August 31, 2014

The Sun is Shining Bright in Texas as Solar Becomes a ‘Default’ Generation Resource

This week, the Austin City Council approved a resolution that brings solar to the foreground in Texas. And, perhaps most interestingly, they did so because it made business – and not just environmental – sense in current energy markets.

By Melissa C. Lott

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This article was published in Scientific American’s former blog network and reflects the views of the author, not necessarily those of Scientific American

This week, the Austin City Council approved a resolution that brings solar to the foreground in Texas. And, perhaps most interestingly, they did so because it made business - and not just environmental - sense in current energy markets.

In May, Austin Energy signed a power purchase agreement (PPA) with Recurrent for solar at a cost of 5 cents per kilowatt-hour. In turn, city officials began looking at solar as a potential way to hedge against natural gas price fluctuations. For the city, solar makes business sense today. According to Chad Blevins with the Butler Group:

“In the past, the people involved used environmental arguments to justify renewable goals. This time around, the case for renewables was based on economics – operational cost data from the utility, robust dynamic models projecting market prices and the very low PPA rates that we have seen from PV in response to recent request for proposals [RFPs]"

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As a result, the Austin City Council proposed and approved a new resolution to increase the state capitol's rooftop and utility-scale solar PV targets to 800 MW by 2020. Additionally, the resolution enabled third-party solar ownership, a solar tariff floor price, and a strategy for procuring 200 megawatts (MW) of "fast-response" storage.

Austin Energy, the city's municipally owned utility, appears concerned related to managing high levels of solar in their city's power grid. According to reports, these concerns were the impetus for adding in the language related to energy storage in the resolution.

Texas is fast becoming the national leader in renewable energy power generation. The Lone Star state is the nation's leader in wind, with more than 12 Gigawatts (GW) of wind power already on their power grid. And with this resolution, the state is now poised to lead the nation in solar as well.

Photo credit: Photo by Frauke via Creative Commons.

H/T to JG

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