The future of the Texas electric market will very likely include substantial amounts of renewable energy and gas-fired power, economists with The Brattle Group find in a new report prepared for the Texas Clean Energy Coalition (TCEC).
"Exploring Natural Gas and Renewables in ERCOT, Part II: Future Generation Scenarios for Texas" provides a 20-year outlook for natural gas and renewable power in Texas. It is the first examination of its kind to be conducted and shared publicly in Texas.
With over 12,000 megawatts of installed capacity, Texas is the largest state producer of wind-powered electricity in the U.S., more than double the next two largest wind capacity states combined. At the same time, Texas is the leading U.S. producer of natural gas, and the state generates over 40 percent of its electricity from natural gas plants. Add to that the prospects for solar energy from the abundant sun and Texas is in a position to produce cleaner, more affordable and reliable electricity than ever before while helping improve economic well-being for Texans.
Key findings related to the future of natural gas and renewable energy, include:
-- Under the range of scenarios, natural gas and renewables both play
substantial roles in ERCOT and provide all new generation needed to
respond to growth in the state's population. No new coal plants are
built in any scenarios.
-- Across the more likely scenarios, wind and solar grow from their current
10 percent generation share to levels between 25 and 43 percent. Natural
gas-fired generation provides all of the remaining incremental
generation, adding 12 to 25 gigwatts of new combined-cycle capacity - a
38 to 80 percent increase in the current installed base.
-- The mix of new gas and renewables generation is sensitive to the price
of natural gas and cost declines in wind and solar power. Changes in
these three factors can cause significant shifts in the mix of future
installations, leading to a wide range of plausible generation shares
for wind, solar, and natural gas.
-- Among gas-fired power plants, nearly all future additions are
combined-cycle gas turbine (CCGT) plants rather than traditional gas
turbines, due to the fact that CCGTs are more efficient and expected to
be more flexible than other turbines.
-- The study found that the ERCOT system could accommodate all levels of
variable renewables likely to occur during this period with no
reliability problems. However, accommodating higher levels of renewables
required the model to use an additional ancillary service - known as the
intraday commitment option - and to adjust the levels of current
ancillary services.
-- The analysis shows that federal production tax credit and ERCOT
ratepayer funding of new transmission lines remain important drivers of
wind development.
-- A reserve margin has a very small overall effect on the generation mix
or emissions in ERCOT through 2032. However, scenarios using higher gas
prices and lower renewables costs reduce the growth of CO2, NOX, and SO2
substantially. A stringent federal carbon policy reduces 2032 CO2 by 66
percent versus 2012.
-- Existing coal units in ERCOT remain profitable and are not retired
unless a relatively stringent federal carbon policy is adopted. A
federal carbon policy requiring 90 percent capture and storage of
carbon, for example, would prompt the retirement of most ERCOT coal
units.
-- Under the strong federal carbon policy scenario, gas and renewable
generation would together replace the energy formerly supplied by coal
plants. In this case renewable energy could rise to become 43 percent of
ERCOT generation by 2032.
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