As a leader in the energy industry, the Texas deregulated electric market faced many shifts and challenges in 2020. COVID-19 and the resulting shutdowns impacted energy use across the state. The 2020 presidential election caused many in the energy industry to wonder whether new regulations would affect traditional power sources such as coal and oil. And last year resulted in a sharp increase in renewable power sources, including wind and solar, which continue to grow in the Texas energy market. Many in the industry wonder what will happen in the energy world in 2021.
A new year will likely bring new challenges and opportunities for the Lone Star State. Choose Energy spoke with some leaders in the Texas energy industry to discuss their outlooks for 2021. From the lasting impacts of COVID-19 to the ongoing relationship between fossil fuels and renewables, these leaders expect 2021 will be a big year for Texas. Here are their predictions for the Texas electricity market in 2021.
Chariot Energy: Brian Armentrout, director of sales and marketing
2021 is shaping up to be another interesting year in the deregulated Texas retail electricity market with the continued uncertainty around COVID-19. An increasing number of consumers are turning from traditional shopping channels, such as door to door and telemarketing, and more toward digital channels as they look for value beyond the lowest price.
Chariot Energy has identified those four consumer personas as:
- Methodical buyers who will spend more time than the average consumer shopping for the perfect energy plan
- Spontaneous shoppers who just want a good, fair product with some added value without doing too much work
- Competitive buyers who are almost purely focused on the best deal
- Humanistic consumers who rely on peer reviews for referrals and want a solid branded and added value.
“As Generation Z’ers become a bigger piece of the consumer market, securing value, such as 100 percent renewable energy products without paying a premium will be become more important for retailers,” Armentrout says. “Retail Energy Providers will be required to reach those consumers in innovative and custom-tailored ways. They will have to do so through the use of technology such as artificial intelligence and mac`hine learning to understand buyer behavior and drivers at the individual consumer level to create for a more meaningful and fully transparent customer buying and service experience.
“Chariot Energy is leveraging technology, partly through a collaborative project with University of Texas Austin, to develop relevant product offers to various segments and audiences to ensure world class customer service deliverability. In addition, Chariot Energy’s parent company, 174 Power Global, is a leading utility scale solar project and battery storage developer in North America who is committed to continuing the growth of solar energy into the mainstream through the development of projects, like its recently commissioned 1,200 acres solar power plant, Oberon, located in West Texas.
“Energy generated from this facility will benefit Texans directly as Chariot Energy and 174 are able to leverage the financial benefits of owning the value chain at the wholesale and retail levels, ultimately delivering lower-priced energy plans to its consumers in Texas.”
Payless Power: Steven M. Malkiewicz, chief risk officer
“Power prices are expected to be more volatile in 2021 as renewable generation increases its share of the Texas electricity market,” Malkiewicz says. “Wholesale power prices are set by the smaller group of non-renewable generators who able to respond to changes in demand (and net of any power that might be available from wind farms and solar parks).
“Growth of renewable generation has therefore increased price uncertainty and volatility and the trend is continuing into next year. Texas businesses and consumers should generally opt for fixed price contracts that provide budget certainty instead of attempting to navigate these fluctuating power markets.
Pulse Power: Rob Cantrell, president of Pulse Power
“Prices in the Texas market, historically tied to natural gas, are now all about scarcity and volatility during the summer months,” Cantrell says. “The proliferation of renewables has created an extremely fragile generation stack, which causes wild price swings during July and August. Potential carbon taxes or other punitive measures aimed at fossil fuels by a new administration may also push prices higher for Texas consumers.”
Choose Energy will continue to monitor the energy industry throughout 2021. Follow the Choose Energy newsroom for the latest events in the electricity market.
Caitlin Ritchie is a writer within the energy and power industry. Born in Georgia, she attended the University of Georgia before earning her master’s in English at the University of North Carolina at Charlotte.