A new report released today analyzed how much electricity prices for Texas consumers would have been reduced in the summer of 2011 by adding solar capacity to the Texas electricity market. In total, it found potential savings of over $520 million for state electricity consumers.
Additionally, the study found that additional solar capacity would help considerably to reduce growing blackout threats in the state.
Potential Impact of Solar PV on Texas Electricity Markets
The study, “The Potential Impact of Solar PV on Electricity Markets in Texas,” examined “the total potential cost savings for electricity customers through reduced prices from additional electricity generation, lower fuel costs from utilizing solar instead of additional fossil fuel electricity generation, and the lower costs for operation and maintenance that come with solar energy.”
The key findings of the report are that “adding photovoltaic solar to the Texas electricity grid in the summer of 2011 could have saved customers an average of $155 to $281 per megawatt hour (MWh) and that avoiding fuel, operations and maintenance costs associated with fossil fuels plans could have saved customers an additional $52 per MWh. Taken together, the total customer benefits of adding solar PV to the Texas grid was valued at more than $520 million.”
Aside from electricity prices, a major concern facing Texas residents this year is that Texas electricity reserves have fallen below targets and will, thus, challenge operations this summer. Additionally, with extreme and prolonged high temperatures this summer (likely), “rotating outages are possible.”
“During last year’s unseasonably hot summer, the Electric Reliability Council of Texas (ERCOT), which operates the Texas electricity grid, was forced to issue six conservation alerts because of record electricity usage in the state, resulting in electricity shutoffs for customers who volunteered for cutbacks during emergency conditions.”
Solar is a natural fit for Texas electricity grids and for solving this problem, given that solar production would peak when electricity demand peaks in Texas.
“Texas needs more on-peak capacity,” Pat Wood, former chairman of the Public Utility Commission of Texas and of the Federal Energy Regulatory Commission, said. “Solar delivers on peak, it doesn’t use water and it doesn’t create any smog pollution. It is increasingly affordable, competing favorably with other peak-of-the-day resources.”
Aside from the important cost benefits, the benefits of reduced blackout threats (or even fewer blackouts) from more solar on the grid are hard to quantify.
The report was conducted by analysts from the Brattle Group, a consultancy focused on the energy sector, with funding being provided by the Energy Foundation and the Solar Energy Industries Association (SEIA).
Image Credit: Duke Energy solar panel installation in San Antonio, TX via Duke Energy