Natural Gas Peaking Units Address Limitations of Renewable Power in Texas

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Renewable energy development in Texas continues to increase due to federal production tax credits and a growing trend of utilities moving away from coal-fired generation to renewables, such as wind and solar. Due to this growth, developers continue to require natural-gas-fired peaking capacity to augment the load variations in these types of intermittent resources.

Industrial Info is tracking 27 peaking generation projects valued at $9.31 billion. For related information, see October 7, 2015, article - Top 10 Texas Power Industry Kickoffs in Fourth Quarter Spurred by NGCC, Wind Energy Facilities.

Industrial Info is tracking 91 renewable energy projects in Texas, valued at $34.5 billion. This includes 74 wind power projects, valued at $32.2 billion; 13 solar projects, valued at $2.1 billion; and four hydropower projects, valued at $114 million.

Low power prices offered by the Electric Reliability Council of Texas (ERCOT) (Austin, Texas), the grid operator for most of the state, are slowing the start of some power projects. With predictions that natural gas prices will not move much beyond $3 per million British thermal units, some of these projects may be pushed out or delayed to await better market conditions.

Although wind generation only provides Texas with about 9% of the state's total generation capacity, and solar provides less than 1%, these intermittent resources swing considerably during peak generation times. According to ERCOT, wind generation provided 12.3% of electrical generation capacity for the state in October, with solar providing less than 1%, and hydropower providing 1%.

Fast-start combustion turbines are critical to avoid loss of electric grid capacity during these peak energy times, especially in the summer, when wind generation typically drops due to temperature variations. No power plant ever produces at full capacity all the time, and other plants are better suited to baseload or "always on" generation than others. Thus, renewable energy generation must be augmented by fossil fuel generations.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.