November 9, 2017 Read More →

On the Blogs: Texas’ Electricity Market, in Uptake of Renewables, Is Working

Environmental Defense Fund:

Coal plant closures are the clearest sign of how Texas’ electricity market is working. Running and maintaining coal plants is expensive (without even considering the hidden costs), and the majority of plants were built decades ago. Cheaper options – which often happen to be cleaner – abound.

Recently the state’s largest power generator, Dallas-based Luminant, made a splash when it announced it will close three major coal plant complexes early next year. These plants have a combined seven units that represent over half of the power generator’s total coal capacity, and the state’s grid operator has officially given the green light to close them. Why close them? According to Luminant, the decision is “a result of challenging plant and market economics.”

And it’s not just Luminant that is struggling. Last year, a report from the Institute for Energy Economics and Financial Analysis looked at seven of Texas’ aging coal plants and “concluded that these plants’ days are numbered simply because they cannot compete.”

The Vox article summarized it well: “The steady decline of coal in Texas has […] everything to do with relentless market discipline.”

According to Environment Texas, since 2007, Texas has seen a remarkable 21,466 percent increase in the amount of electricity it gets from the sun and a 639 percent increase in wind power production.

As technology is consistently improved and refined, the cost of generating electricity from renewables continues to come down. And global forecasts show economics are on clean energy’s side: The International Energy Agency recently declared, “The era of expensive renewables is over.” Moreover, solar and wind basically have zero fuel costs since the sun shines and the wind blows for free.

These favorable economics have helped boost wind and solar in Texas’ market. According to Environment Texas, since 2007, Texas has seen a remarkable 21,466 percent increase in the amount of electricity it gets from the sun and a 639 percent increase in wind power production. There are now more than 10,000 wind turbines in the state.

The transition to a clean energy economy is creating thousands of jobs, slashing pollution, and saving water. It’s also bringing investment to Texas: Big businesses – like Amazon – are investing in Texas wind left and right.

All of these benefits should be enough to move decision-makers, and policy is undeniably crucial to delivering a clean energy future. But if state leaders won’t act, Texas is evidence that a well-designed competitive market can push coal plants to close and clean energy to soar.

More: How clean energy is set to overtake coal in this competitive electricity market

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