By Diego Mendoza-Moyers
The San Antonio Express-News, Jan. 13, 2022
The rapid growth of solar power in Texas continued in 2022, as it generated nearly three times the amount of electricity statewide that it did just two years ago.
Solar produced 6 percent of the power generated on the Texas grid last year — and the rapidly growing source of zero-carbon electricity is poised to play a bigger role in San Antonio as city-owned CPS Energy considers quadrupling its solar capacity in the next five years.
As production from solar farms and natural gas-fired plants keeps increasing, coal is becoming an ever-smaller portion of the state’s energy mix, according to a year-end report from the Electric Reliability Council of Texas, the state’s grid operator. Coal-fired power stations produced 17 percent of Texas’ electricity last year, down from 32 percent five years earlier.
Gas remains the top power source in Texas, responsible for 43 percent of the state’s generation last year. Fifty-nine percent of the power generated in ERCOT last year came from fossil fuel-based sources, a slight decline from 2021.
In San Antonio, CPS is planning to add nearly 2,200 megawatts of gas-fired capacity — alongside the additional solar capacity — by 2030 to replace two half-century-old gas plants and the J.K. Spruce coal plant, the city’s largest source of power today.
Rising gas prices
Spot market prices for natural gas shot up last year in part because European nations shifted from purchasing gas from Russia after its invasion of Ukraine in February. Texas gas producers were happy to fill the gap, and exports from the Gulf Coast skyrocketed. While that’s a boost for producers, it’s forcing U.S. consumers and utilities to compete with Europe for the commodity — and driving up rates for utility customers.
By May, the average cost of 1 million British thermal units of natural gas reached $8.14, a 180 percent jump from the $2.91 a year earlier, according to the Energy Information Administration. One million Btu equals about 1,000 cubic feet of natural gas.
Over the summer, high-priced natural gas was the main culprit behind a 32 percent average increase in San Antonio households’ CPS bills. By this winter, utility customers in some parts of the state were seeing monthly bills nearly doubling as furnaces cranked out heat.
But elevated prices for natural gas have helped make solar more competitive, said Carey King, assistant director of the Energy Institute at the University of Texas at Austin. Solar generation in Texas increased 54 percent last year from 2021, and King said it could continue growing quickly in Texas for some time before potentially leveling off.
“That helps the economics of solar, to have a high gas price,” he said. “So I expect the next couple of years to still be pretty good for solar installations.”
Lt. Gov. Dan Patrick has said that one of his major priorities this legislative session is to ensure more gas-fired power plants are built statewide. CPS has likewise said it needs to maintain adequate “dispatchable” power that it can quickly turn to when demand for electricity rises.
Even so, gas-fired capacity is “not the only thing that’s important,” King said.
“Gas capacity… is not a reliable thing for a winter peak or a big winter storm,” King said, pointing to problems with gas supply, which froze up in Texas during the 2021 winter storm and hit more snags during a cold snap late in 2022. “For the winter, it seems dubious to think more gas capacity is going to help.”
Aside from more generating capacity, King said demand response programs “will have to become more and more prominent and should compete with the natural gas investments.”
The Public Utility Commission of Texas is conducting a “virtual power plant” pilot that seeks to use residential home batteries, such as the Tesla Powerwall, to store or dispatch energy from the grid.
“People sign up for a program to have their storage dispatched or charged under certain conditions,” King said of the idea.
The PUC and ERCOT still have to work out the technical kinks of pulling and pushing power from many different small sources. But combining large, utility-scale battery arrays with homeowners’ storage systems could help utilities meet their peak demand, King said, and that could be less expensive than investing in more gas power plants.
CPS generation plans
Under its proposed power generation plan, CPS would add more than 1,000 megawatts of battery storage by 2030. Today, it operates just 10 megawatts of batteries near Southwest Research Institute.
The utility has yet to settle on its final plan for the coming years, but the leading contender calls for shutting down the J.K. Spruce coal-fired generating plant — which emits about 6 million tons of carbon dioxide each year — and two other aging gas plants by 2029 and adding nearly 2,200 megawatts of natural gas capacity and nearly 1,100 megawatts of solar generation.
One megawatt is roughly enough to power 200 homes on a summer day. CPS today operates about 550 megawatts of solar generation.
While the closure of the Spruce coal plant represents a long-sought victory for environmentalists, the utility is planning to convert one of two units at the plant to run on natural gas. CPS executives say the fuel will remain a major part of the portfolio in the coming decade.
King said the utility’s plan to add gas-fired and solar generation alongside battery storage in the coming years is sensible in today’s energy landscape. It would also lower the risk of CPS being short on power and facing volatile prices in the ERCOT electricity market, as has happened, he said.
“That’s kind of following what the general new investment portfolio is in ERCOT,” King said. “It’s hard to replace one unit of coal with all wind, solar and batteries. Since (CPS is) such a large utility, if you own generation, being in charge of that generation helps hedge your costs in the market.”
Originally posted on The San Antonio Express-News,