Analysis: Developers study 5.3GW of solar in Texas

OREANDA-NEWS. Solar generation under study by developers in Texas has doubled in the past year, spurred by more-favorable project economics and the risk of less-favorable federal and state incentives.

At 5,300MW, solar projects represent less than 9pc of the total 62,000MW in the Electric Reliability Council of Texas (ERCOT) interconnection queue.

Even so, interest in solar has "increased dramatically over the last year," Texas grid president Trip Doggett told state legislators last month.

Falling capital costs that make solar more competitive with other generation and expiration of the federal 30pc investment tax credit at the end of 2016 are driving solar development despite Texas' lack of a utility mandate for solar.

Only a fraction of capacity in interconnection studies is ever built as developers often study multiple locations or projects that never advance.

Texas leads the nation in wind power with 12,470MW of installed capacity that accounted for nearly 11pc of power consumed in ERCOT last year while solar has yet to weigh in.

A wind boom in Texas' deregulated market surpassed the state renewable mandate years ahead of schedule and solar interests have been unsuccessful in efforts to legislate a solar mandate.

Without a mandate, long-term power purchase contracts are rare except with municipal utilities that do not face competition for retail customers.

Two of the state's largest municipal utilities, City Public Service of San Antonio and Austin Energy, are pushing solar development.

The San Antonio utility has nearly 44MW of solar capacity in operation and is working with OCI Solar Power to develop 400MW by the end of 2016, enough to serve 10pc of homes in the state's second-largest city.

Austin Energy, which serves the state capital, has 30MW of operating solar generation and has contracted with Recurrent Energy to develop a 150MW solar facility in west Texas.

Austin's city council has an ambitious plan calling for its utility to supply 55pc of its power from renewables by 2025, in part by adding 600MW of utility solar.

Recurrent Energy said it sees more than 1.1GW of incremental demand for solar from municipal and cooperative offtakers in Texas in 2016 and 2017.

ERCOT's long-term system study projects 4.7GW to 16.5GW of solar by 2029, depending on economic and environmental factors.

Two OCI solar projects, totaling 215MW, along with Recurrent's 150MW facility have interconnection agreements with ERCOT. Another 47 solar projects, ranging in size from 20MW to 500MW, are in various study stages.

Four counties in far west Texas — Pecos, Reeves, Brewster and Presidio — account for more than half of the proposed solar capacity. The area offers the best solar resource in the state, much like Arizona and California.

But solar development there may require significant transmission investment because it is beyond the reach of Texas' CREZ facilities, a \\$7bn network of high-voltage lines built to serve wind generation.

Discussion by regulators to end Texas' accelerated process to build transmission for renewable resources may have spurred some solar projects to get into the queue ahead of any change.