(September 9, 2020)
Around 70 percent of coal power capacity in Texas will be at risk by 2022 and the majority of the state’s 11 coal plants will be shutting down by 2025, according to a new report. The Institute for Energy Economics and Financial Analysis argues that the main cause of coal’s early departure from the energy market will be a vast growth in solar capacity, supported by the expansion of battery storage.
Although total solar power generation only accounted for 1 percent of energy produced in the Electric Reliability Council of Texas (ERCOT) marketplace last year, its growth is expected to be rapid. Its percentage of total output is set to double this year to 2 percent of all energy generated. In absolute terms, solar power capacity is expected to increase to more than five times its 2019 level by the end of 2021.
Dennis Wamsted, an IEEFA energy analyst who was the lead author on the report, stressed that solar is already playing a more important role in energy generation at certain times of the day and throughout the year compared to its overall share of generation. For example, during the month of June 2020, solar power accounted for between 4 and 5 percent of all energy generated in ERCOT’s market.
The continued growth of solar will “irreversibly alter the market’s daily dynamics,” states the report, delivering a “crippling blow” to the Lone Star State’s remaining coal plants. To underscore this point, the report noted that in the first six months of 2020, total solar generation was 88 percent higher than during the first six months of 2019.
By January 2022, the report predicts 70 percent of coal’s daytime share of demand will be at risk of disappearing to solar. The main reason for this drastic shift is the competitive energy market in Texas, the authors say, which gives cheap sources of energy like solar an advantage over the more expensive coal.