By Katherine Blunt
Wind power made Texas the leading renewable-energy producer in
the U.S. Now solar is fast catching up.
Invenergy LLC broke ground this year on a $1.6 billion solar
farm northeast of Dallas that is expected to be the largest in the
country upon completion in 2023. AT&T Inc. and Alphabet Inc.'s
Google are among the large corporations that have contracted to
purchase power from the project, which will span more than 13,000
football fields and supply enough electricity to power 300,000
homes.
It is part of a growing number of solar projects in sunny,
land-rich Texas, where experts long predicted solar farms would
bloom. Solar-farm development in Texas is expected to accelerate in
the coming years as generation costs fall and power demand grows.
That growth puts it on track to claim a much larger share of a
power market dominated by wind farms and natural-gas power
plants.
Invenergy has developed wind farms in west and central Texas,
but the solar project is its first one in the state. Ted Romaine,
the company's senior vice president of origination, said that
unlike wind, which often peaks at night, Texas solar has the
potential to boost electricity supplies when daytime demand is
highest.
"Solar is the natural next step in a state like Texas," Mr.
Romaine said.
Five years ago, the Electric Reliability Council of Texas, the
state's grid operator, projected that as much as 12,500 megawatts
of solar-generating capacity would be installed across the state by
2029. It now expects to surpass that as soon as next year.
Generally speaking, 1,000 megawatts can power 200,000 Texas
homes.
There are now about 3,800 megawatts of solar capacity on the
Texas grid, a fraction of the 25,000 megawatts of wind power it
supports. By 2023, that gap is expected to narrow, ERCOT says, with
as much as 21,000 megawatts of solar and 38,000 megawatts of wind
installed.
That could put Texas on track to surpass California, which leads
the nation with more than 13,000 megawatts of large-scale solar
capacity.
Texas is the leader in renewables overall with nearly 29,000
megawatts of wind and solar generation.
Part of the anticipated growth in solar is tied to a federal tax
credit available to solar-project developers that will be
substantially reduced by 2022. It may be renewed under
President-elect Joe Biden, who has pledged support for clean-energy
projects.
Warren Lasher, ERCOT's senior director of system planning, said
the grid operator anticipates growth to continue regardless of the
tax credits as power demand increases and large companies seek
clean energy sources to support carbon-reduction goals.
"We've reached a turning point," Mr. Lasher said. "These numbers
point to the fact that solar is really starting to take off."
Unlike many other places in the U.S., electricity demand in
Texas has generally grown as a result of a population boom. That
growth has prompted the need to build new-generation sources,
especially as coal-fired power plants retire because of their high
operating costs and concerns about carbon emissions.
The costs of developing wind and solar farms have fallen
substantially in recent years, and the power they produce has
become cheaper as a result. But in many places, wind power is less
expensive. Including subsidies, the cost of generating wind power
now averages about $26 per megawatt hour, according to investment
bank Lazard, while large-scale solar generation averages $31 per
megawatt hour.
Wind power is especially competitive in Texas, where an
abundance of turbines sometimes floods the market with enough
electricity to push wholesale electricity prices to zero. But
developers say that solar is gaining an edge as technology costs
decline and panels become more efficient.
Scott Mair, AT&T's president of technology and operations,
said Invenergy's solar development is competitive with other
renewable projects in the state. It will be AT&T's first solar
supplier in Texas; the company, which is working to make its
operations carbon neutral by 2035, had only targeted wind before
the Invenergy project.
"We always try to do the right thing with renewables, but it
needs to make sense for us," Mr. Mair said. "The rates are to our
liking."
Invenergy declined to disclose contract prices.
Enel Green Power, a global renewable-energy developer owned by
Italian utility Enel S.p.A., this fall completed a 497-megawatt
solar farm in West Texas, the largest in the state. It did so in
less than two years -- record time for the company -- and recently
broke ground on another solar farm paired with battery storage just
south of Dallas.
Georgios Papadimitriou, head of Enel Green Power North America,
said Texas is fertile ground for solar power because the permitting
and construction processes are relatively fast and easy, with few
restrictions on where projects can connect to the grid.
"Texas is the most booming state in terms of growth," he said.
"And solar is just getting started."
Write to Katherine Blunt at Katherine.Blunt@wsj.com
(END) Dow Jones Newswires
November 28, 2020 11:14 ET (16:14 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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