China and India, among others.  Unfortunately it seems the conclusion they’ve already come to is “why do today what you can put off until eight years from tomorrow.”

 The PUC’s proposed rule pushes back the 2015 goal set by the legislature of having 500 MW of solar and other non-wind renewables to 2018, letting the solar and other renewable energy industries know that when it comes to planning for the future, we’d just as soon wait.  Not that anyone should be surprised, considering the legislature first passed this 500 MW goal in 2005 and it has taken five years for the PUC to respond with a proposal.

 A more aggressive Renewable Portfolio Standard for non-wind renewable energy, much like the one that fostered Texas’ wind dominance, is the type of policy that can help Texas be a leader in solar.  The PUC seemed to recognize this fact, and the clear intent of the Legislature in its first two drafts of this proposed rule.  A great deal of time and effort from staff and stakeholders went into discussing and analyzing the costs and benefits since the last draft was published in April.  However, for reasons the PUC has not disclosed, they have decided that instead of 500 MW by 2015 Texas needs 10 MW of solar and 20 MW of other renewables.  That is a dramatic drop from enough renewable energy to power 250,000 homes to only 15,000 homes.  The PUC’s change of heart on the non-wind RPS is economically irresponsible and sends the wrong message to renewable energy companies looking to do business in Texas.  This decision could drive solar companies to Arizona, New Mexico or Colorado, states with much more aggressive solar energy mandates.

 Meanwhile, Central Texas cities such as San Antonio and Austin, whose municipally owned utilities are not subject to the PUC, have established their own goals for solar power and have taken the initiative to invest now to offset the future risks of the rising cost of energy. Earlier this month SunPower announced plans to open a new corporate operations center in Austin, bringing around 450 jobs to the city.  Just this week RRE Solar broke ground on a mammoth solar project in Pflugerville that will be the flagship project of a multi-national renewable energy company that sees vast growth potential for utility-scale solar development in Texas.  San Antonio’s work with SunEdison on three 10 MW installations in the city is expected to lead to larger economic development opportunities with the solar giant. 

 Despite what some critics have said, it’s clear that cost is not really the issue when considering these types of long term goals.  Austin Energy and City Public Service represent some of the lowest electric rates in Texas over the last few years, and to keep those rates low and create new jobs their communities have set goals for solar power.  Even the PUC has been clear about the benefits of the RPS, saying in their 2009 report that wind energy “has had the impact of lowering wholesale and retail prices of electricity.”  However, the Austin and San Antonio utilities represent only about 10% of the market.  If Texas is going to fully take advantage of its solar resources, the PUC needs to have meaningful requirements for the rest of the market.

We can only hope that the 82nd Legislature passes more meaningful incentives for renewable energy to help generate clean Texas renewable energy generated power, economic development and the jobs that the PUC’s current plan fails to deliver.

Also posted in Texas / Read 3 Responses

Texas Solar Plant Sets New Trend with Water Saving Technology

The blog was co-authored by Amy Hardberger, an attorney in the EDF Texas office who specializes in the energy-water nexus.

The hard truth is this: Texas will need more electricity as it continues to grow. This means we’ll have to make some tough choices in the future to balance the needs of our economy with the environment. 

Renewable energy, particularly solar, is an important piece of the solution.  As more large solar projects are proposed, regulators, local citizens and developers will need to weigh economic development opportunities with wildlife and land preservation.  In Texas, EDF has been involved in many of these issues, especially the use of water as it relates to power plants.

Renewable energy can be water efficient

Conventional power plants, such as nuclear and coal plants, are well known as high consumers of water, but renewable power is a different story.  Photovoltaic solar projects in Texas require little to no water. 

A lesser known, but very promising solar technology is Concentrating Solar Power (CSP).  CSP uses conventional power plant technology coupled with highly concentrated sunlight to avoid the use of fossil fuels. 

Texas can lead the renewables industry in water efficiency

In terms of water use, CSP developers have traditionally relied on more conventional water-based cooling systems. However, there is a  shift to dry-cooled systems, a more water efficient system – reducing water usage by as much as 90%. This is good news since most CSP projects are proposed in places with a lot of sun and not a lot of water.

Texas may be at the forefront of a utilizing CSP in an even more water efficient way. Texas’ first CSP project is being developed by Tessera Solar. Their design features a technology that uses no water in the electric generation process. The only water needed is to clean the system.

In other locations, Solar Millennium announced its decision to change a planned project in Nevada to dry cooling in November of last year, and BrightSource Energy has chosen to use dry-cooling for all of its projects. 

Texas and a solar boom

This couldn’t come at a better time for Texas. The Public Utilities Commission is finally considering a rule to implement renewable energy goals for non-wind resources from a bill passed in the 2005 Texas Legislative Session that will help kick start solar in Texas.  Meanwhile, conventional power plants that are being proposed have some cities proposing the equivalent of taking out a second mortgage on their water supply

Texas is well positioned for a solar boom to rival the last decade’s wind boom, and we’re glad to see that solar companies are reading the writing on the wall. Trying to find water in the desert is like trying to find a needle in a haystack.  Why waste your time, when you can avoid the haystack all together?

Also posted in Texas / Read 16 Responses

Using renewable energy instead of natural gas saved Austin almost $50 million

Settling down with my usual bedtime reading last night – Austin Energy’s Annual Report of System Information – two tables caught my attention: the “Fuel Costs” (in total $) table on page 2, and the “Energy By Fuel Type”(in total MWh) table on page 3.   Hiding in those tables are some meaningful numbers that refute the current thinking that with natural gas prices so cheap, nothing can possibly be cheaper. A little bit of math shows that renewable energy is an even cheaper option.

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Also posted in Texas / Read 40 Responses

Not All Smart Grids are Green Grids

psp-logo-150pxNow we’re talkin’.  Austin is already known as one of the “greenest” cities in the nation, and it looks like we’ll soon be even greener – and smarter, too.

The U.S. Dept. of Energy’s Nov. 24 announcement of $620 million in “smart grid” demonstration and energy storage projects included $10.4 million for the Austin-based Pecan Street Project. The grant will be used to fund an advanced smart grid project at the Mueller development in central Austin. The Mueller neighborhood – a public-private joint venture between the City of Austin and the Catellus Development Group – is located at the site of Austin’s former airport.

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Also posted in Climate, Energy Efficiency, Grid Modernization, Texas / Read 12 Responses

Austin Energy Contemplates Costs, Considers Customers

AE Fuel Rate graphicLast week Austin Energy formally recommended to the city council that it begin planning for the 2012 rate case that we’ve known about for some time. A confluence of circumstances, including workforce issues, new transmission, rising fossil fuel costs and decreases in revenue this past year have made what will be Austin Energy’s first base rate increase in 15 years (!) a real necessity. 

At this point only a few of the costs are known or even quantifiable, particularly the transmission and fossil fuel costs to the system. In looking at Austin Energy’s report, the cost for new transmission to bring more wind to Texas will be less – about 0.7¢/month for the average customer in 2015. If fossil fuel prices don’t increase more than they have over the past six years, the General Fund Transfer costs associated with fossil fuels might be only 0.4¢/kWh by 2015. Of course, that’s assuming that Austin Energy stays smart and doesn’t put too many more eggs in the fossil fuel basket. Read More »

Also posted in Energy Efficiency, Texas / Read 7 Responses