Texas Can Lower Prices and Plug Power Gaps with Solar, Says Energy Foundation Report

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Adding solar capacity to Texas' electricity grid would result in lower wholesale electricity prices for power customers in the state, according to a report by the Brattle Group (Cambridge, Massachusetts) that was funded by the Energy Foundation (San Francisco, California) and the Solar Energy Industries Association (SEIA) (Washington, D.C.).

Analysts reviewed Texas electricity market data from the summer of 2011 and analyzed how prices would have been affected if solar photovoltaic (PV) systems had been added to the power generation mix.

Adding solar PV to the state grid during the period could have saved customers an average of $155 to $281 per megawatt hour (MWh). In addition, avoiding fuel, operations and maintenance costs associated with fossil fuel plants could have saved customers a further $52/MWh.

During the last hot summer, the Electric Reliability Council of Texas (ERCOT), the operator of the grid, was forced to issue six conservation alerts because of record electricity use in the state, resulting in power shutoffs for customers who volunteered for cutbacks during emergency conditions, the report says.

According to an analysis released at the end of May by the North American Electric Reliability Corporation (NERC) (Atlanta, Georgia), electricity reserves will challenge operations because resource adequacy levels have fallen below targets. If Texas experiences extreme and prolonged high temperatures, rotating outages are possible this summer, say the analysts.

"As Texas leaders address ways to mitigate this risk and the state's energy future, solar should be an important part of their plans," said Carrie Cullen Hitt, SEIA's vice president of state affairs.

"The declining cost of solar increasingly makes it a more viable option in Texas, where there is plenty of sun, electricity demand and a looming water shortage," added Ben Paulos, the renewable power program director for the Energy Foundation. "However, to accelerate deployment, solar needs to be compensated for the value it delivers, through fair market rules."

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